Americas ETP News
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BlackRock Investment Institute-ETP Flows Quarterly: Behind the Bond Boom
February 4, 2013--Highlights for the fourth quarter include:
ETP flows showed increased risk appetite, with emerging market equities and debt funds both attracting record inflows. Investment grade flows held steady, but investors pulled a small amount out of high yield ETPs.
We provide ratings and industry sector breakdowns for investment grade and high yield ETPs, and highlight the 10 most commonly held individual bonds.
For emerging market debt ETPs, we give a country breakdown that shows Brazilian, Mexican and Russian bonds are most popular.
Inflows into fixed income ETPs typically do not reverse when rates start rising-if (limited) history is any guide.
Volumes of bond ETPs have risen sharply, but liquidity in underlying markets is spotty. Contrary to popular belief, much of fixed income ETP trading does not trickle through to the over-the-counter bond markets.
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Source: BlackRock Investment Institute
Pension funds sue Blackrock, allege "looting" at iShares
February 3, 2013--Two U.S. pension funds have alleged in a lawsuit that Blackrock, the world's biggest asset manager, has looted securities lending returns from iShares exchange-traded funds investors, and breached its fiduciary duties.
In the suit, the pension funds allege that several iShares ETFs spent funds on "grossly excessive compensation" to agents affiliated with the ETFs, as well as on other agents, and they want to recovery the funds for investors.
Blackrock's iShares ETFs have "systematically violated their fiduciary duties, setting up an excessive fee structure designed to loot securities lending returns properly due to iShares investors," they say in the suit, filed on January 18 in the Middle District Court of Tennessee.
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Source: Reuters
Firms Try Varied Designs to Add ETFs
Vanguard Group patent forces other fund companies to think creatively with new offerings.
February 3, 2013--Established mutual-fund companies seeking to add exchange-traded funds to their lineups have a challenge: They need to find a cost-effective way to launch the products in a market where Vanguard Group has one potential design locked up.
More than a decade ago, Vanguard pioneered the idea of offering ETFs as a separate share class of existing mutual funds to create economies of scale and keep costs low. The Malvern, Pa., firm later secured a patent on the structure and so far has kept a monopoly on it.
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Source: Wall Street Journal
Unique Methodology Helps WisdomTree ETFs Soar
February 1, 2013--Exchange-traded fund (ETF) assets have been surging lately as more investors embrace this product type for their portfolios.
While the space continues to be dominated by iShares, PowerShares and State Street, there have been several smaller companies that have begun to make inroads in the market, such as upstart WisdomTree Investments (WETF).
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Source: Forbes
Trading Volume in Vix Futures Rose to New Record in January
Single-Day and Monthly Volume, Open Interest, Reached New Highs During January
New London Connectivity Hub Launched Today
February 1, 2013--The CBOE Futures Exchange, LLC (CFE(R)) announced today that trading activity in futures on the CBOE Volatility Index(R) (VIX(R)) set several new records in January 2013, including total monthly volume, total monthly average daily volume, single-day volume and open interest.
The record 2,897,739 VIX futures contracts traded during January was an increase of 258 percent from the 808,784 contracts traded in January 2012 and a gain of 19 percent from the 2,435,648 contracts traded in December. The previous record for VIX futures monthly volume was 2,734,248 contracts traded during November 2012.
Average daily volume (ADV) in VIX futures during January was 137,988 contracts, also a new record, and up 241 percent and 13 percent, respectively, when compared with the 40,439 contracts a year ago and the 121,782 contracts the previous month. The previous record for VIX futures monthly ADV was 130,202 contracts during November 2012. VIX futures set consecutive single-day volume records on January 2, 2013 and December 31, 2012 with 221,323 contracts and 212,800 contracts traded, respectively, surpassing the previous high of 190,081 contracts on September 13, 2012.
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Source: CBOE
ISE Reports Business Activity For January 2013
February 1, 2013--ISE was the second largest equity options exchange in January with market share of 18.2%, excluding dividend trades.
Dividend trades made up 3.0% of industry volume in January 2013.
The International Securities Exchange (ISE) today reported average daily volume of 2.8 million contracts in January 2013. This represents an increase of 3.1% compared to January 2012. Total options volume for the month was 58.3 million contracts. ISE was the second largest U.S. equity options exchange in January with market share of 18.2%*.
Business highlights for the month of January include:
On January 30, 2013, ISE announced that its new product development group will now be known as ISE ETF Ventures. The new name reflects the group's evolving focus and expanded capabilities in the ETF business. For the month of January, Implied Order functionality accounted for 7.0% of all non-crossing, multi-legged contract volume executed on ISE.
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Source: Mondovisione
Deutsche Bank-Synthetic Equity & Index Strategy-North America-US ETF Model Portfolios-Diversified Momentum Portfolio Update
Commodity and Currency Portfolios boost DMP performance
February 1, 2013--Market Performance
The US equity market (SPY) rallied as we started a new year with a more benign outlook than expected at the end of 2012.
The broad US Fixed Income market (BND) was down by 0.69%; while the Commodity market (DBC) advanced by 2.48% during the same period.
Model Portfolio Performance
Our Diversified Momentum Portfolio (DMP) was up by 2.50% in January. While the equity market and our multi asset class benchmark were up by 5.12% and 2.85%, respectively.
Portfolio Updates and New Membership
All sub-portfolios, with the exception of Currencies, experienced the turnover of at least half of their membership. In terms of portfolio weights, the asset class weights experienced changes across the board. Currencies became the top allocation with 40%, followed by Global Sectors, Treasuries, and Commodities with 30%, 20%, and 10%, respectively.
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Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
Wall Street surges to five-year highs; Dow ends above 14,000
February 1, 2013--Stocks rose to five-year highs on Friday, with the Dow closing above 14,000 for the first time since October 2007, after jobs and manufacturing data showed the economy's recovery remains on track.
The S&P touched its highest since December 2007 after a 5 percent gain in January, which was its best start to a year since 1997. The index is now just about 60 points away from its all-time intraday high of 1,576.09.
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Source: Reuters
Trail-free platform launched
February 1, 2013--Charles Stanley, the stockbroker, is relaunching its Fastrade share dealing service and Fundchoice funds platform as Charles Stanley Direct.
The new execution-only service will feature "clean pricing" on all funds with no trail commission paid by providers.
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Source: FT.com
A new take on the active vs passive debate
Fund investors might be smarter than we thought
February 1, 2013--It depends on how irritable I am feeling on any given day. But sometimes, when I am listening to a fund manager warbling on about the way in which his special investing method has brought his fund fame and fortune, I lean forward-just a little, in a friendly sort of a way-and say: "How do you know you aren’t just very lucky?"
This is mostly taken as an invitation to explain to me a little bit more about just how price to growth or free cash flow ratios are the key to success. And that makes me dream of day when a manager shrugs, smiles and says: “I don’t.”
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Source: FT.com
