Americas ETP News
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Bond Market Sell-Off Causes Stress in $2Trillion ETF industry
June 20, 2013--June 20, 2013--A wave of selling caused many exchange traded funds to tumble below the value of their underlying assets as a bond market sell-off caused stress in the $2 trillion ETF industry.
ETFs track baskets of underlying assets, such as emerging-market stocks or municipal bonds, but discounts widened sharply on Thursday as dealers struggled to keep up with the sell orders.
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Source: CNBC.com
State Street temporarily stops cash redemptions for muni-bond ETFs
June 20, 2013--A flurry of selling in municipal bond ETFs this week prompted one of the market's largest exchange-traded fund sponsors to temporarily stop redeeming shares for cash.
The move underscored how hard-pressed frantic sellers became in the heat of this week’s selloff.
State Street Global Advisors, the asset management arm of State Street Corp., told Wall Street trading desks Thursday that it would only accept so-called “in kind” redemptions for its suite of muni-bond ETFs, according to Tim Coyne, State Street’s global head of SPDR ETF capital markets. A spokeswoman said State Street resumed allowing dealers to its muni ETF shares for cash on Friday.
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Source: Wall Street Journal
BNY Mellon Announces Mobile App to Facilitate Creation of ETF Shares
June 20, 2013--New Technology Aimed at Providing Flexibility for Authorized Participants
June 20, 2013--BNY Mellon, the global leader in investment management and investment services, said today it is among the first to introduce a mobile application that enables shares of exchange-traded funds
(ETFs) to be created and redeemed on an iPad.
The app was designed to improve the efficiency of authorized participants, which are financial institutions that
play a key role in the trading of ETFs.
"As a leading provider of ETF services, BNY Mellon strives to meet the needs of all constituents in the ETF marketplace," said Joseph F. Keenan, managing director for BNY Mellon Asset Servicing and head of its global ETF services business. "This particular app was designed primarily to address the needs of the authorized participants, although it also provides information to other constituents in the ETF marketplace such as sponsors. Improving the efficiency of authorized participants can help increase the assets flowing into ETFs, which ultimately benefits the ETF sponsors, which are our clients."
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Source: BNY Mellon
Invesco PowerShares Lists Global Short Term High Yield Bond Portfolio
June 20, 2013--Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs), announced today the launch of the PowerShares Global Short Term High Yield Bond Portfolio (PGHY) on the NYSE Arca.
PGHY provides investors access to short-term US dollar-denominated, high-yield debt that is issued globally; including sovereign, quasi-government and corporate bond securities. PGHY has an expense ratio of 0.35% and is expected to issue monthly distributions.
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Source: Invesco PowerShares
An Innovative Series Trust for Actively Managed ETFs Enters the Market
June 19, 2013--Forum Investment Advisors, LLC (FIA) has launched Forum ETF Trust, a series trust designed for independent investment advisers to launch and operate adviser-branded actively managed ETFs.
Forum ETF Trust offers all the benefits of a traditional shared trust, with an important innovation. The Trust will use an investment manager–investment adviser structure rather than the typical adviser–sub adviser structure. The distinction is important because, while FIA will serve as investment manager to the Trust and has responsibility for certain compliance and oversight functions, the Trust’s advisers have sole responsibility for investment decisions.
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Source: Atlantic Fund Services
New 'High Income' ETF Targets Closed-End Funds for Yield
June 19, 2013--Investors will get a new ETF this week that seeks to provide income by investing in a basket of closed-end funds.
Exchange Traded Concepts LLC in conjunction with YieldShares LLC earlier this year filed a registration statement, including a preliminary prospectus, for the YieldShares High Income ETF (YYY). The fund is expected to list Friday, June 21.
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Source: Yahoo Finance
Federal Reserve issues FOMC statement
June 19, 2013--Information received since the Federal Open Market Committee met in May suggests that economic activity has been expanding at a moderate pace.
Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth. Partly reflecting transitory influences, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.
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Source: Federal Reserve
Federal Reserve Board and Federal Open Market Committee release economic projections from the June 18-19 FOMC meeting
June 19, 2013--The table and charts released on Wednesday summarize the economic projections and the target federal funds rate projections made by Federal Reserve Board members and Federal Reserve Bank presidents for the June 18-19 meeting of the Federal Open Market Committee
The table will be incorporated into a summary of economic projections released with the minutes of the June 18-19 meeting. Summaries of economic projections are released quarterly.
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Source: Federal Reserve
Wall Street Investors Sample Marijuana Industry
June 18, 2013--Twenty companies serving the legal marijuana industry displayed their wares on Wall Street last week in search of investment capital-possibly the first baby steps of what some view as a budding sector.
“The writing is on the wall. This is going to be the next great American industry,” said Troy Dayton, cofounder and CEO of the ArcView Group, a San Francisco-based network that seeks to match investors with marijuana-related businesses.
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Source: Private Wealth
DB-Synthetic Equity & Index Strategy-North America-US ETF Weekly Review-Prices put pressure on ETP assets, but flows receded to neutral
June 18, 2013--Market and Net Cash Flows Review
Most equity markets moved lower last week. The US (S&P 500) fell by 1.01%; while, outside the US, the MSCI EAFE (in USD) rose by 0.45% and the MSCI EM (USD) dropped by 2.63%.
Moving on to other asset classes, the 10Y US Treasury Yield dropped by 3 bps last week; while the DB Liquid Commodity Index was almost flat (-0.14%). Similarly, the Agriculture sector (DB Diversified Agriculture Index) pulled back by 1.72% and the WTI Crude Oil, Gold and Silver rose by 1.9%, 0.56% and 2%, respectively. Last but not least, Volatility (VIX) rose by 13.28% during the same period.
The total US ETP flows from all products registered $0.56bn (-0.0% of AUM) of outflows during last week vs. $9.26bn (-0.6%) of outflows the previous week, setting the YTD weekly flows average at +$3bn (+$72.43bn YTD in total cash flows).
Equity, Fixed Income, and Commodity ETPs experienced flows of +$1.37bn (0.12%), -$1.68bn (-0.63%), -$0.19bn (-0.24%) last week vs. -$3.87bn (-0.35%), -$4.8bn (-1.75%), -$0.33bn (-0.42%) in the previous week, respectively.
Among US sectors, Energy (+$0.3bn, +1.24%) and Industrials (+$0.3bn, + 4%) received the top inflows, while Financials (-$0.36bn, -0.62%) and Utilities (-$0.11bn, -1.22%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: SPY (+$3.9bn), TLT (+$0.6bn), XLE (+$0.5bn)
Top 3 ETPs & ETNs by outflows: EEM (-$2.5bn), IFG (-$0.9bn), LQD (-$0.5bn)
New Launch Calendar: commodity ETNs
There were 2 new ETNs listed during last week. Both notes focus on Commodity indices. One the notes employs a diversified approach and the other employs a rotation strategy.
Turnover Review: Floor activity decreased by 20%
Total weekly turnover decreased by 19.8% to $346.01bn vs. $431.63bn in the previous week. However, last week's turnover level was 28% over last year's weekly average.
Assets under Management (AUM) Review: assets dropped by $17bn
US ETP assets dropped by $1.27bn (-0.9%) totaling $1.456 trillion at the end of the week. As of last Friday, US ETPs have accumulated an asset growth of 9.2% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$10.1bn, -$2.1bn, -$0.4bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
