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Deutsche Bank - Equity Research - North America-US ETF Market Weekly Review : Q3 kicks off with strong ETP flows but mixed sentiment
June 22, 2011--Encouraging early quarter ETP flows, but investors remain cautious
Although recent economic data has turned more optimistic, investors remain cautious with an eye on what is going on with the US debt ceiling discussions at Washington and the Greek Sovereign crisis developments in Europe. Equity markets in the US (S&P 500) plummeted by 2.06% over the last week.
Last week, total US ETP flows from all products registered $1.4bn of outflows vs $10.6bn of inflows the previous week, setting the YTD weekly flows average at +$2.4bn. US ETP AUM lost almost $15bn, closing at $1.1 trillion or 10.2% up YTD.
Being this our first weekly report for the quarter, we focused on the main long-only investment trends since the end of Q2-11
The beginning of Q3-11 suggests that investors’ sentiment towards risky assets is mixed. The first full week of the quarter was very active with $11.3bn in inflows followed by $1.4bn in outflows the week after. On a QTD basis, long-only Equity, Fixed Income, and Commodity ETPs have received inflows for $6.7bn, $2.2bn, and $1.6bn, respectively. Within the main asset classes we have seen inflows into Gold (+$1,8bn), Growth (+$1.5bn), EM Broad (+$1.0bn), High Yield (+$0.83bn), and Japan (+$0.71bn) ETPs
Long only equity ETPs recorded $4.2bn of outflows last week vs $10.3bn of inflows the previous week. QTD and from a geographic allocation perspective, US-focused ETPs have concentrated the bulk of the inflows (+$3.6bn), followed by DM ex US, EM, and Global ETPs with +$1.2bn, +$1.1bn, and +$0.7bn in the same period, respectively.Long-only fixed Income ETPs recorded inflows of $728m last week. QTD, Corporate ETPs have had $1.6bn inflows, followed by broad benchmarked funds with $364m. Commodity ETPs recorded inflows of $1.8bn last week. QTD and at a sector level, Precious Metals ETPs have recorded the largest inflows with $2.0bn; while Energy ETPs have registered the largest outflows with $337m.
New Launch Calendar: moving beyond equity vehicles There have been 7 new ETPs and 3 ETNs listed since the end of last quarter. The new ETPs and ETNs will offer exposure to international equities, alternative, fixed income, and inflation-related returns. (See Figure 3 for more details).
Turnover Review: Floor activity increases as volatility soars
After the shorter week following the Independence Day holiday, total weekly turnover increased by 51.9% to $399bn vs. $263bn in the previous week. The market plunge and increased volatility pushed Equity ETP turnover $113bn or 48.4% higher to $347bn. Commodity ETPs turnover was also high driven by the precious metals sector, total weekly turnover was $33.7bn last week. Finally, Fixed Income products turnover flourished totaling $14.2bn at the end of last Friday, about 37% higher from the previous week.
Assets Under Management (AUM) Review:
$15.4bn drained from ETP assets The markets retreated last week after the rally experienced around the end of Q2-11. ETP AUM dropped by $15.4bn or 1.4% during last week. ETP AUM settled at $1.096 trillion as of the end of last Friday, recording a $101bn or a 10.2% increase on a YTD basis.
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
July 22, 2011--Standard & Poor's Canadian Index Operations announces the following index changes:
The Non-Cumulative Class A Preferred Shares, Series 30, of Canadian Imperial Bank of Commerce (TSX:CM.PR.H) have been called for redemption at $C25.75 cash per share and will be removed from the S&P/TSX North American Preferred Stock Index
and the S&P/TSX Preferred Share Index after the close of Friday, July 29, 2011.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
First Trust files with the SEC
July 21, 2011-First Trust has filed a post-effective amendment, registration statement with the SEC for the First Trust ISE Cloud Computing Index Fund.
view filing
Component Changes Made To Dow Jones Emerging Markets Sector Titans Indexes
July 21, 2011--Dow Jones Indexes, a leading global index provider, today announced that Polyus Gold ADS (Russia, Basic Resources, PLZL.RS) will be removed from the Dow Jones Emerging Markets Basic Materials Titans 30 and Dow Jones Emerging Markets Metals & Mining Titans 30 Indexes.
In the Dow Jones Emerging Markets Basic Materials Titans 30 Index, Polyus Gold ADS (Russia, Basic Resources, PLZL.RS) will be replaced by Petronas Chemicals Group Bhd (Malaysia, Chemicals, 5183.KU).
In the Dow Jones Emerging Markets Metals & Mining Titans 30 Index, Polyus Gold ADS (Russia, Basic Resources, PLZL.RS) will be replaced by Industrias Penoles S.A.B. de C.V. (Mexico, Basic Resources, PE&OLES.MX).
Polyus Gold ADS is being removed due to its acquisition by KazakhGold Group Ltd. (Kazakhstan, Basic Resources, KZG.LN). All changes in the Dow Jones Emerging Markets Basic Materials Titans 30 and Dow Jones Emerging Markets Metals & Mining Titans 30 Indexes will be effective as of the open of trading on Tuesday, July 26, 2011.
Further information on the Dow Jones Emerging Markets Sector Titans Indexes can be found at www.djindexes.com
ISDA Marks First Anniversary of Dodd-Frank Act: Clearing, Transparency Drive Improvements in OTC Derivatives Markets
July 21, 2011--At the first anniversary of the Dodd-Frank Act, market participants, policymakers and others are assessing the safety of the over-the-counter (OTC) derivatives markets in light of the legislation as well as efforts the industry has undertaken over the past few years in conjunction with global regulators.
The International Swaps and Derivatives Association, Inc. (ISDA) believes the markets are safer and more efficient today, as evidenced by the following:
•First, more OTC derivatives are being cleared. As of the end of June 2011, nearly $300 trillion of interest rate swaps are centrally cleared. This is up from slightly over $100 trillion at the end of 2007, and now represents well over 50 percent of the global interest rate swap market. Similarly, the volume of uncleared interest rate swaps has fallen from $201 trillion at the end of 2007 to $116 trillion at the end of 2010, the most recent date for which data is available. For both eligible interest rate and credit derivatives, over 90 percent of new transactions are currently being cleared.
TMX Group Board Of Directors Authorizes Discussions With Maple Group Acquisition Corporation
July 21, 2011--TMX Group Inc. today announced that its Board of Directors has authorized management and its advisors to hold discussions with the Maple Group Acquisition Corporation (Maple) regarding its unsolicited offer to acquire TMX Group.
The TMX Group Board is making no recommendation to shareholders regarding the current Maple offer and there can be no assurance that any agreement or recommendation will result from TMX Group's discussions with Maple.
According to the Maple take-over bid circular dated June 10, 2011 as varied on June 24, 2011, the current Maple offer is open for acceptance until August 8, 2011 and is subject to a number of conditions; Maple has publicly disclosed that it expects to complete the Maple offer in the fall of 2011. Therefore, there is no necessity for TMX shareholders to take any action with respect to the Maple offer at this time.
CFTC and SEC Staffs to Host Public Roundtable to Discuss International Issues relating to the Implementation of Title VII of the Dodd-Frank Act
July 21, 2011--The staffs of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) will hold a joint public roundtable on August 1, 2011, from 9:00 am to 4:00 pm, to discuss international issues related to the implementation of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Panelists will be announced at a later date.
The roundtable will be held in the Conference Center at the CFTC’s Headquarters, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC. The discussion will be open to the public with seating on a first-come, first-served basis.
BNP Paribas files with the SEC
July 21, 2011--BNP Paribas has filed a Form S-1 with the SEC for the BNP Paribas Enhanced Volatility Fund.
view filing
Dow Jones Indexes To License Two Israel Sector Indexes For New ETFs
July 21, 2011--Dow Jones Indexes, a leading global index provider, today announced the launch of two sector indexes for Israel – the Dow Jones Israel Select Consumer Index and the Dow Jones Israel Select Oil & Gas Index – which it has licensed to KSM, a leading index product manager in Israel.
Part of the Excellence Nessuah group, KSM will be adding the KSM Dow Jones Consumer Index ETF and the KSM Dow Jones Energy Index ETF to its expanded family of exchange-traded funds (ETFs), which collectively have AUM totaling $5.5 billion as of June 30, 2011. Both of the new KSM ETFs began trading today on the Tel Aviv Stock Exchange.
“The licensing of these two new indexes is indicative of growing interest among Israeli investors in a wider array of index-based products,” said Michael A. Petronella, President, Dow Jones Indexes. “These new indexes will allow investors to make more-precise investment decisions by considering the performance of individual sectors.”
Dow Jones Indexes and KSM have worked together before: in 2004, KSM licensed the iconic Dow Jones Industrial Average from Dow Jones Indexes to issue the KSM Dow Jones 30 – the first ETF traded in Israel.
Massachusetts Suing RBC Capital Over Leveraged ETF Sale
June 20, 2011---Massachusetts’ top securities regulator is suing RBC Capital Markets LLC over the sale of leveraged and inverse exchange-traded funds, saying they sold them to clients who didn’t understand the investments.
Secretary of the Commonwealth William F. Galvin said RBC Capital and Michael D. Zukowski, a former agent, used “dishonest practices” in selling the funds, according to a statement e-mailed today. The lawsuit seeks restitution to Massachusetts investors, a cease and desist order, and an administrative fine.
“The point of the complaint is not that the investors lost money,” Galvin said in the statement. “The dishonesty here is that the investors, and indeed the agent soliciting their investment, did not understand the workings of these funds.”
BM&FBOVESPA Announces Questionnaire For Selection Of 2012 ISE Portfolio - Questionnaire Approved By The ISE Deliberative Council Includes New Transparency Question
Questionnaire approved by the ISE Deliberative Council includes new Transparency question
July 20, 2011--The questionnaire to decide the companies for the 2012 Corporate Sustainability Index (ISE) portfolio is available on the website www.isebvmf.com.br. BM&FBOVESPA announced on Tuesday.
The questionnaire was drawn up by the Sustainability Study Center (GVces) of the Getúlio Vargas Foundation (FGV) and was approved by the ISE Deliberative Council after a public consultation with companies and society, which ended June 24. The eligible companies are on the list of the 200 most traded on the Exchange and must register by July 31 and answer the questions by September 16.
The Index was launched on December 1, 2005, based on methodology developed by GVces and with the financial backing of the International Finance Corporation (IFC). ISE assesses separate sustainability questions as a whole, within the dimensions of General, Nature of the Product, Corporate Governance, Economic-Financial, Social, Environmental, and Climate Change.
BM&FBOVESPA Stock Index Portfolios To Have New Validity Starting Dates As Of September
June 20, 2011--The start of the four-month validity periods for theoretical portfolios for companies included in BM&FBOVESPA indices shall be changed as of September 2011, to the first Monday of January, May and September.
At present the starting dates are on the first business days of these months.
Bank Of America Merrill Lynch Announces Next Generation Trading Platform With Launch Of BofAML Express
July 20, 2011-Bank of America Merrill Lynch today unveiled BofAML Express, the firm's next generation ultra low-latency market access and risk control platform for U.S. equities.
The platform delivers sub 10-microseconds of wire-to-wire latency and provides an embedded series of risk controls required by recent SEC regulation.
Knight Capital Group Announces Consolidated Earnings Of USD0.19 Per Diluted Share For The Second Quarter 2011
July 20, 2011--Equities generated second quarter 2011 revenues of $236.4 million, compared to second quarter 2010 revenues of $305.0 million, due to significantly lower overall U.S. equity volumes and market volatility. Fixed Income, Currencies and Commodities (FICC) second quarter 2011 revenues grew 46% to $88.4 million from second quarter 2010 revenues of $60.4 million, driven by reverse mortgage origination and HMBS securitization, institutional foreign exchange and capital markets.
Knight Capital Group, Inc. (NYSE Euronext: KCG) today reported consolidated earnings of $17.6 million, or $0.19 per diluted share, for the second quarter of 2011.
For the second quarter of 2010, the company reported consolidated earnings of $54.4 million, or $0.58 per diluted share.
Revenues from continuing operations for the second quarter of 2011 were $326.0 million, compared to $366.3 million from continuing operations for the second quarter of 2010.
Horizons launches Canada's first Australian currency ETF
July 20, 2011--Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and BetaPro Management Inc. are pleased to announce the launch of the Horizons Australian Dollar Currency ETF (the "Australian Dollar ETF" or "ASD"), an exchange traded fund ("ETF") which offers investors direct access to foreign currency investing. The Australian Dollar ETF will begin trading on the Toronto Stock Exchange ("TSX") July 20, 2011, under the symbol ASD.
The Australian Dollar ETF seeks to reflect the price in Canadian dollars of the Australian dollar, net of expenses, by investing primarily in cash and cash equivalents that are denominated in the Australian dollar.
ASD is structured as an ETF and therefore has all the characteristics of an ETF, including intraday liquidity, a low cost structure, and portfolio transparency. The Australian Dollar ETF will make monthly distributions of any income earned on the cash and cash equivalents it holds, net of fees and expenses.
