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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
Minutes of the Federal Open Market Committee January 29-30, 2013
February 20, 2013--The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on January 29-30, 2013.
The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. The descriptions of economic and financial conditions contained in these minutes are based solely on the information that was available to the Committee at the time of the meeting.
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Source: FRB
.....Montreal Exchange Achieves New Volume Records
February 19, 2013--TMX Group Limited today announced that Montreal Exchange (MX) achieved two new volume records.
A new overall volume record of 701,657 contracts traded on February 15, 2013, surpassing the old record of 552,869 contracts established on February 22, 2007.view more
Source: TMX Group
Talent coup for Fidelity''s fledgling ETF team
February 19, 2013--Fidelity has hired former iShares and Russell product chief Greg Friedman as it builds up its exchange traded fund business.
Mr Friedman, most recently chief operating officer and head of product development at Russell ETFs, joined Fidelity's new select sector division, a company spokesman confirmed.
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Source: FT.com
Volatility Falls Most Since 1930s as Stock Funds Gain
February 19, 2013--Price swings in U.S. stocks are narrowing the most since the Great Depression, a signal of reviving investor confidence that's fueling the bull market poised to enter its fifth year.
Average daily price moves for the Standard & Poor’s 500 Index have fallen to 0.43 percent in 2013 from an average 1.08 percent the past five years, the steepest decline for any corresponding period since the 1930s, according to data compiled by Bloomberg. The last time the annual average was this low was 1995, when the S&P 500 surged 34 percent and doubled in the next four years. Stocks gain an average 17 percent during years when the gyrations are so small, the data going back to 1928 show.
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Source: Bloomberg
US ETF Snapshot: January 2013
February 18, 2013--1,239 Exchange Traded Funds (ETFs)-with assets totaling $1.4TN-were managed by 38 ETF managers as of January 31, 2013.
Month over month, ETF assets increased $67.7BN, up 5.0%.
Gains of over $9BN in both the International-Developed and Size-Large Cap categories fueled a 5.0% increase in assets in January.
STATE STREET HIGHLIGHTS, JANUARY 2013
2013 Investment Themes: Income Investing Today
With the continued low rate environment, income-oriented investors are faced with a decision: Continue to accept low levels of current income (in many cases negative in real terms), or risk higher levels of price volatility in the income segment of the portfolio. But it is not all bad news. A global multi-asset income portfolio offers the prospect of positive real yields and diversification benefits. In addition, it has the potential for capital appreciation over time through exposure to dividend paying equities, real estate investments and new fixed income asset classes.
Asset Classes — Overall ,br>The S&P 500® Index returned 5.2%, while the MSCI EAFE® increased 5.3%. Commodities were positive, with the S&P GSCI® up 4.4% and Gold increasing 0.4%. US Bonds were negative with the Barclays US Treasury Index and the Barclays US Aggregate Index dipping 0.8% and 0.7%, respectively.
FLOWS
ETF flows topped $29BN in January. The International - Developed category and International - Emerging category both had a strong month attracting $5.4BN and $6.9BN in inflows. The Dividend/Fundamental category had $3.9BN of inflows in January.
Manager and Fund Detail
The top three managers in the US ETF marketplace were: BlackRock, State Street and Vanguard. Collectively, they account for approximately 84% of the US-listed ETF market.
The top three ETFs in terms of dollar volume traded for the month were the SPDR S&P 500 [SPY], iShares Russell 2000 [IWM] and PowerShares QQQ [QQQ].
For more information, including product fact sheets, related whitepapers or to read more visit www.spdrs.com
Source: State Street Global Advisors
Focus on execution and methodology creates winning products
February 18, 2013--Getting the execution right when managing a commodity ETF, irrespective of the underlying index it is tracking, is fundamentally important.
It’s something that Martin Kremenstein (pictured), CEO and CIO, Deutsche Bank Commodity Services LLC, and his team are fully focused on, particularly given the size of the firm’s flagship commodity ETF: DB Commodity Index Tracking Fund (DBC), which, with USD 7 billion in AUM, makes it the largest broad-based commodities ETF in the world.
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Source: Hedge Week
Swapping Index Partners
Competition among index creators is encouraging ETF sponsors to shop around for better benchmarks-and cheaper licensing deals. What it means for investors. Also, commission-free ETF trading, and a bevy of new funds.
February 16, 2013--"Fee war" or not, there's no denying big exchange-traded fund companies compete on cost.
The rivalries are extending beyond management fees to include brokerage commissions and, more
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Source: Barrons
