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Market Vectors Emerging Markets Local Currency Bond ETF (EMLC) Passes $1.5 Billion Mark
Strong emerging market fundamentals coupled with perceived weakness in developed market currencies have driven interest in EMLC, the first U.S.-listed ETF to provide exposure to local currency EM bonds
March 5, 2013-Market Vectors Emerging Markets Local Currency Bond ETF (NYSE Arca: EMLC), has surpassed $1.5 billion in assets under management (AUM), it was announced today.
EMLC has seen an increase of more than $500 million in AUM in the last three months.
“Many local currency-denominated emerging market bonds are currently delivering more attractive yields than traditional fixed income investments, while at the same time offering currency and credit fundamentals that appear to be on more solid footing than fixed income investments denominated in U.S. Dollars, Euros or the Yen,” said Fran Rodilosso, fixed income portfolio manager at Market Vectors ETFs and one of two EMLC portfolio managers. “EMLC offers an excellent way to gain exposure to this space and the list of constituent countries in the Fund’s underlying index has been growing, with Romania and Nigeria having been recently added.”
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Source: Market Vectors ETFs
New Research from Global X Funds Examines the Case for High-Dividend Equity Investments
Investment study shows high-dividend stocks often perform better with less volatility
MArch 14, 2013--Global X Funds, a New York sponsor of innovative exchange traded funds (ETFs) is pleased to announce the results of its new study examining the performance and relative volatility of high dividend-paying stocks over time.
According to the new research, dividend-paying stocks outperformed non-dividend payers, while higher yielding companies generally provided higher risk-adjusted returns.
The firm’s new research paper, “High Dividends: Myth vs. Reality,” provides new research on volatility and addresses common misconceptions surrounding high dividend-paying stocks. It can be accessed via the firm’s website here.
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Source: Global X
NASDAQ OMX-How Will Sequestration Affect the Defense Industry
March 4, 2013-Sequestration, a process that automatically cuts the federal budget across most departments and agencies, took effect on Friday, March 1, 2013, as Congress and President Obama failed to reach an accord. The $1.2 trillion in cuts will be phased in with half the cuts focused on the Department of Defense (DoD) budget.
The first phase of the cuts in 2013 will remove $85 billion,
which pulls $46 billion from the DoD budget.
Sequestration has been in the news for months as the public has speculated that Congress would be unable to prevent these large scale cuts. Yet
the equity markets were not negatively impacted, and we’ve seen a strong start to 2013. In fact, the NASDAQ U.S. Benchmark Index (NQUSB) has
gained 6.71% since January 1, and the individual sector with the highest exposure to the government cuts, Defense, has also faired exceptionally
well with a gain of 6.90%. Will the Defense sector be able to maintain its performance streak into 2013 as these cuts begin to be implemented?
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Source: NASDAQ OMX
Morgan Stanley-US ETF Weekly Update
March 4, 2013--US ETF Weekly Update
Weekly Flows: $2.7 Billion Net Inflows
ETF Assets Stand at $1.4 Trillion, up 5% YTD
Three ETF Launches Last Week
Direxion Announces Share Splits
State Street Announces Changes to Infrastructure ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $2.7 bln last week
Last week's net flows were driven by US Large-Cap ETFs (+$2.5 bln) on the plus side and Commodity ETFs (-$1.4 bln) on the negative; 11 out of the 15 categories exhibited net inflows
ETF assets stand at $1.4 tln, up 5% YTD; $37.6 bln net inflows YTD
13-week flows were mostly positive among asset classes; combined $66.2 bln in net inflows
International Equity ETFs have posted net inflows of $31.2 bln over the last 13 weeks, which equates to 47% of ETF net inflows over this period, while the segment accounts for only 22% of ETF market cap
Commodity and Currency ETFs are the two categories that we measured to exhibit net outflows over the last 13 weeks (combined $4.3 bln in net outflows)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
The top 3 ETFs to post net inflows last week track the S&P 500, generating a combined $3.3 bln in net inflows
Not only did the ETFs that track the S&P 500 Index have a strong last week, over the past 13 weeks they have posted a combined $12.1 bln in net inflows (18% of all ETF net inflows)
Despite a difficult last week, the iShares MSCI Emerging Markets Index Fund (EEM) has generated net inflows of $7.5 bln over the last 13 weeks, the most of any ETF
The SPDR Gold Trust (GLD) has not posted a weekly net inflow in 13 weeks and over this time period has exhibited net outflows of $5.1 bln; GLD’s market cap has declined from $74.3 bln to $63.5 bln over the past 13 weeks
US-Listed ETFs:
Short Interest
Data Updated: Based on data as of 2/15/13
SPDR S&P 500 ETF (SPY) had the largest increases in USD short interest at $2.1 bln
Notably, the SPDR Barclays High Yield Bond ETF (JNK) exhibited its highest level of shares short since inception; JNK had 26.2
mln shares short as of the period ended 2/15/13, up 82% since the last period
Aggregate ETF USD short interest increased by $4.3 bln over the period ended 2/15/13 and has now increased $7.0 bln the last two periods; despite the increase in short interest, financial markets have remained resilient
The average shares short/shares outstanding for ETFs is currently 4.8%
Interestingly, the top 10 ETFs most heavily shorted as a % of shares outstanding does not change much; certain areas of the market
such as retail, currency, and real estate seem to consistently make the list
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only four 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 3/1/13 based on daily change in share counts and daily NAVs.
$10.2 billion in total market cap of ETFs less than 1-year old
Newly launched Active ETFs account for 51% 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 $4.4 bln; BOND hit its one-year anniversary on 3/1
Issuance is off to a slow start in 2013; 15 new ETF listings and 16 closures YTD (nine announced closures)
The top 10 most successful launches make up 74% 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 First Trust Multi-Asset Diversified Income Index Fund (MDIV) cracked the top 10 most successful launches last week; MDIV has a market cap of $147 mln and has benefitted from the search for yield; MDIV owns dividend-paying equities, REITs,
MLPs, preferreds, and high yield debt
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Source: Morgan Stanley
Vanguard cuts costs on intl equities ETF
March 4, 2013--March 4, 2013--Vanguard has reduced the headline cost of its All-World ex-US Shares Index Exchange Traded Fund (ETF) from 0.18% to 0.15%.
According to the index fund specialist, the management expense ratio on the product has fallen by an average of 10 basis points since it was listed for trading on the ASX in 2009.
The move follows similar fee cuts across seven of its flagship Australian-domiciled wholesale index funds and two other cross-listed ETFs.
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Source: Financial Standard
XTF Capital Corp.: Distribution Press Release
March 4, 2013--Canadian Convertible Liquid Universe ETF (TSX:CXF)(TSX:CXF.A) announces a distribution of $0.0417 per Common Unit and $0.0354 per Advisor Unit for the month ending January 31, 2012.
The distribution will be paid on or before February 2, 2012 to unitholders of record on January 30, 2012. The ex-dividend date is January 26, 2012.
Source: XTF Capital Corp.
U.S. Bancorp Names Business Development Officer
March 4, 2013--U.S. Bancorp Fund Services expanded its exchange-traded fund (ETF) administration and unit investment trusts (UIT) division support services with the addition of Mike Castino.
Castino joins U.S. Bancorp Fund Services as a business development officer for its exchange-traded funds (ETFs) division. He is based in U.S. Bank’s Naperville, Illinois, office.
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Source: Plan Sponsor
Horizons ETFs Announces ETF Closures
March 1, 2013--Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate Horizons ETFs Management ( Canada ) Inc. (the "Manager") announced today that they will be terminating certain exchange traded funds ("ETFs") effective at the close of business on Friday, May 31, 2013 (the "Termination Date").
The ETFs being terminated (collectively, the "Terminated ETFs") are as follows:
ETF: Horizons BetaPro US Dollar Bull Plus ETF
Ticker: HDU
Horizons BetaPro US Dollar Bear Plus ETF
Ticker: HDD
Effective immediately, no further direct subscriptions for units of the Terminated ETFs will be accepted.
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Source: Horizons Exchange Traded Funds
Vanguard Readies Emerging Markets Bond ETF in Q2
March 1, 2013--Vanguard is expanding its family of bond offerings with plans to introduce a Vanguard Emerging Markets Government Bond Index Fund and its ETF Shares by the end of the second quarter of 2013.
"Our research shows that emerging markets bonds have presented low correlations with domestic and developed market bonds, and have the potential to add value for certain risk-tolerant investors holding an otherwise broadly diversified portfolio," said Vanguard CEO Bill McNabb. "Nevertheless, we do caution investors against simply investing on the basis of the higher yields offered by emerging markets bonds, as the higher yields are accompanied by higher risks, including greater volatility and higher correlation to equity markets, as well as political risk."
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Source: Fox Business
CFTC.gov Commitments of Traders Reports Update
March 1, 2013--The current reports for the week of February 26, 2013 are now available.
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Source: CFTC.gov
