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DB-Synthetic Equity & Index Strategy-North America-US ETF Trade Alert-Adjusting your Dividend ETF positions
Understanding the risks in your Dividend ETF positions
May 6, 2013--Some dividend strategies seem crowded, expensive and too exposed to defensives. We prefer growth over yield, or a more selective approach to yield.
Dividend Yield seems crowded according to our DB Quant colleagues
Although crowded doesn’t mean that the trade is going to underperform right away, it does pose a risk in the case that a market shock pushes investors out of the trade at the same time. (See Cahan et al, 3 May 2013)
Dividend Yield ETFs are expensive and more concentrated on defensives
We believe that dividend ETFs with focus on dividend growth or payment, trading cheap, and with less exposure to defensives provide protection against a rotation away from defensives or investors exiting the yield trade all at once.
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Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
DB-Synthetic Equity & Index Strategy-North America-US ETF Model Portfolios-House View Portfolio Update
May 6, 2013--House View Update as of May 3rd, 2013
Positioning for the summer. Dividend growth, Banks, Tech, and duration boost.
Market Performance
Since the launch of our House View portfolio (HVP) on October 2, 2012, the US equity market (SPY) and the US Fixed Income market (BND) are up by 13.09% and 0.57%, respectively; while the Commodity market (DBC) has lost 8.01%.
Model Performance
Our HVP is up by 7.21% since its launch, and 3.47% higher since the last rebalancing on Mar 6, 2013. In the meantime, the equity market and our multi asset class benchmark are also up by 13.09% and 4.95% since the launch of our HVP, respectively.
Portfolio Updates and New Membership
Four new positions to equity and one to credit. Equity positions: one on dividend growth, two sector tilts, and one international. Credit position: long duration high yield. Positions funded by replacement of dividend and high yield positions, and reductions in China, US large caps, and US Divs. (Figure 2).
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Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
Direxion Appoints Patrick Rudnick As Chief Financial Officer
May 6, 2013-- Direxion, a leader in alternative investment solutions, announces that Patrick Rudnick has been appointed Chief Financial Officer of Direxion.
Mr. Rudnick was most recently a Vice President in the Fund Administration division of U.S. Bancorp Fund Services, where he oversaw the fund servicing operations including financial reporting, compliance, board reporting and expense oversight for Direxion Funds and Direxion Shares, and other clients for several years.
In his new role, Mr. Rudnick will report to Eric Falkeis, Chief Operating Officer of Rafferty, and oversee the financial, compliance, and risk oversight aspects of Direxion's business. He will also join Direxion's senior planning team.
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Source: Wall Street Journal
S&P 500 Buyback Index Launched by S&P Dow Jones Indices
May 6, 2013-- S&P Dow Jones Indices announced today the launch of the S&P 500(R) Buyback Index which is designed to measure the performance of the top 100 stocks with the highest buyback ratio in the S&P 500.
"Buybacks can be seen as an important indicator of corporate health," says
Vinit Srivastava, Senior Director of Strategy Indices at S&P Dow Jones
Indices. "Much like dividends, corporate buybacks is another method that companies use to return value back to shareholders. In 2012, S&P 500 companies bought back $399 billion worth of stock, and continue to hold record amounts of cash."
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Source: Bloomberg
U.S. Department of the Treasury Economic Statistics-Monitoring the Economy Update
May 6, 2013-- The U.S. Economic Statistics- Monthly Data has been updated and is now available.
view the U.S. Economic Statistics- Monthly Data Update
Source: US Department of the Treasury
Morgan Stanley-ETF Weekly Update
May 6, 2013--US ETF Weekly Update
Weekly Flows: $4.8 Billion Net Inflows
ETF Assets Stand at $1.5 Trillion, up 11% YTD
Three ETF Launches Last Week
Global X Announces Reverse Splits on Six ETFs
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $4.8 bln last week; 2nd consecutive week of net inflows
Last week’s net inflows were led by Fixed Income ETFs ($2.7 bln); conversely, Commodity ETFs posted the largest net outflows at $1.0 bln, extending the recent stretch of net outflows
ETF assets stand at $1.5 tln, up 11% YTD; $64.2 bln net inflows YTD
13-week flows were mostly positive among asset classes; combined $33.1 bln in net inflows
Despite talk of a “great rotation” to equity from fixed income we have yet to see it materialize in ETFs; Fixed Income ETFs have
generated net inflows of $13.9 bln over the last 13 weeks, the most of any category we measured
International - Developed Equity ETFs have posted material net inflows over the last 13 weeks ($10.6 bln); the category’s ETF
market share has risen by 2 percentage points as assets are up 54% over the past 52 weeks
US-Listed ETFs: Estimated Largest Flows by Individual ETF
The iShares Barclays 3-7 Year Treasury Bond Fund (IEI) posted net inflows of $1.5 bln, the most of any ETF
The two ETFs to generate the largest net inflows last week were long US Treasuries; IEI and the ProShares Ultra 7-10 Year
Treasury (UST) had a combined $2.5 bln in net inflows
For the 20th straight week, the WisdomTree Japan Hedged Equity Fund (DXJ) posted net inflows; over this time period, DXJ
generated net inflows of $6.1 bln
Despite showing some price stability last week, the SPDR Gold Trust (GLD) exhibited another week of net outflows; over the last 13
weeks, GLD has posted net outflows of $12.8 bln, the most of any ETF
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 4/15/13
SPDR Gold Trust (GLD) had the largest increases in USD short interest at $980 mln
GLD’s 22.9 mln shares short are 19% above their one-year average
GLD has experienced a barrage of net outflows over the past 13 weeks ($12.1 bln)
Aggregate ETF USD short interest increased by $2.7 bln over the period ended 4/15/13
The average shares short/shares outstanding for ETFs is currently 4.3%
The CurrencyShares Euro Trust (FXE) had the most shares short as a % of shares outstanding at 193% for the period ended
4/15/13; second occurrence YTD when FXE has been the most heavily shorted
Retail, currency, and financial ETFs seem to consistently make the list as the most heavily shorted ETFs
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can
exceed 100% (only seven ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
Source: Bloomberg, Morgan Stanley Wealth Management ETF Research. Data estimated as of 5/3/13 based on daily change in share counts and daily NAVs.
$6.2 bln in total market cap of ETFs less than 1-year old
Newly launched International- Emerging Equity ETFs accounted for 24% of the market cap of ETFs launched over the past
year, the most of any category, including $802 mln in net inflows over the last 13 weeks
Issuance has been light in 2013 relative to the past three years; 42 new ETF listings and 27 closures/delistings YTD
The top 10 most successful launches make up 66% of the market cap of ETFs launched over the past year
Seven different ETF sponsors and two asset classes represented in top 10 most successful launches
Eight out of the 10 most successful launches over the past year have an income orientation
PowerShares S&P 500 High Dividend Portfolio (SPHD) cracked the top 10 most successful launches over the past year with a
$125 mln market cap; SPHD owns 50 large-cap stocks that have historically provided high dividend yields and low volatility
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Source: Morgan Stanley
Growth surge lures pioneers from ETFs' first wave
May 6, 2013--Two veterans of the rough and tumble effort to build exchange traded fund ventures have decided the time is right to make their return to developing products.
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Source: FT.com
NASDAQ OMX and World Steel Exchange Marketing Announce Strategic Partnership
May 6, 2013--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), and World Steel Exchange Marketing, LLC (WSEM), founded by World Steel Dynamics (WSD) in 2009, today announced a strategic partnership to develop financially settled steel and steel scrap futures products to be traded on the NASDAQ OMX Futures Exchange, Inc. (NFX).
This strategic partnership will help the steel industry better manage steel price risk, with a world-class trading platform and a complement of steel futures products. The products are expected to launch in the fourth quarter of 2013 following filing with the Commodity Futures Trading Commission.
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Source: NASDAQ OMX
ISE Weekly Listings
May 3, 2013--The International Securities Exchange listed new options classes during the week beginning April 29, 2013 as described below.
Effective Thursday, May 2, 2013, the ISE will list options on the following product(s) along with their related symbol(s):
Bin 7-Timber Hill LLC Equity
CST Brands Inc. (Symbol: CST, Trading Symbol(s): CST) will trade on a March expiration cycle with exercise and position limits of 25000.
Source: International Securities Exchange (ISE)
Companies Add to Lineups of 'Free' ETFs
Still, trading commissions are only one cost, so other funds may be more attractive on balance
May 3, 2013--How attractive is "free"? Some of the largest online brokers of exchange-traded funds are determined to find out.
Two have recently expanded the lineups of ETFs they offer without trading commissions, bringing their menus closer to the size of their competitors'.
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Source: Wall Street Journal
