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BNY Mellon's Pershing's Report Uncovers What Advisors Need to be Aware of When Assessing the True Cost of ETF Ownership
Advisors are familiar with the benefits ETFs offer, but more complex issues lie just below the surface
Many of the well-known benefits of exchange traded funds (ETFs), including diversification, lower costs, flexibility and tax efficiency, tend to overshadow the complex features and pricing of these products, according to a whitepaper released today by Pershing LLC., a BNY Mellon company.
The report, What Lies Beneath: Understanding the Structure and Costs in ETFs, outlines underlying components that impact ETF pricing, and identifies areas that advisors should keep in mind when evaluating the true cost of ETF ownership for their clients.
view the What Lies Beneath: Understanding the Structure and Costs in ETFs white paper
Source: BNY Mellon
Deutsche Bank-United States-Synthetic Equity & Index Strategy-US ETF Market Weekly Review
Markets and $9.4bn inflows push ETP
assets up by 1.5%
October 26, 2015--Data in this report is as of Friday, October 23th
Market and Net Cash Flows Review
The US (S&P 500) edged higher by 2.07%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) rose by 0.83% and 0.39%, respectively. In the meantime, performance was mostly positive across US sectors. The Technology (+4.27%) and the Industrials (+3.92%) recorded the largest increases; while, Energy (-1.33%) and Healthcare (-0.73%) were the worst performing sectors. The DB Liquid Commodity Index fell by 2.62%; similarly, the Agriculture sector (DB Diversified Agriculture Index), the WTI Crude Oil, Gold, and Silver prices fell by 0.53%, 5.63%, 1.08% and 1.47%, respectively.
Moving into other asset classes, the 10Y US Treasury Yield increased by 5bps ending at 2.09%. Last but not least, Volatility (VIX) dropped by 3.92% during the same period.
The total US ETP flows from all products registered $9.4bn (+0.5% of AUM) of inflows during last week vs. $5.8bn (+0.3%) of inflows the previous week, setting the YTD weekly flows average at +$4.0bn (+$170.4bn YTD in total cash flows). Equity, Fixed Income, and Commodity ETPs experienced flows of +$6.1bn (+0.4%), +$3.0bn (+0.8%), and +$0.3bn (+0.5%) last week vs. +$5.0bn (+0.3%), +$0.5bn (+0.2%), and +$0.3bn (+0.6%) in the previous week, respectively. Among US sectors, all of them experienced positive flows, Financials (+$0.7bn, +0.9%) and Consumer Staples (+$0.5bn, +3.2%) received the top inflows.
Top 3 ETPs & ETNs by inflows: QQQ (+$1.1bn), LQD (+$0.9bn), HYG (+$0.8bn)
Top 3 ETPs & ETNs by outflows: SPY (-$1.8bn), SHV (-$0.5bn), IEF (-$0.4bn)
New Launch Calendar: FX hedged China A-Shares, China A- and H-Shares, US Large Cap High Dividend
There were four new ETFs listed during the last week. Two of the four new products offer the first FX hedged exposure to the China A-share market; while, the remaining two funds offer exposure to China A and H-Shares market using a dynamic share class arbitrage strategy, and high dividend yielding stocks in the S&P 500 Index.
Turnover Review: Floor activity increased by 8.5%
Total weekly turnover increased by 8.5% to $355.3bn vs. $327.6bn from the previous week. Furthermore, last week's turnover level was 10.4% over last year's weekly average. Equity and Fixed Income ETPs turnover increased by $25.3bn (+8.7%) and $5.6bn (+24.6%), respectively; while, Commodity ETPs turnover decreased by $3.4bn (-35.9%) during the same period.
Asset under Management (AUM) Review: Assets increased by $31.4bn
US ETP assets rose by $31.4bn (+1.5%) totaling $2.114 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +6.8% YTD. Assets for Equity, Fixed Income, and Commodity ETPs moved +$29.1bn, +$3.0bn, and -$0.8bn during last week, respectively.
view report
Source: Deutsche Bank-Synthetic Equity & Index Strategy-Markets Research-North America-United States-US ETF Market
First Asset Announces Acquisition by CI Financial Corp.
October 23, 2015-As announced earlier today by CI Financial Corp. ("CI Financial"), First Asset Capital Corp. ("First Asset") confirmed today that it has agreed to be acquired by CI Financial.
The transaction will result in a change of control of First Asset Investment Management Inc., the investment manager of the Funds listed below.
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Source: First Asset
First Asset Announces Acquisition by CI Financial Corp.
October 23, 2015--As announced earlier today by CI Financial Corp. ("CI Financial"), First Asset Capital Corp. ("First Asset") confirmed today that it has agreed to be acquired by CI Financial.
The transaction will result in a change of control of First Asset Investment Management Inc., the investment manager of the Funds listed below.
view more
Source: First Asset
Infographic-The U.S. Debt Ceiling has Risen No Matter Who is in Office
October 23, 2015--This chart shows the history of the U.S. debt ceiling from 1970 until today, including the current proposal to increase it to $19.6 trillion.
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Source: visualcapitalist.com
State Street Global Advisors Expands SPDR ETF Equity Income Suite
SPYD Offers Investors Exposure to Dividend Paying Stocks in the S&P 500
October 22, 2015--State Street Global Advisors (SSGA), the asset management business of State Street Corporation (NYSE:STT), today announced that the SPDR S&P 500 High Dividend ETF (SPYD) began trading on the NYSE Arca.
Providing access to a portfolio comprised of the 80 highest dividend paying stocks in the S&P 500 Index, SPYD is designed for investors seeking both equity income and the potential for capital appreciation at a relatively low gross expense ratio of 0.12 percent.
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Source: State Street Corporation
SEC Announces Enforcement Results For FY 2015
Results Include Significant Number of High-Impact and First-of-their-Kind Actions
October 22, 2015--The Securities and Exchange Commission today announced that in fiscal year 2015, it continued to build a strong record of first-of--heir-kind cases that spanned the spectrum of the securities industry.
In the fiscal year that ended in September, the SEC filed 807 enforcement actions covering a wide range of misconduct, and obtained orders totaling approximately $4.2 billion in disgorgement and penalties.
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Source: SEC.gov
Alternative ETFs still number one for BNY Mellon
October 22, 2015-Alternative and derivatives strategies continue to be the most popular new products in 2015 so far, making up 25 percent of all BNY Mellon's exchange traded funds (ETFs) launched between 1 January and 30 September.
This is a continuation of the trend from 2014, which also saw these strategies making up a quarter of new launches.
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Source: assetservicingtimes.com
CBO-H.R. 1090, Retail Investor Protection Act
October 21, 2015--H.R. 1090 would prohibit the Secretary of Labor from finalizing a regulation related to certain investment advisors until the Securities and Exchange Commission (SEC) issues a final rule setting standards of conduct for brokers and dealers of securities.
The regulation that would be delayed by the bill will define the circumstances under which an individual is considered to be a fiduciary when providing investment advice to employee retirement and other benefit plans and their participants.
Under current law, the SEC is authorized to develop regulations that establish the same standards of conduct for brokers and dealers that are already in place for investment advisors when providing advice to persons who use the information for personal reasons.
view H.R. 1090
Retail Investor Protection Act
Source: Congressional Budget Office (CBO)
Deutsche Bank-United States-Synthetic Equity & Index Strategy-US ETF Market Weekly Review
Equity ETPs capture $5.0bn during
last week
October 20, 2015--Market and Net Cash Flows Review
The US (S&P 500) edged higher by 0.90%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) rose by 0.29% and 0.71%, respectively. In the meantime, performance was mostly positive across US sectors. The Utilities (+2.30%) and the Healthcare (+1.92%) recorded the largest increases; while, the Industrials (-1.51%) and the Materials (-0.15%) sectors recorded the only decreases.
The DB Liquid Commodity Index fell by 2.15%; similarly, the Agriculture sector (DB Diversified Agriculture Index) and the WTI Crude Oil fell by 0.26% and 4.78%, respectively; meanwhile, Gold and Silver prices rose by 1.73% and 1.41%, respectively.
Moving into other asset classes, the 10Y US Treasury Yield decreased 8bps ending at 2.04%. Last but not least, Volatility (VIX) dropped by 11.89% during the same period.
The total US ETP flows from all products registered $5.8bn (+0.3% of AUM) of inflows during last week vs. $17.1bn (+0.9%) of inflows the previous week, setting the YTD weekly flows average at +$3.8bn (+$160.9bn YTD in total cash flows). Equity, Fixed Income, and Commodity ETPs experienced flows of +$5.0bn (+0.3%), +$0.5bn (+0.2%), and +$0.3bn (+0.6%) last week vs. +$10.7bn (+0.7%), +$6.2bn (+1.8%), and +$0.1bn (+0.2%) in the previous week, respectively. Among US sectors, Energy (+$0.5bn, +1.4%) and Information Technology (+$0.4bn, +1.1%) received the top inflows, while Materials (-$0.3bn, -3.1%) and Healthcare (-$0.2bn, -0.3%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: EZU (+$0.7bn), XLE (+$0.5bn), LQD (+$0.5bn)
Top 3 ETPs & ETNs by outflows: XLF (-$0.5bn), MDY (-$0.4bn), SHY (-$0.3bn)
New Launch Calendar: Cancer Immunotherapy
There was one new ETF listed during the last week. The fund offers thematic exposure to companies that develop therapies to treat cancer, tracking the Loncar Cancer Immunotherapy Index.
Turnover Review: Floor activity decreased by 19.1%
Total weekly turnover decreased by 19.1% to $327.6bn vs. $404.9bn from the previous week. However, last week's turnover level was 1.8% over last year's weekly average. Equity, Fixed Income, and Commodity ETPs turnover decreased by $65.9bn (-18.5%), $11.0bn (-32.5%), and $0.1bn (-0.8%) during the same period, respectively.
Asset under Management (AUM) Review: Assets increased by $16.2bn
US ETP assets rose by $16.2bn (+0.8%) totaling $2.083 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +5.2% YTD. Assets for Equity, Fixed Income, and Commodity ETPs moved +$13.9bn, +$1.5bn, and +$0.8bn during last week, respectively.
view report.
Source: Deutsche Bank-Synthetic Equity & Index Strategy-Markets Research-North America-United States-US ETF Market
