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Morningstar Publishes Research Report about Tracking Efficiency in Chinese Equity Exchange-Traded Funds
May 29, 2014--Morningstar Asia Limited, a subsidiary of independent investment research firm Morningstar, Inc. (NASDAQ: MORN), has published a new research report, "On the Right Track: Measuring Tracking Efficiency in Chinese Equity ETFs," which examines the factors that influence the tracking efficiency of Chinese equity exchange-traded funds (ETFs).
The report is an extension of Morningstar's February 2013 research paper about measuring tracking efficiency in European ETFs.
Authored by Morningstar's global passive strategies research team, the report examines 33 ETFs listed in markets around the world that track the five major Chinese equity indices.
Morningstar analysts used two metrics to evaluate the tracking efficiency of these funds:
Tracking error: the measure of volatility of a fund's return in relation to its benchmark; and
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Source: Morningstar
Horizons ETFs and Fiduciaria Bogota S.A. launch an ETF that tracks S&P Colombia Select Index
May 29, 2014--Horizons ETFs Management (LATAM) LLC ("Horizons LatAm"), a member of the Horizons ETFs Group, is pleased to announce the launch of its second Latin American exchange traded fund ("ETF"), the Fondo Bursátil Horizons Colombia Select de S&P (the "Horizons Colombia Select ETF"), which provides investors with exposure to the S&P Colombia Select Index (the "Index").
The Horizons Colombia Select ETF begins trading today on the Bolsa de Valores de Colombia ("BVC") under the ticker symbol HCOLSEL
The Horizons Colombia Select ETF will seek to replicate the returns of the Index. S&P Dow Jones Indices LLC ("S&P") designed the Index to provide exposure to the largest and most liquid domestic stock issuers in Colombia. S&P's selection universe for the Index is based on all the securities in the S&P Colombia BMI that trade on the BVC
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Source: MarketWatch
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly Review-ETP assets higher by 5.0% YTD
May 28, 2014--Data in this report is as of Friday, May 23
Market and Net Cash Flows Review
The US (S&P 500) edged higher by 1.21%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) rose by 0.38% and 1.12%, respectively. In the meantime, performance was mostly positive across US sectors; the Consumer Discretionary (+2.06%) and the Technology (+1.81%) sectors recorded the largest weekly gains; meanwhile, the Utilities (-0.91%) and the Consumer Staples (-0.03%) sectors recorded the only decreases.
The DB Liquid Commodity Index rose by 0.66%; in the meantime, the Agriculture sector (DB Diversified Agriculture Index) and Gold fell by 0.64% and 0.07%, respectively; while, the WTI Crude Oil and Silver prices rose by 2.28% and 0.47%, respectively. Moving into other asset classes, the 10Y US Treasury Yield rose by 2bps ending at 2.54%. Last but not least, Volatility (VIX) dropped by 8.68% during the same period.
The total US ETP flows from all products registered $5.2bn (+0.3% of AUM) of inflows during last week vs. $6.5bn (+0.4%) of inflows the previous week, setting the YTD weekly flows average at +$1.9bn (+$40.3bn YTD in total cash flows).
Equity, Fixed Income and Commodity ETPs experienced flows of -$0.9bn (-0.1%), +$6.3bn (+2.2%) and -$0.3bn (-0.5%) last week vs. +$5.6bn (+0.4%), +$0.8bn (+0.3%) and -$35mn (-0.1%) in the previous week, respectively.
Among US sectors, Financials (+$0.7bn, +1.0%) and Energy (+$0.4bn, +1.1%) received the top inflows, while Utilities (-$0.4bn, -4.0%) and Consumer Staples (-$0.1bn, -1.2%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: IEF (+$3.3bn), UST (+$1.3bn), QQQ (+$1.0bn)
Top 3 ETPs & ETNs by outflows: IVV (-$1.7bn), IWM (-$1.5bn), SSO (-$0.9bn)
New Launch Calendar: First RQFII ETF to access small-cap China A-share
There was one new ETF listed during last week. The new product listed by Deutsche AWM on the NYSE Arca is the first ETF to offer investors direct access to small-cap China A-share equities.
Turnover Review: Floor activity decreased by 16.5%
Total weekly turnover decreased by 16.5% to $245.5bn vs. $294.1bn from the previous week. Furthermore, last week's turnover level was 14.2% below last year's weekly average. Fixed Income ETPs turnover increased by $3.6bn (+22.9%); meanwhile, Equity and Commodity ETPs turnover decreased by $51.7bn (-19.1%) and $0.1bn (-2.7%), respectively.
Assets under Management (AUM) Review: Assets increased by $20.5bn
US ETP assets rose by $20.5bn (+1.2%) totaling $1.761 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +5.0% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved +$14.2bn, +$6.3bn and -$0.2bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
MarketAxess and BlackRock Partner to Provide iShares Fixed Income Exchange Traded Fund (ETF) Information and Electronic Basket Trading Technology for ETF Market Makers
May 28, 2014--MarketAxess Holdings Inc. (Nasdaq:MKTX), the operator of a leading electronic trading platform for fixed income securities and provider of market data and post-trade services for the global fixed-income markets, and BlackRock (NYSE:BLK) today announced the launch of iShares fixed income exchange traded fund (ETF) information and basket trading technology on MarketAxess.
The consolidated iShares content on the MarketAxess trading system now enables ETF market makers to efficiently trade baskets of iShares ETF constituent bonds using MarketAxess' patented list trading functionality.
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Source: Wall Street Journal
Miracle Mile Advisors Partners with TD Ameritrade in ETF-Based 401k Program
May 28, 2014--Miracle Mile Advisors, one of California's fastest-growing independent investment advisory firms, has partnered with TD Ameritrade to launch a modern 401k platform delivering highly customized investment options using a universe of low-cost ETFs.
This corporate retirement offering provides access to over 800 ETFs covering a variety of asset classes from some of the most trusted firms in the industry. The all-in annual fees of the plan are projected to be slightly less than 1%; compared to many traditional 401k plans that charge over 2.5%.
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Source: Miracle Mile Advisors
Leverage Addicts Get Junk-Loan Fix With Derivatives ETF
May 27, 2014--Forget complicated total-return swaps and collateralized loan obligations. A proposed exchange-traded fund will make it much easier for anyone to use borrowed money to double down on junk-rated loans.
The AdvisorShares Pacific Asset Enhanced Floating Rate ETF will use derivatives to boost gains on high-yield loans, allowing retirees and pensioners to magnify bets on debt that promises higher yields when interest rates rise, according to a U.S. regulatory filing.
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Source: Bloomberg
Morgan Stanley US ETF Weekly Update
May 27, 2014--US ETF Weekly Update-Weekly Flows: $5.2 Billion Net Inflows
ETFs Have Generated Net Inflows 14 of 21 Weeks YTD
ETF Assets Stand at $1.8 Trillion, Up 5% YTD
US Small-& Micro-Cap ETFs Accounted for 13% of ETF $ Volume Last Week
One ETF Launch Last Week
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $5.2 bln last week, the second consecutive week of net inflows
Last week's net inflows were led by Fixed Income ETFs at $4.9 bln; conversely, US Small- & Micro-Cap ETFs posted net outflows of $1.6 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 14 of the 21 weeks YTD
ETF assets stand at $1.8 tln, up 5% YTD
13-week flows remain positive among asset classes; combined $42.4 bln in net inflows
Fixed Income ETFs generated $9.4 bln in net inflows over the last 13 weeks, the most of any category we measured and slightly edging out International - Developed ETFs; interestingly, Fixed Income ETF market share has declined to 15% from 17% over the past year
Over the last 13 weeks, US Small- & Micro-Cap ETFs exhibited net outflows of $1.5 bln, the most of any category; 13-week flows mirror last week's net outflows in the category
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares 7-10 Year Treasury Bond ETF (IEF) posted net inflows of $3.4 bln this past week, the most of any ETF
IEF's weekly flows accounted for 34% of its current market cap and its 13-week flows made up 56% of its current market cap as fixed income receives a bid amid a rally in long-term interest rates over the last 13 weeks
Along the interest rate theme, the ProShares Ultra 7-10 Year Treasury (UST) also had a big week, posting net inflows of $1.3 bln; notably, the yield on the 10 year US Treasury was essentially flat last week
The PowerShares QQQ (QQQ) generated net inflows of $991 mln last week as some of the bloodletting over the last 13 weeks eased; QQQ has exhibited net outflows 10 of the last 13 weeks as we've experienced a rotation out of growth and momentum stocks and into more value oriented names
Eight of the 10 ETFs to post the largest net outflows last week were US equity based
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume decreased in April to 25%, down from 27% 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 declined to $253 bln last week from $304 bln the prior week and is 24% below its 13-week average
US Small- & Micro-Cap ETFs accounted for 13% of ETF $ volume last week compared to their 13-week average of 10% and their market share of only 5%
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 4/30/14
iShares Russell 2000 ETF (IWM) had the largest increase in USD short interest at $2.3 bln
IWM's shares short are at their highest level (156 mln shares) since 1/31/13; notably, IWM is up nearly 25% since 1/31/13 on a total return basis
617 ETFs exhibited short interest increases while 656 experienced short interest declines over the last period
Aggregate ETF USD short interest declined by $358 mln over the period ended 4/30/14
The average shares short/shares outstanding for ETFs is currently 4.5%, flat from last period
The SPDR Retail ETF (XRT) is the most heavily shorted ETF as measured by shares short/shares outstanding at 362%
Six of the 10 most heavily shorted ETFs as a % of shares outstanding are industry based (XRT, XOP, IYR, XBI, SMH, RTH)
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 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
$8.6 bln in total market cap of ETFs less than 1-year old
Over the last year, 169 ETFs have been brought to market, of which more than 50% were in the Fixed Income and International Equity ETF categories
71 new ETF listings and 19 closures YTD
The top 10 most successful launches make up 47% of the market cap of ETFs launched over the past year
Seven ETF sponsors and two asset classes (equities and fixed income) represented in top 10 most successful launches
Out of the 10 most successful launches, five of them are income focused
Despite not cracking the top 10 most successful launches, the Merk Gold Trust (OUNZ) had net inflows of $42 mln last week, the most of any recently launched ETF; OUNZ owns gold bullion and provides smaller investors the opportunity to take delivery of physical gold in exchange for shares
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Source: Morgan Stanley
ShareOwner Investments Launches Canada's First Automated ETF Portfolio Service for Retail Investors
May 27, 2014--Canadian ShareOwner Investments Inc. ("ShareOwner") is pleased to announce the launch of its Model Portfolio Service which helps retail investors build and manage a globally diversified portfolio of ETFs. ShareOwner's Model Portfolio Service provides investors with a systematic approach to managing their investment portfolio that saves time and money by combining low cost index ETFs with optimal asset allocation and automated trade execution and portfolio rebalancing.
ShareOwner's Model Portfolios can provide investors with significant savings over traditional managed mutual funds and advisor-based solutions."Not all investors want to pay the higher fees or have a large enough portfolio to use an expensive financial advisor or broker, but want the benefits of a well-diversified, and continually balanced portfolio," said Bruce Seago, CEO of ShareOwner, "and with most managed solutions costing investors more than 2% per year, a savings of more than 1% per year can add significant value to an investor's portfolio value over time."
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Source: Canadian ShareOwner Investments Inc.
NYSE Arca-4 ETF Launch: iShares
May 27, 2014--Summary:NYSE Euronext is pleased to announce that on Thursday, May 29, 2014, the following ETFs will be listed on NYSE Arca and will begin trading as new issues:
Security Name: iShares Interest Rate Hedged Corporate Bond ETF
Short Name: iShares IR Hdg LQD
CUSIP: 46431W 70 5
Trading Symbol: LQDH
Security Name: iShares Interest Rate Hedged High Yield Bond ETF
Short Name: iShares IR Hdg HYG
CUSIP: 46431W 60 6
Trading Symbol: HYGH
Security Name: iSharesBond(R) Dec 2018 Corporate Term ETF
Short Name: iBond Dec 2018 Corp
CUSIP: 46434V AA 8
Trading Symbol: IBDH
Security Name: iSharesBond(R) Dec 2016 Corporate Term ETF
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Source: NYSE Arca
WisdomTree Announces 10 Exchange-Traded Funds (ETFs) Now Have $1 Billion in Assets
WisdomTree India Earnings Fund (EPI) Marks Tenth ETF With $1 Billion
May 27, 2014--WisdomTree Investments, Inc.,an exchange-traded product("ETP") sponsor and asset manager with approximately $34 billion in assets under management (AUM), today announced that with the addition of the WisdomTree India Earnings Fund (EPI)
ten WisdomTree ETFs now have more than $1 billion in AUM. The ETFs are as follows:
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Source: WisdomTree
