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SEC Adopts Cross-Border Security-Based Swap Rules
June 25, 2014--The Securities and Exchange Commission today adopted the first of a series of rules and guidance on cross-border security-based swap activities for market participants.
The new rules will be key to finalizing the remaining proposals.
The rules and guidance explain when a cross-border transaction must be counted toward the requirement to register as a security-based swap dealer or major security-based swap participant. The rules also address the scope of the SEC's cross-border anti-fraud authority.
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Source: SEC.gov
Market Vectors(R) ChinaAMC A-Share ETF (PEK) Will Release Cap Gains Tax Reserve Back to ETF
June 25, 2014--As of market close on June 26, 2014, Market Vectors(R) ChinaAMC A-Share ETF (nyse arca:PEK(R)) will release its capital gains tax reserve back to PEK, it was announced today. The reserve's release will add $0.07872 per share to PEK's Net Asset Value.
Effective on June 26, 2014 at market close, PEK will no longer reserve 10 percent of its realized and unrealized gains from its A-Shares investments to meet any potential withholding tax liability that may be imposed by the People's Republic of China, except with respect to realized and unrealized gains from PEK's investments in A-Shares of land-rich enterprises, which are companies that have greater than 50% of their assets in land or real properties in China.
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Source: MarketWatch
SEI Study: Active Exchange Traded Funds Remain On Growth Trajectory In 2014
Market Grew by 30 Products, $2.5 Billion AUM in Past Year
June 25, 2014--Actively managed exchange traded funds (ETFs) have seen significant growth in the number of products offered and assets under management over the past year and continue to gain popularity as an investment vehicle, according to a paper released today by SEI.
The paper, "Active ETFs: Revisited," notes that the active ETF market has grown by nearly 30 products and more than $2.5 billion assets under management in the past 12 months.
This upward trend further demonstrates the attractiveness of active ETFs to both financial advisors and investors due to their lower costs, increased transparency and liquidity, and potential tax efficiency when compared to mutual funds.
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Source: SEI
IMF Colombia: Selected Issues Paper
June 23, 2014-- Summary: Colombia has a strong fiscal framework that prescribes a prudent, albeit challenging, fiscal consolidation over the medium term.
A number of changes have taken place over the past decade and a half to strengthen Colombia's fiscal framework, including the introduction of a structural balance rule at the central government level. This rule prescribes a path of adjustment over the medium-term, which would compare well to standard benchmarks on the intertemporal use of fiscal revenue from resource wealth. However, achieving the adjustment will be challenging. An increase in revenues could help achieve the consolidation envisioned in the fiscal framework without unprecedented or undesirable reductions in expenditure.
view the IMF Colombia: Selected Issues Paper
Source: IMF
Fidelity's Sector ETFs Pass the $1 Billion Mark
June 23, 2014--Fidelity has passed the $1 billion mark in assets under management for the 10 sector ETFs it launched last October.
Assets in these exchange-traded funds have tripled from the start of 2014. Fidelity joins other fairly recent ETF entrants such as Deutsche Bank, Global X and Emerging Global Advisors in reaching the $1 billion milestone.
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Source: Bloomberg
Morgan Stanely-US ETF Weekly Update
June 23, 2014--US ETF Weekly Update
Weekly Flows: $7.7 Billion Net Inflows
6th Consecutive Week of ETF Net Inflows
ETFs Have Generated Net Inflows 18 of 25 Weeks YTD
ETF Assets Stand at $1.8 Trillion, Up 9% YTD
One ETF Launch Last Week
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $7.7 bln last week, the sixth consecutive week of net inflows
Last week's net inflows were led by US Large-Cap ETFs at $3.3 bln; conversely, Fixed Income ETFs posted net outflows of $2.8 bln, the most of any category we measured
Eleven of the 15 categories we measured posted net inflows last week; ETFs have generated net inflows 18 of the 25 weeks YTD
ETF assets stand at $1.8 tln, up 9% YTD
13-week flows remain positive among asset classes; combined $43.9 bln in net inflows
Despite negative flows last week, Fixed Income ETFs generated $12.1 bln in net inflows over the last 13 weeks, the most of any category we measured; Fixed Income ETFs currently have a 14% market share, lagging only US Large-Cap ETFs - US Small- & Micro-Cap ETFs have exhibited net outflows of $6.2 bln over the last 13 weeks, the most of any category
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $2.0 bln this past week, the most of any ETF
The 10 ETFs to generate the largest net inflows last week were US equity-based
The Consumer Staples Select Sector SPDR (XLP) also had a strong week, posting net inflows of $1.7 bln; XLP’s net inflows account for 24% of its current market cap
The iShares 7-10 Year Treasury Bond ETF (IEF) exhibited net outflows of $3.3 bln last week, the most of any ETF; interestingly, yield on the 10 Year Treasury was essentially flat last week
Over the last 13 weeks, the iShares MSCI Emerging Markets ETF (EEM) posted net inflows of $6.8 bln, the most of any ETF as money has flocked to emerging market equity ETFs
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume decreased in May to 24%, down from 25% the prior month; 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 was $51 bln higher last week compared to the prior week, and is essentially in-line with its 13-week average
US Mid-Cap ETFs accounted for 3% of ETF $ volume last week, which is above its 13-week average of 1%
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 5/30/14
SPDR S&P 500 ETF (SPY) had the largest increase in USD short interest at $2.5 bln
The iShares MSCI EAFE ETF (EFA) also had a jump in short interest ($223 mln) and EFA’s shares short are at their highest level since the period ended 10/31/13; notably, EFA is up nearly 7% since 10/31/13
610 ETFs exhibited short interest increases while 651 experienced short interest declines over the last period
Aggregate ETF USD short interest increased by $581 mln over the period ended 5/30/14
The average shares short/shares outstanding for ETFs is currently 4.0%, equal to last period
The SPDR Retail ETF (XRT) is the most heavily shorted ETF as measured by shares short/shares outstanding for the fifth consecutive period at 316%
Five of the 10 most heavily shorted ETFs as a % of shares outstanding are industry based (XRT, XOP, IYR, XBI, SMH)
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only seven ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
$8.3 bln in total market cap of ETFs less than 1-year old
More International - Developed ETFs were launched over the past year than any other category that we measured; International - Developed ETFs account for 22% of market share of ETFs launched over the last year
While only accounting for 13% of recently launched market share, US Sector & Industry ETFs exhibited net inflows of $494 mln over the last 13 weeks, the most of any category
95 new ETF listings and 19 closures YTD
The top 10 most successful launches make up 37% of the market cap of ETFs launched over the past year
Eight ETF sponsors and two asset classes (equities and fixed income) were represented in top 10 most successful launches
Despite not cracking the top 10 most successful launches, the Direxion Daily Junior Gold Miners Index Bear 3x Shares (JDST) generated net inflows of $23 mln last week, the most of any recently launched ETF; JDST is a leveraged inverse investment on gold mining equities
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Source: Morgan Stanley
State Street Launches Six International Quality ETFs-ETF News And Commentary
June 20, 2014--With the World Bank having recently cut its global growth forecast for 2014 to 2.8% from its earlier outlook of 3.2%, the need for better stocks with stronger fundamentals has become imperative for a portfolio.
Better or high quality stocks are expected to perform well given the sluggish economic picture and a general lack of investor confidence.
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Source: NASDAQ
CBO-Effects on Economic Growth of Federal Investment and Reductions in Federal Deficits and Debt
June 20, 2014--As was mentioned in Wednesday's blog post, we think that some of the answers to follow-up questions from Congressional hearings may be of general interest
Following a hearing on the budget and economic outlook, a Member of Congress asked whether federal investment or reductions in federal deficits and debt would be better for achieving economic growth.
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Source: Congressional Budget Office (CBO)
J.P. Morgan launching its first exchange-traded fund
June 19, 2014--J.P. Morgan Chase & Co (JPM.N) is launching its first exchange-traded fund on Tuesday as the Wall Street bank's asset management business makes its debut in the $1.8 trillion U.S. exchange-traded fund arena.
The JPMorgan Diversified Return Global Equity ETF (JPGE.P) is set to start trading Tuesday on the NYSE Arca under the ticker "JPGE." The launch brings J.P. Morgan Asset Management, a long-time mutual fund provider, into a fast-growing ETF market dominated by asset managers including BlackRock Inc (BLK.N), State Street Corp (STT.N) and Vanguard Group.
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Source: Reuters
UPDATE 2-U.S.-based stock funds attract $5.3 bln over week-Lipper
June 19, 2014--Investors in U.S.-based funds committed $5.3 billion to stock funds in the week ended June 18
after adding $10 billion to the funds the prior week, data from
Thomson Reuters' Lipper service showed on Thursday.
Stock mutual funds attracted $126 million in new cash, while
stock exchange-traded funds added $5.2 billion. Stock mutual
funds are commonly purchased by retail investors, while stock
ETFs are thought to represent the institutional investor.
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Source: Reuters