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Investors Pull $2.1 Billion out of Leveraged ETFs
September 11, 2009--Investors pulled nearly $2.1 billion out of inverse and leveraged exchange-traded funds in August, the second consecutive month of losses for the funds, which have come under regulatory scrutiny.
Overall, assets in the 755 ETFs in the U.S. rose $20.1 billion in August, up 3.3% from the previous month, to $661 billion, according to a report from State Street Global Advisors. The increase marks the sixth consecutive month of increases for the funds, which trade daily on exchanges like stocks.
US ETP ASSETS HIT ALL TIME HIGH Contrasting this to the latest data from Strategic Insight, net inflows to mutual funds (excluding ETPs) domiciled in the US were minus US$50.5 Bn in the first six months of 2009.
Deborah Fuhr, Global Head of ETF Research & Implementation Strategy at BGI said, “The net inflows of US$54.3 Bn in the past eight months shows demand for ETPs is still growing as clients view ETPs as useful tools to help them implement many types of exposures”. Fixed income ETPs have seen the largest net inflows with US$29.5 Bn net new assets YTD. The most popular fixed income exposure has been Corporate bond ETPs with US$8.7 Bn net inflows, followed by inflation linked ETPs with US$6.7 Bn, and ETPs tracking aggregate bond benchmarks with US$4.3 Bn. Commodity focused ETPs was the second most popular asset category in terms of net flows, with US$23.8 Bn. Precious metals commodity ETPs grew the most with US$12.9 Bn net new assets, followed by energy ETPs with US$5.0 Bn and broad commodity exposures with US$3.7 Bn. Emerging markets equity ETPs was the third most popular asset category with US$12.9 Bn net inflows. Broad emerging market equity exposures saw net inflows of US$6.1 Bn YTD, followed by Brazil focused ETPs with US$2.2 Bn, and ETPs tracking Chinese benchmarks with US$1.3 Bn net new assets.
XTF Enhances Country Rotation and Fixed Income ETF Portfolios
Latest data from the ETF Research and Implementation Strategy team at Barclays Global Investors reveals US ETP net inflows of US$54.3 Bn push US ETP Assets to an all time high of US$678 bn at end August 2009, driven by fixed income, commodity and emerging market ETPs.
The US ETP industry had 846 ETPs, net new inflows of US$54.3 Bn YTD with total assets of US$678 bn from 36 providers on 3 exchanges at the end of August 2009. YTD assets have risen by 25.1% which is more than the 13.5% rise in the MSCI US Index in US dollar terms.
Adds Seven New Countries to Rotation Portfolio, Adds Fixed Income Asset Classes
January 15, 2008 -- XTF Global Asset Management, an asset manager that builds and manages portfolios of ETFs, today announced that it has added seven new country-focused ETFs to its country rotation portfolio. XTF also announced that it has enhanced its fixed-income ETF portfolio by adding several fixed income asset classes. These product enhancements are designed to leverage the diversity and appeal of new ETFs that came to market in 2007.
The seven new country ETFs increase XTF's Country Rotation Portfolio's (CRP) exposure to emerging markets. New countries include: Spain, Mexico, Sweden, South Korea, Malaysia, China and Taiwan. The CRP now can invest in up to 20 ETFs that each track the economies of foreign countries. Previously, CRP invested in up to 13 countries, including: The Netherlands, Germany, France, Switzerland, Italy, United Kingdom, Belgium, Australia, Singapore, Hong Kong, Japan, Canada and South Africa.
"We've been tracking these seven countries' financial and economic data over the past year and determined that it is now appropriate to add them to our portfolio," said Jeff Buetow, XTF's chief investment officer. "We initially limited the CRP to developed markets to take advantage of the safety of their long track records as well as the sound structural characteristics of the corresponding ETFs. Now that emerging market ETFs have become far more attractive from an investment perspective, we believe it's the right time to provide emerging market exposure as part of a well diversified portfolio."
Since its January 2007 inception, the CRP has outperformed its benchmark index, the Country Rotation Composite Index, by nearly 200 basis points. Part of its success is due to XTF's model-driven investment approach, which actively manages exposure to foreign equity markets. The model tracks foreign equity market economies, fundamentals, risk and technical factors, generating buy or sell signals for each country. The CRP's performance to date validates this approach.
The CRP is designed to take advantage of changes in the risk and the appreciation potential of the individual countries it follows. XTF models each country independently, and compares its risk/reward profile to an equivalent investment in intermediate-term U.S. Treasuries. If the country profile is favorable versus U.S. Treasury yields, XTF invests in the country. Alternatively, if Treasuries are more favorable, XTF invests in the Treasuries. Each country in the CRP is equally weighted at five percent of the overall portfolio. XTF uses a binary investment strategy, and makes an "all or none" decision to invest in each country.
"The Country Rotation Portfolio is designed to function as an enhancement to investors' core portfolio. By taking a broad, long-term view of international equities, CRP also is a strategy that investors can deploy to mitigate against short-term volatility in their portfolios," said Tom Scuccimarra, XTF's head of sales and distribution. "By moving into fixed income ETFs, we can hedge against potential downturns in the foreign equity markets, stabilizing investor portfolios further."
