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DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly Review-US ETP assets reach $1.6 trillion milestone fueled by market rally
October 22, 2013--Data in this report is as of Fri, October 18
Market and Net Cash Flows Review
Markets rallied last week on US debt deal. The US (S&P 500) edged higher by 2.42%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) rose by 2.77% and 1.88%, respectively. In the meantime, performance was positive across US sectors. Energy (+3.12%) and Financials (+2.99%) recorded the biggest gains. The DB Liquid Commodity Index rose by 0.41%; similarly, the Agriculture sector (DB Diversified Agriculture Index), Gold and Silver prices rose by 0.43%, 3.46% and 2.66%, respectively; while, the WTI Crude Oil fell by 1.19%. Moving into other asset classes, the 10Y US Treasury Yield dropped 10bps ending at 2.60%.
Meanwhile on the FX side the USD strengthened against all major currencies. The Euro, the British Pound, the Swiss Franc and the Japanese Yen depreciated 1.06%, 1.32%, 1.12% and 0.87%, respectively. Last but not least, Volatility (VIX) dropped by 17.05% during the same period.
The total US ETP flows from all products registered $14.7bn (+0.9% of AUM) of inflows during last week vs. flat flows the previous week, setting the YTD weekly flows average at +$3.3bn (+$139.8bn YTD in total cash flows).
Equity, Fixed Income and Commodity ETPs experienced flows of +$15.2bn (+1.2%), -$0.1bn (-0.0%) and -$0.5bn (-0.8%) last week vs. +$1.1bn (+0.1%), -$0.7bn (-0.3%) and -$0.7bn (-1.0%) in the previous week, respectively.
Among US sectors, Financials (+$0.8bn, +1.4%) and Information Technology (+$0.5bn, +1.9%) received the top inflows, while Utilities (-$0.3bn, -3.9%) experienced the only outflows.
Top 3 ETPs & ETNs by inflows: SPY (+$7.9bn), QQQ (+$1.4bn), XLF (+$0.6bn)
Top 3 ETPs & ETNs by outflows: BIL (-$0.6bn), DIA (-$0.5bn), IDU (-$0.4bn)
New Launch Calendar: Short term IG & HY, leveraged, currency hedged, IPOs
There were four new ETFs and one new ETN listed during the previous week. The new products offer exposure to short term US investment grade and high yield corporate debt, currency hedged exposure to Germany, leveraged US large caps and new company listings.
Turnover Review: Floor activity decreased by 6.2%
Total weekly turnover decreased by 6.2% to $328.7bn vs. $350.2bn from the previous week; However, last week's turnover level was 21.9% over last year's weekly average. Fixed Income ETPs turnover increased by $0.7bn (+4.2%); while Equity and Commodity ETPs turnover decreased by $18.9bn (-6.0%) and $2.3bn (-20.8%), respectively.
Assets under Management (AUM) Review: assets reach $1.6 trillion milestone
US ETP assets rose by $47.4bn (+3.0%) totaling $1.605 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +20.4% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved +$44.5bn, +$1.2bn and +$1.5bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
First Asset Launches US Value and US Momentum ETFs in Canadian Market Based on Morningstar Indices
Canadian investors now have a unique opportunity to access the US market with Morningstar Index powered ETFs
October 22, 2013--Building on the success of its top performing exchange traded funds(1) (ETFs) powered by Morningstar Canadian equity indices, First Asset Investment Management Inc. (First Asset, an independent Canadian investment management company, is pleased to announce the launch of two new equity ETFs replicating Morningstar U.S. equity indices, which will commence trading today on the Toronto Stock Exchange (TSX): First Asset Morningstar US Momentum Index ETF (TSX:YXM) and First Asset Morningstar US Value Index ETF (TSX:XXM).
XXM and YXM replicate indexes that apply Morningstar CPMS rules-based methodologies that are similar to those used in both First Asset Morningstar Canada Value Index ETF (TSX:FXM), which has a 28.8% 1-year return (21.3% S.I.), and First Asset Morningstar Canada Momentum Index ETF (TSX:WXM), which has a 17.9% 1 year return (15.9% S.I.)(2).
(NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION TO THE UNITED STATES OF AMERICA)
Source: First Asset
Fidelity launches cheaper line of ETFs
October 22, 2013--Fidelity Investments is set to make a splash with its first attempt at entering the exchange-traded fund market with sector ETFs that undercut rivals Vanguard Group Inc. and State Street Global Advisors on price.
Fidelity plans to launch 10 sector ETFs, covering all the major sectors, on Thursday that cost just 12 basis points each, according to a filing with the Securities and Exchange Commission. Vanguard and State Street charge 14 basis points and 18 basis points, respectively, for similar ETFs.
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Source: Investment News
Exchange Traded Concepts Delivers ROBO-STOX(TM) Global Robotics and Automation Index ETF to Market.
First of Its Kind Innovation Provides Investors with Access to the Emerging Robotics and Automation Sector
October 22, 2013--Exchange Traded Concepts, LLC ("ETC") announces the launch of the ROBO-STOX(TM) Global Robotics and Automation Index ETF (Ticker Symbol: ROBO), the latest exchange-traded fund to begin trading today through the firm's accelerated, low-cost, private-label ETF platform.
The ROBO-STOX(TM) Global Robotics and Automation Index ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the ROBO-STOX(TM) Global Robotics and Automation Index-the world's first index to benchmark the value of robotics, automation and related technologies. The Fund invests primarily in the equity securities of
Robotics and Automation Companies and seeks to help investors take advantage of the robotics trend as it continues to grow through capturing a representative portfolio of the industry.
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Source: Exchange Traded Concepts
Deutsche Bank Starts Trading System for U.S. Options
October 22, 2013--Deutsche Bank AG is introducing an electronic platform for investors to trade options on single stocks, equity indexes and exchange-traded funds across U.S. derivatives exchanges.
The system will give clients access to automated trading across all 12 American options venues, including exchanges operated by CBOE Holdings Inc., NYSE Euronext, Nasdaq OMX Group Inc. and Bats Global Markets Inc., according to a statement from Germany’s biggest bank. The system will be part of Deutsche Bank's Autobahn platform that includes tools for transactions in stocks, bonds, commodities and foreign exchange.
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Source: Bloomberg Business Week
Brazilian economy is expanding again but long-term challenges remain, ,says OECD
October 21, 2013--Brazil has moved up the ranks of the world's largest economies while making economic growth ever more inclusive. Renewed economic dynamism will allow it to continue converging with more advanced economies and ensuring that disadvantaged groups share in the benefits of future growth, according to the OECD's latest Economic Survey of Brazil.
The report, presented today in Brasília, points to areas where Brazil can build on past achievements and pave the way for stronger growth in the years to come.
view the OECD Economic Surveys: Brazil
Source: Brazil
FlexShares Launches Global Infrastructure Index ETF
New ETF to Provide Increased Diversification with Other Equity Asset Classes
October 21, 2013--FlexShares(R) Exchange Traded Funds, sponsored and managed by Northern Trust, introduced the FlexShares STOXX Global Broad Infrastructure Fund (NYSE Arca: NFRA) on October 8th.
A global equity portfolio, consisting of companies that have infrastructure ownership, the Fund operates with a goal of increasing diversification with other equity assets while also providing income to investors.
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Source: Business Wire
BTIG Expands Global Portfolio and ETF Offering
October 22, 2013--BTIG, LLC, a global financial services firm specializing in institutional trading and related brokerage services announced the expansion of its Global Portfolio
and ETF offering with the addition of six new hires:
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Source: Business Wire
ETF Research Center-Q3 2013 Earnings Reports -Week One
October 21, 2013--HIGHLIGHTS:
With 20% of S&P500 firms reporting, it looks like earnings growth was 4.3% YoY, about what it was in Q2. However, breadth was far better in Q3, with 7 out of 9 sectors reporting positive year-on-year results, led by the Tech (XLK) sector
Also like Q2, Energy (XLE) dragged down overall index revenue growth to an anemic 1.9%, but excluding the sector S&P sales growth was likely about 2.7%. The Consumer Discretionary (XLY) sector stands out as the largest contributor to index sales growth. Meanwhile, Financials (XLF) and Tech have seen significant margin improvement versus 3Q12, while margins for Utilities (XLU) have gotten squeezed..
Financials have delivered the biggest upside surprises to-date, followed by the Materials (XLB) sector, while only Tech as fallen short...
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Source: AltaVista Research
Morgan Stanley-US ETF Weekly Update
October 21, 2013--US ETF Weekly Update
Weekly Flows: $14.6 Billion Net Inflows
ETFs Have Exhibited Net Inflows of $137.9 Billion YTD
ETF Assets Stand at $1.6 Trillion, up 20% YTD
Four ETF Launches Last Week
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $14.6 bln last week amid government reopening and the raising of the debt ceiling
Last week's net inflows were led by US Large-Cap ETFs at $9.1 bln; specifically, the SPDR S&P 500 ETF (SPY) generated $7.9 bln in net inflows in this category
ETFs have exhibited net inflows 28 out of 42 weeks YTD
ETF assets stand at $1.6 tln, up 20% YTD; $137.9 bln net inflows YTD
13-week flows remain mostly positive among asset classes; combined $34.2 bln in net inflows
International - Developed ETFs generated net inflows of $18.9 bln over the last 13 weeks, the most of any category we measured; European ETFs or international equity ETFs with significant European exposure were the primary driver to the category's large net inflows
Over the last 13 weeks, Fixed Income ETFs have posted net outflows of $4.5 bln; despite Fixed Income ETF weakness, three funds in the category actually posted $1+ bln net inflows (two focused on floating-rate debt and one on short duration government/credit debt)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $7.9 bln this past week, the most of any ETF
Despite strong net inflows last week, SPY's recent flows have been volatile and directionless
Notably, the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the SPDR Barclays High Yield Bond ETF (JNK), the two largest high yield bond ETFs, generated a combined $933 mln in net inflows last week
The iShares MSCI Emerging Markets ETF (EEM) has posted net inflows of $5.0 bln over the last 13 weeks, the most of any ETF
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume was essentially flat in September relative to August at 27%
Over the past 5 years, ETFs peaked at 36% of listed trading volume in November 2008
ETFs traded $328 bln last week, down $21 bln from the prior week but still 15% above their 13-week average
Leveraged/Inverse ETFs accounted for 9% of volume last week, however, make up only 2% of ETF market cap
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 9/30/13
The SPDR Dow Jones Industrial Average ETF (DIA) had the largest increase in USD short interest at $318 mln
Shares short of the iShares MSCI Emerging Markets ETF (EEM) declined to 74.8 mln from 106.8 mln the prior period; EEM's shares short are at their lowest level since 2/28/13
600 ETFs exhibited short interest declines while 585 experienced short interest increases over the last period
Aggregate ETF USD short interest decreased by $10.5 bln over the period ended 9/30/13
The average shares short/shares outstanding for ETFs is currently 3.9% down from 4.2% last period
For the third straight period, the SPDR Retail ETF (XRT) exhibited the highest shares short as a % of shares outstanding; XRT's shares short are currently 247%, down from last period's 280%
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only five ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
$8.5 bln in total market cap of ETFs less than 1-year old
International Equity ETFs account for 50% of market capitalization of ETFs launched over the past year; specifically International - Emerging ETFs make up 32%
After a month-long lull in issuance from the end of August through the end of September, 19 ETFs have launched over the past four weeks
110 new ETF listings and 43 closures/delistings YTD
The top 10 most successful launches make up 68% of the market cap of ETFs launched over the past year
Five 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)
Over the last year, BlackRock has launched 24 ETFs and accounts for 59% of all recently launched ETF market capitalization, the most of any sponsor (in terms of both number and market capitalization)
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Source: Morgan Stanley
