Americas ETP News
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Vanguard program puts funds together in client portfolios
February 24, 2015--The Vanguard Group is selling to investors model portfolios with assets of about $1.6 billion in what's occasionally called the exchange-traded fund strategist business.
Mike Lucci, a senior sales strategist at Vanguard, said the Vanguard ETF strategic model portfolio program is in response to demand...
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Source: SmartBrief
Exclusive: BATS Global Markets names Concannon CEO as of March 31
February 24, 2015--BATS Global Markets is appointing Chris Concannon, who recently joined it from electronic trading firm Virtu Financial LLC, to succeed Joseph Ratterman as chief executive officer of the exchange operator, Ratterman said in an interview on Tuesday.
Concannon, 47, who until December was chief operating officer of Virtu, said BATS was mulling expansion moves including opening a second U.S. options exchange. He will take over as CEO from Ratterman, 48, on March 31.
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Source: Reuters
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly Review-Equity ETPs received $1.2bn inflows
February 24, 2015--Data in this report is as of Friday, February 20
Market and Net Cash Flows Review
The US (S&P 500) edged higher by 0.63%; while outside the US, the MSCI EAFE (in USD) rose by 1.55% and the MSCI EM (USD) dropped by 0.21%. In the meantime, performance was mostly positive across US sectors. The Healthcare (+1.93%) and the Industrials (+1.63%) sectors recorded the largest increases; meanwhile, the Energy (-1.89%) sector recorded the only decrease.
The DB Liquid Commodity Index fell by 1.94%; similarly, the Agriculture sector (DB Diversified Agriculture Index), the WTI Crude Oil, Gold, and Silver prices fell by 1.70%, 4.62%, 2.24%, and 6.44%, respectively. Moving into other asset classes, the 10Y US Treasury Yield rose by 11bps ending at 2.13%. Last but not least, Volatility (VIX) dropped by 2.65% during the same period.
The total US ETP flows from all products registered $2.2bn (+0.1% of AUM) of inflows during last week vs. $8.8bn (+0.4%) of inflows the previous week, setting the YTD weekly flows average at +$2.7bn (+$21.7bn YTD in total cash flows). Equity, Fixed Income, and Commodity ETPs experienced flows of +$1.2bn (+0.1%), +$0.7bn (+0.2%), and +$0.2bn (+0.3%) last week vs. +$6.5bn (+0.4%), +$2.0bn (+0.6%), and +$0.2bn (+0.3%) in the previous week, respectively. Among US sectors, Healthcare (+$0.5bn, +1.2%) and Energy (+$0.3bn, +0.9%) received the top inflows, while Utilities (-$1.0bn, -7.8%) and Financials (-$0.3bn, -0.3%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: QQQ (+$0.7bn), IJH (+$0.6bn), XLE (+$0.6bn)
Top 3 ETPs & ETNs by outflows: SPY (-$4.6bn), IEF (-$0.8bn), IVV (-$0.6bn)
New Launch Calendar: Floating Rate, U.S. Treasury, Coal Futures
There were three new actively managed ETFs listed during the previous week. The new products offer exposure to a portfolio comprised of income producing floating rate loans and debt securities, to U.S. Treasury via futures contracts and options on futures weighted to achieve a negative 10Y average effective portfolio duration, and to coal futures contracts.
Turnover Review: Floor activity decreased by 20.7%
Total weekly turnover decreased by 20.7% to $251.2bn vs. $317.0bn from the previous week; furthermore, last week's turnover level was 22.0% below last year's weekly average. Equity, Fixed Income, and Commodity ETPs turnover decreased by $61.9bn (-22.3%), $1.3bn (-5.3%), and $1.0bn (-9.9%) during the same period, respectively.
Assets under Management (AUM) Review: Assets increased by $12.5bn
request report Morgan Stanley-US ETF Weekly Update
ETFs posted net inflows of $2.2 bln last week; fifth consecutive week of net inflows
13-week flows remain positive among most asset classes; combined $80.2 bln in net inflows US-Listed ETFs: Estimated Largest Flows by Individual ETF
PowerShares QQQ (QQQ) posted net inflows of $678 mln last week, leading all ETFs US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading was essentially flat in January at 29% relative to December; over the last 5 years, ETF monthly $ volume as a % of listed trading volume averaged 28%
Over the last five years, ETF monthly $ volume as a % of listed trading volume peaked in August 2011 at 36%
ETF $ volume decreased by $67 bln last week compared to the prior week amid a shortened trading week
US Large-Cap ETFs accounted for 40% of ETF $ volume last week, below their 43% 13-week average; US Large-Cap ETFs make up 26% of ETF market share US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 1/30/15
SPDR S&P 500 ETF (SPY) had the largest increase in USD short interest at $2.1 bln
The average shares short/shares outstanding for ETFs is currently 3.6%, down from 3.8% last period US-Listed ETFs: Most Successful Recent Launches by Assets
$10.9 bln in total market cap of ETFs less than 1-year old
The top 10 most successful launches make up 56% of the market cap of ETFs launched over the past year request report BlackRock set to launch first 'smart beta' bond fund view more
Obama calls for higher standards on brokers giving retirement advice view more U.S. commissioner calls for more rigorous review of risky ETFs view more
FACT SHEET: Middle Class Economics: Strengthening Retirement Security by Cracking Down on Backdoor Payments and Hidden Fees view more
Big money managers warming to ETFs view more First Trust to Cross-List the First Trust Dorsey Wright Focus 5 ETF in Mexico view more
Source:Deutsche Bank-Synthetic Equity & Index Strategy-North America
February 23, 2015--Weekly Flows: $2.2 Billion Net Inflows
Fifth Consecutive Week of Net Inflows
High-conviction ETF Recommendations Slide
ETF Assets Stand at $2.1 Trillion, Up 4% YTD
Three ETF Launches Last Week
US-Listed ETFs: Estimated Flows by Market Segment
Last week's net inflows were led by International - Developed ETFs at $3.0 bln; conversely, US Large-Cap ETFs posted net outflows of $4.3 bln, the most of any category we measured
US Large-Cap outflows last week were driven by the SPDR S&P 500 ETF (SPY) at $4.6 bln
Twelve of the 15 categories we measured posted net inflows last week
ETF assets stand at $2.1 tln, up 4% YTD
Fixed Income ETFs generated net inflows of $27.1 bln over the last 13 weeks, the most of any category, and accounted for 37% of total ETF net inflows
Interestingly, Commodity ETFs appear to have turned the corner as 13-week flows are currently in positive territory, up $3.8 bln over the last 13 weeks; Commodity ETFs have struggled the past couple of years primarily driven by a decline in gold prices
Despite QQQ's net inflows last week, over the last 13 weeks, the fund has exhibited net outflows of $5.8 bln
The Energy Select Sector SPDR (XLE) generated net inflows of $560 mln last week; over the last 13 weeks, XLE has posted net inflows of $3.5 bln
The WisdomTree Europe Hedged Equity Fund (HEDJ) had another positive week of net flows at $480 mln; over the last 13 weeks, HEDJ generated net inflows of $6.3 bln, more than any ETF, and 56% of its current market cap
Three utilities ETFs, First Trust Utilities AlphaDEX Fund (FXU), iShares U.S. Utilities ETF (IDU), and Vanguard Utilities ETF (VPU) exhibited a combined $1.0 bln in net outflows as we've experienced some negative sentiment around defensive sectors
Despite SPY's recent increase in shares short, its 228 mln shares short are 9% below its 52-week average
Notably, shares short for the Energy Select Sector SPDR (XLE) are at 54 mln and have declined for four consecutive periods
670 ETFs exhibited short interest increases while 659 experienced short interest declines over the last period
Aggregate ETF USD short interest declined by $751 mln over the period ended 1/30/15
For the fifth straight period, the CurrencyShares Euro Trust (FXE) was the most heavily shorted ETF as a % of shares outstanding at 240%, but is down from the prior period's 457%
Eight of the 10 most heavily shorted ETFs as a % of shares outstanding are sector based (SMH, BBC, DRV, XBI, XOP, XRT, IYR, KRE)
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only six ETFs exhibited shares short as a % of shares outstanding greater than or equal to 100%)
Active ETFs make up 33% of recently launched ETF market share, the most of any ETF category; based on the number of SEC filings, we anticipate Active ETF issuance to remain robust
Twenty-seven new ETF listings and 21 closures YTD
Four ETF sponsors and three asset classes (equity, fixed income, and commodity) were represented in top 10 most successful launches
The First Trust Dorsey Wright Focus 5 ETF (FV) generated net inflows of $96 mln last week, the most of any recently launched ETF; FV owns a basket of five First Trust sector and industry ETFs selected based on relative strength
Notably, the iShares Core Total USD Bond Market ETF (IUSB) had net outflows of $15 mln last week, one of only nine recently launched ETFs to post a net outflow
Source: Morgan Stanley
February 23, 2015--BlackRock Inc is planning to launch its first so-called "smart beta" bond fund that will adjust the holdings of a traditional bond index to achieve an equal balance of credit and interest rate risk.
The fund, which is set to launch on Thursday, arrives at a time when the market for smart beta funds, or those that use factors other than market capitalization to weight their holdings, has been rapidly expanding in the equity space but is still in nascent stages for the fixed-income market.
Source: Reuters
February 23, 2015--President Obama called on the Department of Labor to crack down on the "backdoor payments" and "hidden fees" paid to brokers giving retirement advice.
The president endorsed a new rule proposed by the Labor Department on Monday that would increase the standards for brokers who recommend investments for retirement accounts, requiring brokers to have the client's best interests in mind.
Source: Washington Post
February 23, 2015--A top member of a U.S. securities regulator on Monday called for a more transparent and rigorous review process before approving rule changes to list riskier exchange-traded funds that she believes could harm retail investors.
Securities and Exchange Commission Democratic member Kara Stein called for the reforms as part of a three-page dissent over a rule change that paved the way for seven new exchange-traded funds from AccuShares Investment Management LLC to list on the Nasdaq stock market exchange.
Source: Reuters
February 23, 2015--Middle class economics means that Americans should be able to retire with dignity after a lifetime of hard work. But today, the rules of the road do not ensure that financial advisers act in the best interest of their clients when they give retirement investment advice, and it's hurting millions of working and middle class families.
A system where Wall Street firms benefit from backdoor payments and hidden fees if they talk responsible Americans into buying bad retirement investments-with high costs and low returns-instead of recommending quality investments isn't fair. These conflicts of interest are costing middle class families and individuals billions of dollars every year. On average, they result in annual losses of 1 percentage point for affected investors. To demonstrate how small differences can add up: A 1 percentage point lower return could reduce your savings by more than a quarter over 35 years. In other words, instead of a $10,000 retirement investment growing to more than $38,000 over that period after adjusting for inflation, it would be just over $27,500.
Source: White House
February 20, 2015--The growth of exchange-traded funds in Canada has been slow but steady over the past few years, but budding new relationships between so-called ETF strategists that build portfolios and some of the country's biggest investment sales platforms could accelerate their adoption.
There are now 22 managers offering 46 ETF portfolios with a combined total of more than $10 billion in assets under management, according to iShares Connect program in Canada, a database of ETF investment strategists doing business in the country.
Source: Financial Post
An index-tracking ETF based on Dorsey Wright's systematic momentum strategy for sector rotation using their relative strength ranking system
February 20, 2015--First Trust Advisors L.P. ("First Trust") a global ETF provider and asset manager, announced that it has cross listed the First Trust Dorsey Wright Focus 5 ETF (NASDAQ: FV) on the Mexican stock exchange, Bolsa Mexicana de Valores (BMV).
The fund seeks investment results that correspond generally to the price and yield (before the fund's fees and expenses) of an equity index called the Dorsey Wright Focus Five Index (the "index").
Source: First Trust Advisors
