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State Street Global Advisors-ETF SNAPSHOT: January 2010
February 9, 2011--STATE STREET HIGHLIGHTS, JANUARY 2011
As of January 31, 2011, 972 Exchange Traded Funds (ETFs)—with assets totaling approximately $1.0TN—were managed by 33 ETF managers.
ETF industry assets rose $8.8BN for the month—up 0.9%
State Street announces three new additions to its industry ETF family:
SPDR® S&P® Transportation ETF [XTN] – an equal-weighted fund that includes 32 transportation companies with market capitalizations of at least $400MM.
SPDR S&P Telecom ETF [XTL] – an equal-weighted fund that includes 27 telecom companies with market capitalizations of at least $400MM.
SPDR S&P Healthcare Equipment ETF [XHE] – an equal-weighted fund that includes 30 healthcare equipment companies with market capitalizations of at least $400MM.
ETF Industry Detail
ASSET CLASSES ? OVERALL
Both the S&P 500® Index and MSCI EAFE® Index rose 2.7%. US bonds were relatively unchanged with the Barclays U.S. Treasury Index falling 0.02% and the Barclays U.S. Aggregate Index rising 0.1%. Gold fell 5.6%, to $1,327 per ounce.
Large Cap gains were driven mainly by inflows to the SPDR S&P 500. Losses in Emerging Markets were driven by a combination of negative performance and outflows. Commodity losses were mostly attributed to negitive performance in the gold market.
FLOWS
ETF flows topped $9BN—the fifth consecutive month of positive flows. Large Cap and Fixed Income have the most inflows with $6.6 and $2.9BN, respectively. International-Emerging and Commodities had the most outflows, losing $4.5BN and $2.7BN, respectively. Small Caps had more than $1.4BN in outflows.
For more detail , please visit www.spdrs.com.
Horizons BetaPro Launches North America's First Single Copper ETF
February 9, 2011--BetaPro Management Inc. ("BetaPro"), the manager of the Horizons BetaPro exchange traded funds ("ETFs"), is pleased to announce the listing of North America's first non-leveraged ETF that offers exposure to the daily price performance of copper futures contracts. The Horizons BetaPro COMEX® Copper ETF will begin trading on the Toronto Stock Exchange today under the ticker symbol HUK.
HUK is BetaPro's third offering that offers investors the opportunity to gain exposure to market changes in copper futures contracts.
"Back in June of 2010, we launched the first leveraged copper futures ETFs in North America, listed on the TSX as HKU and HKD. Since then, copper prices have reached record highs and global interest in this important metal has increased. With HUK we are expanding our ETF line up to give investors more choice to gain exposure to copper prices," said Howard Atkinson, President of BetaPro.
Mr. Atkinson pointed out that, outside of going directly to the futures markets, the only way investors can get access to copper through an ETF structure is indirectly through ETFs that track base metal equities.
"In our view, using an ETF linked to the return of copper futures is the most direct and efficient way to invest in copper," Mr. Atkinson said. "While past performance is not indicative of future performance, investors who have bought copper over the last six months have been well-rewarded, as it is generally viewed that the economic recovery in the emerging markets such as China has led to increases in demand for this metal, which is an essential commodity for industrialization and electronics manufacturing."
The Copper ETF seeks investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to the performance of the COMEX® copper futures contract for a subsequent delivery month. The Copper ETF is denominated in Canadian dollars. Any U.S. dollar gains or losses as a result of the Copper ETF's investment will be hedged back to the Canadian dollar to the best of its ability.
HUK has closed the initial offering of its units and will begin trading on the TSX today, when the market opens this morning.
Russell Launches "Stability" Indexes - Innovative Investment Style Indexes Complement Growth And Value Set
February 9, 2011--Russell Investments, creator of the most widely used equity benchmarks for institutional investment products, announced today the launch of the Russell Stability Indexes – offering a third dimension to its multi-factor style indexes.
These new indexes are designed to represent certain stock characteristics not taken into account by existing style indexes, offering benchmark clients another means of tracking investments than traditional growth and value indexes.
MSCI To Consult On A Proposal To Construct - MSCI Global Socially Responsible Indices
February 9, 2011--MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, including indices, portfolio risk and performance analytics and corporate governance services , announced today that it will consult with the investment community on a proposal to construct MSCI Global Socially Responsible Indices.
The proposed indices aim to support the benchmarking and other index related needs of investors who seek to invest in accordance with their values such as religious beliefs, moral standards or ethical views. The proposed indices will exclude companies that are inconsistent with specific values based criteria and will target companies with high ESG ratings relative to their sector peers.
Institutional investors have leading share among ETFs traded on the Exchange in January
February 9, 2011--The participation of institutional investors in the total volume of Exchange-traded funds (ETFs) on the Exchange reached 50.7% in January. The participation of foreign investors 23.1% and of financial institutions was at 14.2%. Individual investors had a 10.8% market share of total market volume. Public and private sector companies had 1.2%.
ETFs are a simple alternative for the diversification of investment in variable income. In a single transaction the investor can buy a stock portfolio without having to individually manage each of its shares.
U.S. Corporate Bond Market: A Review of Fourth-Quarter and 2010 Rating and Issuance Activity.
January 8, 2011--Summary
In the span of three years, the U.S. corporate bond market has undergone some
significant changes. The share of outstanding bonds rated speculative grade ballooned to 23.9% of market volume by year-end 2010 from 17.5% as recently as 2007.
Investment-grade downgrades ? a product of the financial crisis and severe 2008/2009 recession ? and exceptionally strong high yield bond issuance contributed to the rapidly expanding speculative grade universe. In addition, the share of the U.S.
corporate bond market consisting of industrial bonds now stands at $2.5 trillion (66% of market volume) up from $1.9 trillion in 2007, while financial issues total $1.3 trillion
(34% of market volume), down from $1.9 trillion in 2007.
Rating activity in 2010 was far more moderate and balanced than in 2009. Par downgrades plunged 84% year over year, affecting 3.9% of market volume versus 2009’s grim 23% downgrade rate, while upgrades affected a slightly higher 4% of outstanding bonds.
Cyber-attack raises SEC questions
February 8, 2011--US lawmakers have questioned the Security and Exchange Commission’s ability to fight cybercrime after the attempted hacking of the Nasdaq OMX stock exchange.
In a letter to the SEC, Senator Robert Menendez of New Jersey said that the “disturbing information” about the hacking raised questions about the regulator’s preparedness to fight such attacks.
Nasdaq looks to derivatives to boost margins
February 8, 2011---Outside the office window of Robert Greifeld, chief executive of Nasdaq the global exchange operator, progress on the Ground Zero rebuilding is visible, with the Freedom Tower up to 40 storeys.
Mr Greifeld, meanwhile, is presiding over Nasdaq’s own transformation, from a stock exchange to a more diversified group, the fruits of which he hopes will soon be visible to investors.
Hedge funds search for way to short munis
February 8, 2011--How do you “short” an indebted US state? As fears grow over the scale of a crisis some believe could rival the debt problems of the eurozone, hedge funds and other investors are looking at how to trade the market in America’s municipal debt.
For decades, this $3,000bn bond market was safe, predictable and dull. The traditional buyers of the bonds issued by states, cities and other local bodies were wealthy local residents lured to them by the tax breaks on offer for individual investors. They bought the bonds, held them until they matured and then bought more.
CBOE To Begin Publishing Values For CBOE S&P 500 Skew Index
February 7, 2011---- The Chicago Board Options Exchange (CBOE) announced today that on Wednesday, February 23, the Exchange will begin publishing values for the CBOE S&P 500 Skew Index (ticker symbol: SKEW), a benchmark measure of the perceived risk of extreme negative moves — often referred to as "tail risk" or a "black swan" event — in U.S. equity markets.
"We are excited about adding yet another valuable tool to our rapidly growing suite of volatility benchmarks," CBOE Chairman and CEO William J. Brodsky said. "The CBOE S&P 500 Skew Index will join our highly successful CBOE Volatility Index (VIX) in measuring the market's expectation of stock market risk based on S&P 500 options prices. It offers an important new measure for investors who are concerned about potential market moves driven by unusual, high-impact events."
Credit Suisse files with the SEC
February 7, 2011--Credit Suisse has filed a Pricing Supplement Addendum No.8 with the SEC for Exchange Traded Notes due April 20, 2020 Linked to the Credit Suisse Long/Short Index (Net) (“ETNs”).
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SEC sets sights on mortgage disclosures
February 7, 2011--US securities regulators investigating the role of banks in the mortgage crisis are homing in on the question of whether investors were misled about the home loans used to back securities.
The Securities and Exchange Commission and other regulators have been investigating a wide range of banking activities in connection with mortgages that were packaged into securities and sold to investors.
Emerging Global Advisors Names Marten S. Hoekstra CEO
Former CEO of UBS' Wealth Management America to Lead Emerging Markets Asset Manager
February 7, 2011--Emerging Global Advisors, an asset management company specializing in more precise exposures to emerging market investment opportunities, today announced that Marten S. Hoekstra has joined the firm as Chief Executive Officer.
Mr. Hoekstra was most recently CEO of UBS Wealth Management Americas and a member of parent company UBS' Group Executive Board.
He assumes the CEO position from founder Robert Holderith, who will continue as president and concentrate on investment product development, a discipline that has been a primary focus throughout Mr. Holderith’s career.
"Emerging markets are becoming an increasingly important area for US investors pursuing growth strategies and we are on the forefront of offering more preciseinvestment exposures with better tools to execute these strategies,” said Mr. Holderith. “We aim to be the leading brand for emerging market investing and Marten has the global vision and experience to ensure we achieve our goals and objectives. We are significantly advantaged having him lead our team.”
Emerging Global Advisors is advisor to the EGShares family of exchange-traded funds (ETFs), which target specific investment sectors or themes and allow investors access to more precise market exposures. The company currently manages nine emerging market ETF products offering exposures to the energy, financial, and mining and minerals sectors, emerging market consumers, and the respective infrastructures of Brazil, India, or China. Additional ETFs and other investment products are planned.
Exchange-Traded Funds: US ETF Weekly Update Morgan Stanley
February 7, 2011--Weekly Flows: $2 Billion Net Outflows
ETFsTraded $309 Billion Last Week
Launches: 2 New ETFs-DirexionAnnounces Reverse Share Splits
Sector SPDR Expense Ratios Cut
Egypt ETF Stops Accepting Creation Units
US-Listed ETFs: Estimated Flows by Market Segment
ETFs had net outflows of $2 billion last week; second consecutive week of net outflows
Net outflows were led by EM Equity and US Large-Cap ETFslast week (combined $6 billion net outflows)
ETF assets stand at more than $1 trillion, nearly doubling overthe past two years
13-week flows are mixed among asset classes
$31 billion of net inflows into ETFs over past 13 weeks (89% into US Equity ETFs)
The $4.2 billion of net outflows for Emerging Markets (EM) ETFsis primarily related to the $9.6 billion of net outflows for iSharesEM Index Fund (EEM). Over the same period, Vanguard EM ETF (VWO) had net inflows of $3.8 billion.
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) exhibited largest net outflows last week
SPY & EEM posted net outflows over past 1-, 4-, 13-wk periods
Powershares QQQ (QQQQ) generated net inflows of $827 mlnlast week, the most of any ETFS
DB Index & ETF Research: US ETF Market Weekly Review : Strong inflows of $11 bn defy January's usual drought
February 4, 2011--New content and New Measures for the New Year
Following our annual review recess, with this report we resume the publication of our weeklies. In addition, we have made some enhancements to our report, such as a weekly commentary section, ETN data reported separately from ETP data, and new weekly turnover measure. Please see our “Message to Our Readers” section for more details.
Strong ETP Flows kick off the 2011 game
ETPs had a fantastic year on 2010 cashing in a $115 bn across-the-board inflow, topped with a year-ending of around $1 trillion in AUM. In the same line, without a sign of slowing down, the ETP industry opened the year at full speed with 19 new product launches, strong asset inflows of $11 bn YTD, and a great outlook for its main asset class: US Equities.
Total US ETP flows for the last week registered $2.7 bn of outflows vs $2.1 bn inflows the previous week, setting the YTD weekly flows average at +$2.8 bn. US ETPs AUM keep establishing a threshold above the trillion dollar with $1.01 trillion so far.
Equity ETPs, driven by US equities reallocation, gathered $10.7 bn since the beginning of the year, coming out of the January outflow pattern we have seen since 2007. Emerging Markets ETPs flows, the big equity story of 2010, stands shamefully at a $2.4 bn outflow. While throughout 2010, Broad EM ETPs sheltered the bulk of the new assets, we have seen investors favoring country EM ETPs during 2011 instead. In addition, Fixed Income ETPs have cashed in a surprising $3.1 bn of new flows YTD (Corporates,+$2.0 bn; Sovereign, +$943 mm). Finally, Gold ETPs have experienced their largest outflow (-$2.7 bn), during the same 4-week period. Please see the weekly commentary section for more details.
New Launch Calendar: Quantity and diversity sets the tone
After a quiet year ending, new product activity jump-started with 19 new products coming to market in the first four weeks of the year. The new products listed at NYSE Arca, provide investors with new choices to access distinct return streams in the way of Alternative, Equity, Fixed Income, and Commodity ETPs.
Turnover Review
Turnover has picked up since the end of last year. Last week’s total ETP turnover was $349 bn vs $253 bn the previous week. This represented an increase of about 38% from the previous week (with 4 days only), and a 3.7% increase over last year’s weekly average. Week over week, turnover increased more substantially in Equity (+$81 bn, 37%) and Commodity (+$10 bn, 61%) ETPs.
Assets Under Management (AUM) Review
Mainly driven by a small correction in the equity markets and a flight from emerging markets equities and gold, overall assets decreased by 0.6%, from the previous week, sitting at $1.01 trillion at the end of the week. Year to date US ETPs AUM have increased $8.0 bn or 0.8%.
