Americas ETP News
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The Federal Budget: The Deficit is Down But the Fundamental Challenge Remains
September 12, 2013--Presentation to the Macroeconomic Advisers' Washington Policy Seminar
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Source: Congressional Budget Office (CBO)
Money market reform could hike muni borrowing costs-Fidelity
September 11, 2013--Fidelity Investments, the largest provider of U.S. money market funds, told Securities and Exchange Commission officials that proposed industry reform could increase the borrowing costs of U.S. municipalities by up to $13 billion, according to an SEC memo.
During an Aug. 16 meeting with the SEC's Division of Economic and Risk Analysis, Fidelity officials said U.S. municipal financing costs could increase anywhere from $1 billion to $13 billion, depending on the amount of money market-related funding that is refinanced with more expensive debt.
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Source: Reuters
Goldman Sachs, Visa & Nike Set to Join the Dow Jones Industrial Average
September 10, 2013--The Goldman Sachs Group Inc. (NYSE:GS) will replace Bank of America Corp. (NYSE:BAC), Visa Inc, (NYSE:V) will replace Hewlett-Packard Co. (NYSE:HPQ), and Nike Inc. (NYSE:NKE) will replace Alcoa Inc.
(NYSE:AA) in the Dow Jones Industrial Average (DJIA) after the close of trading on Friday, September 20. The changes will be effective with the opening of trading on Monday, September 23. The index changes were prompted by the low stock price of the three companies slated for removal and the Index Committee's desire to diversify the sector and industry group representation of the Index.
The Goldman Sachs Group, headquartered in New York, NY, provides investment banking, securities, and investment management services, as well as financial services to corporations, financial institutions, governments, and high-net-worth individuals worldwide.
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Source: Wall Street Journal
CLS Investments & iShares(R) ETF Research Helps Advisors Navigate the ETF Strategist Marketplace
September 10, 2013--In partnership with iShares ETFs, CLS Investments, LLC (CLS), a leading third party money manager and ETF Strategist, has released the second white paper within its AdvisorIQ education series.
The report, "Propel Your Business Forward: The Inside Track to Choosing and Implementing ETF Strategists," aims to help advisors understand how they may be able to better navigate the fast-growing ETF marketplace by outsourcing portions of their portfolio management to ETF Strategists.
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S0urce: CLS Investmentd
ISDA Dodd-Frank March 2013 Protocol (DFP2) To EMIR Top Up Agreement
September 10, 2013--ISDA today published the DFP2 to EMIR Top Up Agreement.
This document seeks to allow for EMIR-compliant documentation for parties that have adhered to the Dodd-Frank March Protocol ("DFP2") and do not wish to adhere to the ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol ("EMIR Protocol") in addition to this.
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Source: ISDA
BNY Mellon ADR Index Monthly Performance-August 2013e
September 10, 2013--The BNY Mellon ADR Index Monthly Performance-August 2013 Update has been published and is now available for review.
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Source: BNY Mellon
Morgan Stanley-US ETF Weekly Update
September 10, 2013--US ETF Weekly Update
Weekly Flows: $2.8 Billion Net Outflows
Fourth Consecutive Week of Net Outflows
ETF Assets Stand at $1.5 Trillion, up 11% YTD
No ETF Launches Last Week
Emerging Global Advisors Announces Fund Closures
US-Listed ETFs: Estimated Flows by Market Segment
ETFs exhibited net outflows of $2.8 bln last week, the fourth consecutive week of net outflows
For the fourth straight week, net outflows were driven by US Large-Cap ETFs; the SPDR S&P 500 ETF (SPY) accounted for 74% of the net outflows in the category
Nine of the 15 categories we measure posted net outflows last week
ETF assets stand at $1.5 tln, up 11% YTD; $88.3 bln net inflows YTD
13-week flows remain mostly positive among asset classes; combined $17.0 bln in net inflows
International-Developed ETFs generated net inflows of $10.2 bln over the last 13 weeks, the most of any category we measured
Over the last 13 weeks, Fixed Income ETFs have exhibited net outflows of $4.4 bln; however, this past week, Fixed Income ETFs posted net inflows of $2.1 bln, the most of any category we measured and the first net inflows in six weeks
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares 3-7 Year Treasury Bond ETF (IEI) posted net inflows of $2.4 bln this past week, the most of any ETF
Fixed Income ETFs accounted for five of the 10 ETFs (includes a leveraged fixed income product) to post the largest net inflows last week, totaling $3.6 bln
The SPDR S&P 500 ETF (SPY) has posted net outflows for four consecutive weeks, totaling $17.3 bln; notably, SPY’s shares outstanding stabilized during the latter half of last week, potentially signaling a turnaround in flows
The two largest emerging markets ETFs, the Vanguard FTSE Emerging Markets ETF (VWO) and iShares MSCI Emerging Markets ETF (EEM), continue to struggle; VWO and EEM have exhibited a combined $4.8 bln in net outflows over the last 13 weeks
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume increased to 27% of listed trading volume in August (up from 26% in July)
Over the past 5 years, ETFs peaked at 36% of listed trading volume in November 2008
Amid the holiday shortened week, ETFs traded $237 bln, 18% below their 13-week average
US Large-Cap ETFs accounted for 40% of volume last week, however, make up only 24% of ETF market cap
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 8/15/13
iShares MSCI EAFE ETF (EFA) had the largest increase in USD short interest at $897 mln
EFA’s shares short are at their highest level since 12/15/11 and 38% above their one-year average
Shares short for the iShares China Large-Cap ETF (FXI) are at their lowest level since 5/31/13 and slightly below their one-year average; over the last year, FXI has dramatically underperformed the S&P 500 Index from a total return standpoint
Aggregate ETF USD short interest decreased by $2.9 bln over the period ended 8/15/13
The average shares short/shares outstanding for ETFs is currently 4.1%
For the seventh consecutive period, the CurrencyShares Euro Trust (FXE) exhibited the highest shares short as a % of shares outstanding
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
$8.5 bln in total market cap of ETFs less than 1-year old
International Equity ETFs account for 46% of market capitalization of ETFs launched over the past year, but make up only 36% of net inflows over the last 13 weeks of recently launched ETFs
Newly launched Fixed Income ETFs generated net inflows of $759 mln the past 13 weeks, the most of category
91 new ETF listings and 31 closures/delistings YTD (12 additional closures announced)
The top 10 most successful launches make up 68% of the market cap of ETFs launched over the past year
Four 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
The iShares MSCI USA Momentum Factor ETF (MTUM) cracked the top 10 most successful launches over the past year; MTUM seeks to provide exposure to US large- and mid-cap stocks with positive price momentum
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Source: Morgan Stanley
Morgan Stanley-Quarterly Report: $1.5 Trillion in 1, 300 ETFs
September 9, 2013--Net inflows into US-listed ETFs were $17.0 billion during the
second quarter of 2013, the lowest net flows since the first quarter of 2010. For the first half of 2013,
ETFs generated net inflows of $68.6 billion, with ETFs tracking international developed market indices capturing 33% of net new money. There are currently $1.5 trillion in ETF assets spread among 1,300 products.
Despite ETF growth and flows, the market remains concentrated with three providers and 20 ETFs accounting for 81% and 43% of industry assets, respectively.
ETFs provide access to favored market segments. Morgan Stanley & Co.'s global economics team anticipates Fed tapering to commence in September and the Fed to end net purchases in June 2014. We believe uncertainty around Fed tapering and geopolitics will result in continued global market volatility. We list favored areas in the report and ways to implement these ideas via ETFs.
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Source: Morgan Stanley
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly-Equity markets push US ETP assets up by 1.0% amid outflows of $2.8bn
September 9, 2013--Data in this report is as of Fri, Sep 06
Market and Net Cash Flows Review
Global Equity markets moved higher during last week. The US (S&P 500) edged higher by 1.36%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) rose by 2.81% and 2.94%, respectively. In the meantime, performance was mostly positive across US sectors; Healthcare (+1.90%) and Financials (+1.80%) recorded the biggest gains; meanwhile, the DB Liquid Commodity Index rose by 0.39%.
Similarly, the Agriculture sector (DB Diversified Agriculture Index), the WTI Crude Oil and Silver prices rose by 0.94%, 2.68% and 1.43%, respectively; while Gold prices fell by 0.23%. Moving into other asset classes, the 10Y US Treasury Yield rose 16bps ending at 2.94%. Last but not least, Volatility (VIX) dropped by 6.82% during the same period.
The total US ETP flows from all products registered $2.8bn (-0.2% of AUM) of outflows during last week vs. $5.8bn (-0.4%) of outflows the previous week, setting the YTD weekly flows average at +$2.5bn (+$90.2bn YTD in total cash flows).
Equity, Fixed Income and Commodity ETPs experienced flows of -$5.9bn (-0.5%), +$2.9bn (+1.2%) and +$0.2bn (+0.2%) last week vs. -$5.6bn (-0.5%), -$0.2bn (-0.1%) and +$0.1bn (+0.1%) in the previous week, respectively.
Among US sectors, Energy (+$0.4bn, +1.4%) and Consumer Discretionary (+$0.2bn, +2.0%) received the top inflows, while Financials (-$0.5bn, -0.8%) and Consumer Staples (-$0.3bn, -3.3%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: IEI (+$2.4bn), UST (+$0.7bn), EZU (+$0.4bn)
Top 3 ETPs & ETNs by outflows: IJH (-$1.9bn), SPY (-$1.8bn), MVV (-$1.1bn)
New Launch Calendar: Leveraged exposure to Europe
There was one new ETN listed during the previous week on the NYSE Arca. The new product (FIEU) launched by Credit Suisse offers leveraged (2x) exposure to European companies
Turnover Review: Floor activity decreased by 18.2%
Total weekly turnover decreased by 18.2% to $237.0bn vs. $289.8bn from the previous week. Furthermore, last week's turnover level was 12.1% below last year's weekly average. Fixed Income ETPs turnover increased by $4.6bn (+26.7%); while Equity and Commodity ETPs turnover decreased by $53.1bn (-20.7%) and $3.7bn (-28.9%), respectively.
Assets under Management (AUM) Review: assets increased by 1.0%
US ETP assets rose by $15.4bn (+1.0%) totaling $1.482 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +11.2% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved +$14.2bn, +$1.4bn and -$0.3bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
CFTC Announces that the Third Phase of Mandatory Clearing of Certain Credit Default Swaps and Interest Rate Swaps Begins Today
September 9, 2013--The Commodity Futures Trading Commission's (Commission) Division of Clearing and Risk (Division) reminds all swaps market participants that the third phase of required clearing for certain credit default swaps (CDS) and interest rate swaps begins today.
Accounts managed by third-party investment managers, ERISA pension plans, and entities that were not subject to the Commission’s first two implementation deadlines are required to begin clearing CDS and interest rate swaps that are executed on or after September 9, 2013.
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Source: CFTC.gov
