Americas ETP News
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What to watch: Newest ETFs don't focus on stocks
February 21, 2013--The economic calendar Friday is the business equivalent of crickets chirping: There's really nothing much going on. But there's always something going on in the world of exchange traded funds-and lately, it's been anything but stocks.
ETFs are the hottest item out of the mutual fund industry. Unlike garden-variety funds, you can buy and sell ETFs throughout the trading day.
The ETF industry now has $1.4 trillion in assets in 1,194 funds, vs. nothing and none in 1992. More keep coming: 12 have launched this year. Despite the stock market's gains this year, just three are diversified stock funds.
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Source: USA Today
Bank loan ETFs: all the rage
February 21, 2013--Junk bonds are the hot investment vehicle-of 2012.
This year’s darling is leveraged loans, the low-rated corporate debt that sits atop bonds in a company’s capital structure (lenders are repaid before bondholders in bankruptcy). At 5.4 per cent on average in the US, according to Capital IQ, these investments pay an attractive yield. But their big selling point is their floating versus fixed interest rate. With Treasury yields rising off of all-time lows, floating-rate investments can provide a hedge.
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Source: Off Shore Corporate News
S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices
February 21, 2013--S&P Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:
The shareholders of Celtic Exploration Ltd. (TSX:CLT) have voted to accept the terms of a Plan of Arrangement with ExxonMobil Canada Ltd.
whereby the shares of Celtic Exploration will be acquired for cash consideration of $CDN24.50 per share as well as one-half share of an exploration company to be named Kelt Exploration. Celtic Exploration will be removed from the S&P/TSX Composite and Capped Composite, the S&P/TSX Completion, the S&P/TSX Capped Energy, and the S&P/TSX Composite Equal Weight Indices after the close of trading on Thursday, February 28, 2013.
Source: S&P Canadian Index Services
Vanguard Will Introduce New Canadian ETPs to Boost Market Share
February 21, 2013--Vanguard Group Inc., the biggest U.S. mutual-fund company, plans to introduce as many as seven Canadian exchange-traded products this year in an effort to take market share from BlackRock Inc. (BLK)'s iShares.
The Valley Forge, Pennsylvania-based asset manager is considering adding four to seven new products to its current lineup of 11 Canadian ETFs, said Atul Tiwari, a managing director for the company’s Canadian operations. Vanguard plans to eventually boost its Canadian market share to 15 percent from 1 percent, according to James Norris, managing director of international operations.
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Source: Bloomberg
ISE Elects Hauke Stars as New Board Member
February 21, 2013--The International Securities Exchange (ISE) today announced that Hauke Stars was elected to ISE's Board of Directors, Mrs. Stars, who was recently named Member of the Executive Board and Chief Information Officer of Deutsche Boerse AG, will begin serving her term with the ISE Board of Directors effective immediately.
“It is my pleasure to welcome Hauke Stars to ISE’s Board,” said Gary Katz, President and Chief Executive Officer of ISE. “We look forward to working with Hauke both as an ISE board member and in her new role as Chief Information Officer of Deutsche Börse. Her experience and knowledge of strategic orientation and profitable execution will prove valuable for our business and in her capacity as a member of ISE’s Board of Directors.”
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Source: International Securities Exchange (ISE)
SEC Announces 2013 Examination Priorities
February 21, 2013--The Securities Exchange Commission today published its examination priorities for 2013, which cover a wide range of issues at financial institutions, including broker-dealers, clearing agencies, exchanges and self-regulatory organizations, investment companies, hedge funds and private equity funds, and transfer agents.
“We are publishing these priorities to promote compliance and communicate with investors and our registrants about areas that we perceive to have heightened risk,” said Carlo V. di Florio, Director of the SEC’s Office of Compliance Inspections and Examinations, which is responsible for the national examination program. “Our examination program constantly seeks new ways to share our perspectives on key risks and regulatory issues so that registrants’ senior management, compliance and risk managers, among others, can take effective action. This document, as well as our Risk Alerts and other public statements, are windows through which we can increase transparency, strengthen compliance, and inform the public and the financial services industry about key risks that we are monitoring and examining.”
view the SEC Examination Priorities for 2013
Source: SEC.gov
State Street Unveils Low Volatility SPDR(R) Exchange Traded Funds Offering Targeted Exposure to Small and Large Cap Equities
February 21, 2013--State Street Global Advisors (SSgA)*, the asset management arm of State Street Corporation (NYSE: STT), today announced the availability of the SPDR Russell 2000(R) Low Volatility ETF (Symbol: SMLV) and the SPDR Russell 1000(R) Low Volatility ETF (Symbol: LGLV).
Designed to provide investors with exposure to small and large cap equities while managing risk, both funds began trading on the NYSE Arca on February 21, 2013.
“Our new low volatility SPDR ETFs were developed in response to increasing demand from investors looking to improve the risk adjusted returns of their portfolio, increase their equity allocation while maintaining downside protection, or tactically take a more defensive approach to the US large cap or small cap markets,” said James Ross, senior managing director and global head of SPDR Exchange Traded Funds at SSgA. “By helping investors and advisors better manage risk in their portfolios, the SPDR Russell 2000 Low Volatility ETF and SPDR Russell 1000 Low Volatility ETF are key additions to our growing family of SPDR ETFs.”
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Source: State Street Global Advisors
Deutsche Bank-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly Review - Equity dominated the weekly flows with $6.2bn in new cash
February 20, 2013--Market and Net Cash Flows Review
Markets were mixed last week. The US (S&P 500, +0.12%) ended almost flat; while, outside the US, the MSCI EAFE (in USD) dropped by 0.49% and the MSCI EM (USD) rose by 0.57%.
Moving on to other asset classes, the 10Y US Treasury Yield rose by 2 bps last week; meanwhile the DB Liquid Commodity Index was down by 0.81%. Similarly, the Agriculture sector (DB Diversified Agriculture Index), Gold and Silver prices retreated by 1.76%, 3.42% and 5.13%, respectively. In the meantime, WTI Crude Oil rose by 0.15%. Last but not least, Volatility (VIX) dropped by 4.30% during the same period.
The total US ETP flows from all products registered $7.2bn (+0.5%) of inflows during last week vs. $1.9bn (-0.1%) of outflows the previous week, setting the YTD weekly flows average at +$5.3bn (+$37.1bn YTD). Equity, Fixed Income, and Commodity ETPs experienced flows of +$6.2bn (0.6%), +$1.0bn (0.4%) and -$0.2bn (-0.2%), respectively.
Among US sectors, Information Technology (+$0.17bn, +0.92%) and Industrials (+$0.12bn, +2.00%) received the top inflows, while Consumer Staples (-$0.14bn, -1.72%) and Consumer Discretionary (-$0.12bn, -1.76%) experienced the largest outflows.
Within Equity ETPs, Large Cap products had the largest inflows (+$1.9bn, +0.8%), while Mid Cap products had the largest outflows of $0.3bn (-0.6%). Within Fixed Income ETPs, Sovereign & Corporates products had the largest inflows (+$0.4bn, +2.6%). Within Commodity ETPs, Precious Metals (-0.2bn, -0.2%) products experienced the most significant flows.
Top 3 ETPs & ETNs by inflows: SPY (+$1.1bn), BSV (+$0.5bn), DXJ (+$0.4bn) Top 3 ETPs & ETNs by outflows: IYR (-$0.2bn), JNK (-$0.2bn), MDY (-$0.2bn)
New Launch Calendar: Income, currencies and low-volatility
There were 7 new ETPs listed during last week; all of them were listed on the NYSE Arca. The new products offer exposure to currencies, low-volatility strategies and access to income through MLPs, BDCs and preferred shares.
Turnover Review: Floor activity decreased by 20%
Total weekly turnover decreased by 20.4% to $221.76bn vs. $278.45bn from the previous week. Last week's turnover level was 18% below last year's weekly average. Commodity ETPs turnover increased by $4.9bn (+43.9%); meanwhile, Equity and Fixed Income ETPs turnover decreased by $57.5bn (-23.5%) and $3.7bn (-18.0%), respectively.
Assets under Management (AUM) Review:
US ETPs AUM rose by $5.1bn
US ETP assets rose by $5.1bn (+0.4%) totaling $1.417 trillion at the end of the week. As of last Friday, US ETPs have accumulated an asset growth of 6.2% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved +$7.8bn, +$0.9bn, -$3.8bn during last week, respectively.
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Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
Morgan Stanley-US ETF Weekly Update
February 20, 2013--Weekly Flows: $7.2 Billion Net Inflows
ETF Assets Stand at $1.4 Trillion, up 6% YTD
Seven ETF Launches Last Week
Guggenheim Announces Nine ETF Closures
US-Listed ETFs: Estimated Flows by Market Segment
ETFs rebounded last week and posted net inflows of $7.2 bln; 2nd largest weekly net inflows of 2013
Net inflows were driven by US Large-Cap and International Equity ETFs last week, exhibiting a combined $3.9 bln in net inflows
Only two segments (US Mid-Cap and Currency) posted net outflows last week for a combined $361 mln
ETF assets stand at $1.4 tln, up 6% YTD; $36.4 bln net inflows YTD
In 2013, ETFs have generated net inflows six out of seven weeks
13-week flows were mostly positive among asset classes; combined $87.7 bln in net inflows
US Large-Cap ETFs generated net inflows of $21.5 bln over the last 13 weeks, the most of any ETF category; despite the impressive flows, it is important to note that one ETF accounted for 62% of the net inflows (SPDR S&P 500 ETF)
The Leveraged/Inverse and Currency ETF categories were the only segments that we measured to exhibit net outflows over the last 13 weeks
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $1.1 bln last week, the most of any ETF
The WisdomTree Japan Hedged Equity Fund (DXJ) has continued its streak to nine consecutive weeks of net inflows totaling $2.8 bln, impressive, in our view, given its $3.8 bln market cap; DXJ offers the unique ability to participate in Japanese equity markets
while neutralizing the impact of currency movements
After posting net inflows of $2.9 bln last year, the SPDR Barclays High Yield Bond ETF (JNK) has exhibited net outflows for three straight weeks, totaling $956 mln; JNK's closest peer, the iShares iBoxx $ High Yield Corporate Bond Fund (HYG), has also posted three consecutive weeks of net outflows (totaling $815 mln)
US-Listed ETFs: Short Interest
Data Updated:
Based on data as of 1/31/13
iShares Russell 2000 Index Fund (IWM) had one of the largest increases in USD short interest at $1.3 bln
Despite the increase in short interest for IWM, IWM’s shares short (159 mln) are 11% below their 52-week average
The Vanguard FTSE Emerging Markets ETF (VWO) is coming off its highest level of shares short since inception; VWO shares short declined 54% from 1/15/13 to 1/31/13
Aggregate ETF USD short interest increased by $2.7 bln over the period ended 1/31/13
The average shares short/shares outstanding for ETFs is currently 5.0%
The SPDR Retail ETF (XRT) exhibited shares short/shares outstanding over 1,000% on 1/15/13; since then, XRT’s ratio has come down, however is still more than 300%, signifying a continued desire to be short the retail space
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
Source: Bloomberg, Morgan Stanley Smith Barney Research. Data estimated as of 2/15/13 based on daily change in share counts and daily NAVs.
$10.4 billion in total market cap of ETFs less than 1-year old
Newly launched Active ETFs account for 48% of the market cap of ETFs launched over the past year; PIMCO Total Return ETF (BOND) is the largest actively managed ETF with a market cap of $4.1 bln
Issuance is off to a slow start in 2013; 10 new ETF listings and three closures YTD (22 announced closures)
The top 10 most successful launches make up 70% of the market cap of ETFs launched over the past year
Six 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) posted net inflows of $45 mln last week; since coming to market on 10/12, VTIP has exhibited net inflows for 18 consecutive weeks and currently has a market cap of $257 mln
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Source: Morgan Stanley
GETCO and Knight Announce Management Team for Combined Firm
February 20, 2013-- GETCO Holding Company, LLC ("GETCO") and Knight Capital Group, Inc. (NYSE: KCG, "Knight") today announced the management team of the new public company that will own GETCO and Knight upon completion of their pending transaction.
As previously disclosed, the combined firm will be led by Daniel Coleman, Chief Executive Officer of GETCO. Thomas M. Joyce, currently Knight's Chairman and Chief Executive Officer, will serve as Executive Chairman of the Board of Directors.
"The senior management team that we are announcing today possesses the expertise to successfully integrate our two organizations, develop new and innovative products and, most importantly, serve the needs of our clients across multiple asset classes and time zones," Mr. Coleman said. "We are fortunate to have a strong team of senior managers at both Knight and GETCO. We appreciate the significant leadership contributions from both organizations, and look forward to working with the new management team."
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Source: Knight Capital Group
