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SPDR(R) University 2014 ETF & Investment Outlook-Let's Get this Show on the Road
January 2, 2014--Driven by declines in economic policy uncertainty stabilization in European economic growth and continued
accommodative monetary policy, 2013 delivered double-digit returns for equity markets around the globe. In
fact, global equities are up 21% through the end of November.1
Flows into ETFs highlighted investors' comfort with taking on risk with equity ETFs pulling in close to $207 billion in net flows. The global bond market, on the other hand, fell 2% as interest rates rose.2 Even so, fixed income ETFs added $26 billion of inflows year-to-date. Looking ahead to 2014, investors are left wondering have we come too far too soon.
2013 ETF TRENDS
In aggregate, the ETF market took in an extremely healthy
$196.4 billion globally. As noted, investors added a sizable
amount of capital to equities, but were not sellers of fixed
income. However, the pace of fixed income ETF growth in
2013 was much less than through the first eleven months of
2012. Alternatives added new money as well, while currency
products experienced modest outflows. With commodities
decoupling from other risky assets, investors aggressively
reduced exposure to the tune of $39.0 billion with $37.7
billion of outflows from gold ETFs alone. Regionally, investors
sold ETFs with exposure to emerging markets and blended
economic development, while concentrating their interest in
developed market ETFs.
visit www.statestreetspdrs.com/ to view more
Source: SSgA
SEC Eliminates Ratings On Capital Rules in Nod to MF Global Collapse
January 2, 2014--The Securities and Exchange Commission said last Friday it would adopt amendments to remove references to credit ratings in calculating the regulatory capital financial firms need to put behind commercial paper, debt and preferred stock, pushing forward one of the major tenets of the 2010 Dodd Frank Wall Street Reform and Consumer Protection Act.
The change appears targeted at mitigating some of the risks uncovered in the collapse of commodity trading firm MF Global in October 2011.
The amendments will remove references to credit ratings in the broker-dealer financial responsibility and confirmations of transactions rules. New regulations will also prohibit broker-dealers from using customer securities and cash to finance their own trading, and will force them to maintain more than a dollar of highly liquid assets for each dollar of liabilities.
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Source: The Street
A Stock Exchange Expands Its Global Reach
January 1, 2014--The face of the global stock market used to be the classically proportioned exchange building on Wall Street.
In the future, it may well be a squat suburban office building in Lenexa, Kan., outside Kansas City, where BATS Global Markets is based.
While the New York Stock Exchange has recently been swallowed up by the InterContinental Exchange, a company that gets most of its revenue from trading derivatives, BATS, which was founded in 2005, has been doubling down on plain-vanilla stock trading and global expansion. That steady business has quietly moved it closer to the top of the list of the largest stock exchange operators in the world in terms of the value of shares traded.
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Source: NY Times
S&P Dow Jones Indices' Market Attributes-Index Dashboard-Latin America
December 31, 2013--This month's highlights include:
2013 ended on a down note for Latin American equities. Decreasing external demand and declining commodity prices have contributed to the pressure on the region's growth.
The S&P MILA 40 and S&P Latin America 40 declined again in December, creating a total loss of 21% and 12%, respectively, for 2013. Mexico was the single country among the S&P Latin America BMI to register a gain for the year (2%). Among sectors, technology was the lone exception with a positive return (9%).
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Source: S&P Dow Jones Indices LLC
S&P Dow Jones Indices' Market Attributes-Index Dashboard-Canada
December 31, 2013--This month's highlights include:
The S&P/TSX Composite and S&P/TSX 60 added another 2% in December. Overall, Canadian equities gained 13% in 2013 with most of those gains posted in the fourth quarter.
Similar to the U.S., health care, consumer discretionary and industrials were the best performing sectors in 2013. Utilities, and most importantly materials, lagged, declining 4% and 29%, respectively.
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Source: S&P Dow Jones Indices LLC
S&P Dow Jones Indices' Market Attributes-Index Dashboard-US
December 31, 2013--This month's highlights include:
The U.S. equity market finished 2013 with another gain of more than 2% in December. During the year both the Dow Jones Industrial Average and S&P 500 broke records, old and new, concluding 2013 with an approximate 30% gain.
Smaller cap companies fared even better in 2013. Both the S&P MidCap 400 and S&P SmallCap 600 outperformed the S&P 500 (by 9 percentage points in the case of the latter).
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Source: S&P Dow Jones Indices LLC,
Markets Finish 2013 With Record Highs
December 31, 2013--Fittingly, a record-breaking 2013 finished with one last record-breaking day: on the last day of the year, the Dow and the S&P 500 finished with their largest gains in over a decade, while stocks like Netflix NFLX +0.11% finished 2013 with triple-digit year-to-date gains.
The great bull market of 2013 lived up to its name on New Year’s Eve, with the Dow, Nasdaq and S&P 500 closing in the green across the board. The Dow closed at a record-high 16,576.66, for a 72-point or 0.44% daily gain.
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Source: Forbes
U.S. Department of the Treasury Economic Statistics-Monitoring the Economy Update
December 31, 2013--The U.S. Department of the Treasury Economic Statistics-Monitoring the Economy report has been updated.
view the U.S. ECONOMIC STATISTICS-MONTHLY DATA
view the U.S. ECONOMIC STATISTICS-QUARTERLY DATA
Source: US Department of the Treasury
Fed getting it wrong tops list of investor concerns
December 30, 2013--Bears had a tough 2013. Too much went disappointingly right. Equities rose globally. The eurozone failed to fall back into crisis. Squalls in emerging markets faded.
After initial missteps, the US Federal Reserve calmed investors' worries about its plans to scale back, or taper, its asset purchases.
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Source: FT.com
Morgan Stanley-US ETF Weekly Update
December 30, 2013--US ETF Weekly Update
Weekly Flows: $8.6 Billion Net Inflows
$182.9 Billion Net Inflows YTD
ETF Assets Stand at $1.7 Trillion, up 25% YTD
No ETF Launches Last Week
Two Guggenheim BulletShares ETFs Set to Mature
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows for the third consecutive week ($8.6 bln last week)
Last week's net inflows were led by US Large-Cap ETFs at $11.8 bln; conversely, US Mid-Cap ETFs exhibited net outflows of $2.6 bln, the most of any category we measured
Eight of the 15 categories we measured posted net inflows last week
ETFs have exhibited net inflows 36 out of 52 weeks in 2013
ETF assets stand at $1.7 tln, up 25% YTD; $182.9 bln net inflows YTD
13-week flows remain mostly positive among asset classes; combined $58.7 bln in net inflows
International-Developed ETFs have exhibited some of the strongest net inflows in 2013; specifically, over the last 13 weeks, International- Developed ETFs have generated net inflows of $23.0 bln, lagging only the $29.2 bln into US Large-Cap ETFs
Commodity ETFs continue to struggle as performance has lagged and interest remains limited; over the last 13 weeks, Commodity ETFs have posted net outflows of $7.0 bln, the most of any category
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $6.6 bln this past week, the most of any ETF
Despite volatile weekly flows in 2013, SPY has actually generated net inflows of $15.2 bln YTD; notably, SPY typically posts strong fourth quarter inflows
Eight of the 10 ETFs to generate the largest net inflows last week were US equity-based with S&P 500 Index-based products posting a combined $9.4 bln in net inflows
Large Vanguard net outflows last week coincide with the prior week's big net inflows, which were likely attributed to quarterly rebalancing; last week's net outflows are very similar to the prior week's net inflows
Over the last 13 weeks, the Vanguard FTSE Emerging Markets ETF (VWO) has exhibited net outflows of $4.5 bln, the most of any ETF
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume dropped to 24% in November (had been essentially flat the prior four months)
ETF monthly $ volume as a % of listed trading volume is at its lowest level since May 2008
Amid the short week, ETF $ volume plummeted to $158 bln last week, down $210 bln from the prior week
Fixed Income ETFs accounted for 7.3% of ETF $ volume last week, up from its 5.5% average over the last 13 weeks
US-Listed ETFs: Short Interest Data Updated: Based on data as of 12/13/13
The iShares Core S&P 500 ETF (IVV) had the largest increase in USD short interest at $708 mln
IVV's shares short at 7.7 mln are at their highest level since 5/30/08; notably, IVV and the S&P 500 Index continue to make new highs
652 ETFs exhibited short interest increases while 567 experienced short interest declines over the last period
Aggregate ETF USD short interest increased by $2.6 bln over the period ended 12/13/13
The average shares short/shares outstanding for ETFs is currently 4.3%, up from 4.1% last period
Five of the 10 most heavily shorted ETFs as a % of shares outstanding are commodity/currency related
The CurrencyShares Euro Trust (FXE) is the most heavily shorted ETF with shares short as a % of shares outstanding of 250%
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only nine ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
$6.7 bln in total market cap of ETFs less than 1-year old
Active and Fixed Income ETFs each account for 24% of the market capitalization of ETFs launched over the past year, the most of any categories
143 new ETF listings and 48 closures/delistings YTD (additional two closures announced) compare to 2012's 155 ETF listings and 82 closures
2013's ETF listings are the fewest since 2009 when 125 ETFs were launched
The top 10 most successful launches make up 50% of the market cap of ETFs launched over the past year
Seven ETF sponsors and two asset classes represented in top 10 most successful launches; we note that the representation of funds with an income orientation is currently five (down from seven at the end of the second quarter)
For the second consecutive week, the Vident International Equity Fund (VIDI) posted the largest net inflows of any recently launched ETF; over the last two weeks, VIDI has generated net inflows of $144 mln; VIDI owns international equities in countries that exhibit favorable conditions for growth
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Source: Morgan Stanley
