Americas ETP News
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UBS to Hang Up ETNs for (Among Other Things) Internet Stocks and Solid State Drives
May 31, 2013--Surprise! Sometimes exchange-traded funds and notes go out of business. Industry officials tend to paint the pruning of unsuccessful and asset-starved ETFs as a healthy process.
But it’s also an aggravation. Investors unlucky enough to own them have to pay unexpected trading costs. Bid-ask spreads tend to widen out. Then you’ll need to pay again to redeploy the money elsewhere.
Fortunately, the seven exchange-traded notes from UBS AG (UBS) whose end the New York Stock Exchange just announced aren’t very widely owned.
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Source: Barron's
CME Group Volume Reaches All-Time High On May 29
Record Highs In Globex Volume And Interest Rate Complex
May 30, 2013--CME Group reached a record high in single-day volume with 26,947,300 contracts traded across all asset classes on May 29, 2013, surpassing the previous record of 25,734,651 contracts on August 9, 2011.
CME Group also confirmed records in daily trading volume for the following:
Globex electronic volume reached 23,537,737 surpassing the previous record of 22,887,758 set on August 9, 2011
Interest Rate futures and options combined reached 19,417,635 surpassing the previous record of 17,164,758 set on February 27, 2007 .
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Source: CME Group
ISE Trades 15 Millionth Contract through Implied Order Functionality
May 30, 2013--The International Securities Exchange (ISE) today announced that trading of multi-legged strategy orders through its Implied Order* functionality has exceeded 15 million contracts. Since ISE launched Implied Order functionality in May 2012, it has accounted for approximately 10 percent of all non-crossing, multi-legged contract volume executed on ISE.
With the notable success of Implied Orders, the functionality has tightened spreads on ISE’s regular order book, which has improved executions for exchange members with both single- and multi-legged orders.
"ISE's Implied Order functionality has exceeded our expectations and delivered significant improvements in execution quality by leveraging liquidity throughout the industry," said Boris Ilyevsky, Managing Director of ISE’s options exchange. “Exceeding the milestone of 15 million Implied Order contracts validates our approach and, coupled with our very competitive pricing structure, demonstrates that ISE will continue to remain a leading routing destination for multi-legged orders."
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Source: International Securities Exchange (ISE)
New State Street Global Advisors ETFs Aimed at Providing Clients with Income and Inflation Protection
May 30, 2013--State Street Global Advisors (SSgA), the asset management arm of State Street Corporation, today announced the availability of the SPDR S&P Global Dividend ETF (symbol:WDIV) and the SPDR Barclays 1-10 Year TIPS ETF (symbol:TIPX).
The SPDR S&P Global Dividend ETF is designed to provide investors with precise exposure to both developed and emerging market dividend paying companies, through a globally diversified income portfolio strategy. The SPDR Barclays 1-10 Year TIPS ETF is designed to provide investors with access to U.S. Treasury Inflation-Protected Securities (TIPS). Both funds began trading on NYSE Arca on May 30, 2013.
"In the sustained low rate environment, clients are grappling with how to meet their income objectives while staying within their own risk boundaries. Investors are embracing strongly diversified income products to provide a level of downside protection in their portfolios, as evidenced by the growth of the SPDR S&P Dividend ETF (symbol:SDY), the SPDR S&P Emerging Markets Dividend ETF (symbol:EDIV) and the SPDR S&P International Dividend ETF (symbol:DWX)," said James Ross, senior managing director and global head of SPDR Exchange Traded Funds at SSgA.
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Source: State Street Global Advisors
Doubts cloud Brazil outlook after disappointing first quarter
May 30, 2013--Brazil's central bank on Wednesday night overlooked weak first quarter economic growth and tightened interest rates more than expected to try to prevent stagflation from worsening in Latin America's biggest country.
In a unanimous decision, the monetary policy committee increased its benchmark Selic interest rate by 50 basis points to 8 per cent to try to rein in inflation, which is hovering near the upper end of the central bank’s target range.
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Source: FT.com
Barron's 400 Index Gains Expertise of Industry Expert John Prestbo
MarketGrader Capital and Barron's Collaborate On Key Stock Index
May 28, 2013--MarketGrader Capital' LLC' announced it has engaged John Prestbo, widely regarded as a guiding force behind the Dow Jones Indexes, as a senior adviser to assist in the growth and development of the Barron's 400 Index.
Prestbo, who is also a columnist for MarketWatch and author, will bring his expertise to MarketGrader’s plans to establish greater prominence to the Barron’s 400 Index, which was jointly developed by Barron’s and MarketGrader.
"We are delighted to have John Prestbo’s expertise and wisdom at hand as we bring investor attention to the Barron’s 400 Index, which provides a key reflection of how many of the best public companies in America are doing,” said Carlos Diez, MarketGrader Capital CEO.
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Source: MarketGrader Capital
Vanguard ETF to Transition to FTSE Index
May 28, 2013--Vanguard Investments Canada Inc. announced that Vanguard MSCI EAFE Index ETF (CAD-hedged) (VEF) will seek to track the FTSE Developed ex North America Hedged CAD Index, effective at the opening of trading at 9:30 a.m. Eastern time on May 29, 2013.
As a result, the name of the exchange-traded fund (ETF) will change to Vanguard FTSE Developed ex North America Index ETF (CAD-hedged). The ticker will stay the same.
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Source: Vanguard
Vanguard Tax-Managed International Fund and ETF to Transition to FTSE Index
May 28, 2013--Vanguard announced that Vanguard Tax-Managed International Fund will seek to track the FTSE Developed ex North America Index, effective at the opening of trading at 9:30 a.m. Eastern time on May 29, 2013.
The target benchmark of the $15.7 billion Tax-Managed International Fund was previously the MSCI EAFE Index. The FTSE benchmark provides similar exposure to large-capitalization companies in developed markets outside of the United States and the transition will not impact the fund’s investment objective or policies.
With the transition, the name of the fund’s ETF Shares will change from Vanguard MSCI EAFE ETF to Vanguard FTSE Developed Markets ETF. The ETF’s ticker symbol (VEA) will remain the same.
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Source: Vanguard
DB-Synthetic Equity & Index Strategy- North America-US ETF Weekly Review-ETP assets fall by 1.1% on market plunge
May 28, 2013--Market and Net Cash Flows Review
Equity markets fell during last week. The US (S&P 500) fell by 1.07%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) dropped by 1.63% and 1.77%, respectively. Moving on to other asset classes, the 10Y US Treasury Yield rose by 6 bps last week; in the meantime broad commodities dropped, with the DB Liquid Commodity Index down by 0.29%.
Similarly, the Agriculture sector (DB Diversified Agriculture Index) and the WTI Crude Oil pulled back by 0.19% and 1.95%, respectively; while Gold and Silver prices moved higher by 1.99% and 0.67%, respectively. Last but not least, Volatility (VIX) rose by 12.37% during the same period.
The total US ETP flows from all products registered $0.28bn (-0.0% of AUM) of outflows during last week vs. $5.24bn (+0.3%) of inflows the previous week, setting the YTD weekly flows average at +$4bn (+$84.15bn YTD in total cash flows).
Equity, Fixed Income, and Commodity ETPs experienced flows of +$1.35bn (0.12%), $-0.004 (-0.0%), and -$1.61bn (-1.99%) last week vs. +$6.57bn (0.58%), -$0.76bn (-0.27%), and -$0.75bn (-0.89%) in the previous week, respectively.
Among US sectors, Financials (+$1.33bn, +2.2%) and Healthcare (+$0.28bn, +1.0%) received the top inflows, while Consumer Staples (-$0.16bn, -1.58%) and Utilities (-$0.14bn, -1.63%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: FIGY (+$1bn), IWM (+$0.8bn), FBG (+$0.6bn)
Top 3 ETPs & ETNs by outflows: SPY (-$2.5bn), GLD (-$1bn), SPLV (-$0.6bn)
New Launch Calendar:
There were 2 ETFs and 2 ETNs launched during the previous week. The ETFs offer access to forward looking dividend growth (DGRW), and HY bonds with an embedded interest rate hedge (HYHG); while the ETNs offer access to international exposures with focus on yield and blue chip European stocks, respectively.
Turnover Review: Floor activity rose by 30%
Total weekly turnover increased by 30.8% to $359.82bn vs. $275.16bn from the previous week. Actually, last week's turnover level was also 33% over last year's weekly average. Equity, Fixed Income and Commodity ETPs turnover increased by $79.6bn (+33.7%), $1.5bn (+6.9%) and $2.8bn (+19.1%) during the same period, respectively.
Assets under Management (AUM) Review: assets dropped by $17bn
US ETP assets dropped by $17.2bn (-1.1%) totaling $1.502 trillion at the end of the week. As of last Friday, US ETPs have accumulated an asset growth of 12.6% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$15.5bn, -$0.8bn, -$0.8bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
Morgan Stanley-US ETF Weekly Update
May 28, 2013--US ETF Weekly Update
Weekly Flows: $310 Million Net Outflows
ETF Assets Stand at $1.5 Trillion, up 12% YTD
ProShares Announces Share Splits
Mosaic to Purchase QuantShares
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net outflows of $310 mln last week; first net outflows in five weeks
Last week’s modest ETF net outflows were only the fourth week of net outflows YTD
US Large-Cap ETFs exhibited the largest net outflows this past week at $2.3 bln; specifically, the SPDR S&P 500 ETF (SPY) exhibited net outflows of $2.5 bln
ETF assets stand at $1.5 tln, up 12% YTD; $82.6 bln net inflows YTD
13-week flows were mostly positive among asset classes; combined $47.7 bln in net inflows
Despite exhibiting net outflows last week, Fixed Income ETFs have generated $14.5 bln in net inflows over the last 13 weeks driven by lower duration products
While ETF net inflows have been robust as a whole over the last 13 weeks, Commodity and International – Emerging Market Equity ETFs have posted $23.9 bln in aggregate net outflows over this period driven by gold, broad emerging markets, Brazil,and China
US-Listed ETFs: Estimated Largest Flows by Individual ETF
The iShares Russell 2000 Index Fund (IWM) posted net inflows of $758 mln last week, the most of any ETF
Despite IWM’s large net inflows last week, the fund has exhibited net outflows eight of the last 13 weeks totaling $355 mln
Interestingly, the iShares MSCI USA Minimum Volatility Index Fund (USMV) generated net inflows of $214 mln last week while the PowerShares S&P 500 Low Volatility Portfolio (SPLV) posted net outflows of $625 mln
The WisdomTree Japan Hedged Equity Fund (DXJ) posted its 23rd consecutive week of net inflows; over this time period DXJ has generated net inflows of $8.0 bln and has returned nearly 43%
US-Listed ETFs: Short Interest
Data Updated: Based on data as of 5/15/13
SPDR S&P 500 ETF (SPY) had the largest increases in USD short interest at $1.1 bln
Despite the increase in short interest, SPY’s 240.2 mln shares short are only 6% above their 52-week average
Aggregate ETF USD short interest increased by $2.6 bln over the period ended 5/15/13
The average shares short/shares outstanding for ETFs is currently 4.5%
The CurrencyShares Japanese Yen Trust (FXY) had one of the highest % of shares short relative to shares outstanding at 187% for
the period ended 5/15/13; FXY has consistently been one of the most heavily shorted ETFs since we began tracking the data and
the trade has recently paid off as FXY is down more than 14% YTD on a market price basis
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 Source: Bloomberg, Morgan Stanley Wealth Management ETF Research. Data estimated as of 5/24/13 based on daily change in share counts and daily NAVs.
$6.8 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
Issuance has been light in 2013 relative to the past three years; 46 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
Seven out of the 10 most successful launches over the past year have an income orientation
The Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) has generated net inflows of $348 mln over the last 13
weeks; notably, longer-dated TIPS ETFs have posted combined net outflows of $1.6 bln over the same time period
The iShares MSCI Frontier 100 Index Fund (FM) cracked the top 10 most successful launches over the past year with a $123 mln
market cap; FM owns securities in countries that have lower market caps and liquidity than emerging markets
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Source: Morgan Stanley
