Americas ETP News
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The Federal Budget Deficit Totaled $1.1 Trillion in 201,, CBO Estimates
October 5, 2012--The federal government's fiscal year 2012 has come to a close, and CBO estimates-in its latest Monthly Budget Review-that the federal budget deficit for the year was about $1.1 trillion, or 7.0 percent of gross domestic product (GDP).
Although the deficit is approximately $200 billion lower than the shortfall recorded in 2011, fiscal year 2012 marks the fourth year in a row with a deficit of more than $1 trillion. As a share of economic output, the deficit has fallen in recent years—from 10.1 percent of GDP in 2009 to 9.0 percent in 2010 and 8.7 percent in 2011.
The decline in the deficit stems largely from an increase in revenues. Revenues were about 6 percent higher in fiscal year 2012, driven in part by a significant influx of corporate income tax receipts. Outlays were about 2 percent lower than they were last year.
view the Monthly Budget Review
Source: CBO
Morgan Stanley-Vanguard Announces Index Changes
October 5, 2012--On October 2, 2012, Vanguard announced it is changing the benchmarks on 18 of its exchange-traded funds (ETFs). Both
domestic and international Vanguard equity funds are being affected as the ETFs move from tracking MSCI indices to FTSE and University of Chicago's CRSP indices.
The change not only impacts
Vanguard ETFs, but also affects select Vanguard index mutual funds
and fund of funds. In addition to index changes, seven Vanguard
ETFs will undergo name changes. In this report, we are only highlighting the ETF changes.
Vanguard is one of the lowest cost ETF providers. Based on available information and our conversations with the fund company, we believe Vanguard is making the changes in order to reduce current and future fund expenses. Index licensing fees can make up a significant amount of an ETF’s expense ratio and Vanguard notes that in switching index providers it has locked in favorable longterm agreements with both FTSE and CRSP, which should result in cost savings. Due to Vanguard’s unique structure, these savings should eventually flow to investors in the form of lower expense ratios.
We do not have a clear timeline on the transition period.
Vanguard anticipates the changes to be staggered and does not expect them to begin for several months. We believe this will minimize front running, spread out the impact from the changes, and allow investors to decide whether or not they want to maintain their Vanguard holdings.
request report
Source: Morgan Stanley
SEC officials urge comprehensive review of U.S. marketplace
October 4, 2012--A comprehensive review of the U.S. stock market is in order because an enormous increase in new rules has exacerbated the risk of an outdated regulatory framework, a commissioner with the Securities and Exchange Commission said on Thursday.
Today's stock market bears little resemblance to almost two decades ago, when the SEC last undertook a thorough evaluation that resulted in the Market 2000 report, said SEC Commissioner Daniel Gallagher.
read more
Source: Reuters
SEC officials urge comprehensive review of U.S. marketplace
October 4, 2012-- A comprehensive review of the U.S. stock market is in order because an enormous increase in new rules has exacerbated the risk of an outdated regulatory framework, a commissioner with the Securities and Exchange Commission said on Thursday.
Today's stock market bears little resemblance to almost two decades ago, when the SEC last undertook a thorough evaluation that resulted in the Market 2000 report, said SEC Commissioner Daniel Gallagher.
read more
Source: Reuters
DB-Global Equity Index and ETF Research-Asia-Pac ETF Market Weekly Review - ETP Market recorded $2bn inflows in September
October 4, 2012--Market Review
Last week, Asia-Pacific region had mixed markets. From north to south, Japan (Nikkei 225) lost 2.63%, Korea (KOSPI2) fell by 0.35%, China (CSI 300) appreciated by 4.28%, Hong Kong (HSI) gained 0.51%, Singapore (FSSTI) slid by 0.58%, and Australia (S&P/ASX 200) declined by 0.48% over the previous week.
New ETP launches
Last week, two ETP issuers made their debut and each launched one Equity ETF in the Asia-Pacific ETP market. Yinhua Fund Management listed one Equity ETF on Shanghai Stock Exchange tracking the SSE 50 Equal Weight Index and Lippo Investments Management listed one Equity ETF on Hong Kong Exchange tracking Lippo Select HK & Mainland Property Index. (See Figure 5 for further details).
ETP Monthly Flows
Asia-Pacific ETP market recorded monthly cash inflows of $2bn for the month of September, taking the YTD cash flows to +$24.3bn or 26.6% of last year’s end AUM. Prior to that, Asia-Pacific region recorded monthly flows of $13.4bn, $4.4bn, $2.4bn and $1.5bn for May, June, July and August respectively. Within Equity products, ETFs offering exposure to Japan and China received robust cash inflows of $2.1bn and $0.7bn respectively, while South Korea and Taiwan focused ETFs experienced outflows of $0.4bn and $0.3bn.
Turnover Review
Asia-Pacific ETP turnover totaled $7.1bn for last week, 8.8% up from the previous week’s total. South Korea continues to be on top of the turnover ranking with $2.6bn, followed by China ($2.2bn), Hong Kong ($1.3bn), Japan ($0.6bn), and Singapore ($0.1bn). Among Equity ETFs, Emerging Country, Leveraged Strategy, Asia Pac Developed Country and Short Strategy ETFs recorded total turnover of $3.9bn, $1.2bn, $0.9bn and $0.6bn respectively. Under the Commodity asset class, turnover in Gold ETPs totaled $89m.
Asset Under Management Review
Last week, Asia-Pacific ETP AUM ended at $119.7bn after $3.3bn increase over the previous week. On a year to date basis, Asia-Pacific ETP assets are up by $28.2bn or 30.9% above last year’s closing.
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http://pull.db-gmresearch.com/p/526-9AB7/38683361/Asia-Pac_ETF_Market_Weekly_Review.pdf
Source: Deutsche Bank - Equity Research - Asia Pacific
CFTC's Division of Swap Dealer and Intermediary Oversight Provides Guidance on Segregated and Secured Funds Maintained in a Combined Omnibus Account
October 4, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today released a letter providing guidance to registered futures commission merchants (FCMs).
The letter is intended to identify a situation whereby FCMs may be inappropriately utilizing an omnibus account with their clearing FCM in which they are combining segregated and secured funds in one account.
The letter is available at the Commission’s Web site:
read more
Source: CFTC.gov
IndexIQ Launches QMN As Latest In Innovative Family Of Absolute Return Hedge Fund ETFs
IQ Hedge Market Neutral Tracker ETF (QMN) expands industry-leading hedge fund replication ETF family
October 4, 2012--IndexIQ, a leading developer of liquid index-based alternative investment solutions, is launching the newest addition to its Exchange-Traded Fund family, the IQ Hedge Market Neutral Tracker ETF (QMN, on October 4, 2012, it was announced today.
QMN is designed to offer investors liquid, transparent Market Neutral hedge fund exposure.
QMN will seek to track, before fees and expenses, the performance characteristics of the IQ Hedge Market Neutral Index (IQHGMN), part of IndexIQ’s proprietary IQ Hedge family of benchmark hedge fund replication indexes. The IQ Market Neutral Index (IQHGMN) has live performance dating from September 2008.
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Source: IndexIQ
Minutes of the Federal Open Market Committee, September 12-13, 2012
October 4, 2012--Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated.
Household spending has continued to advance, but growth in business fixed investment appears to have slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.
read more
Source: FRB
FlexShares files with the SEC
October 3, 2012--FlexShares has filed a post-effective amendment, registration statement with the SEC.
view filing
Source: SEC.gov
Singapore Exchange Derivatives Trading Limited's MSCI Indonesia Index Futures
Contract has been Certified and may be Offered to U.S. persons through Direct Access Effective October 2, 2012
October 3, 2012-- On August 15, 2012, Singapore Exchange Derivatives Trading Limited (SGX) requested expedited Commodity Futures Trading Commission (CFTC) review of the SGX's MSCI Indonesia Index futures contract so that it may be offered to U.S. persons.
SGX also requested that the contract may be made available through direct access terminals in the United States.
The CFTC’s Division of Market Oversight reviewed the contract and determined that it satisfied the requirements of the Commodity Exchange Act (Act) and the Commission’s Regulations. Accordingly, the MSCI Indonesia Index futures contract is deemed to be in conformance with the Act and therefore may be offered or sold to persons in the U.S. SGX may make the contract available for trading through its direct access terminals in the U.S.
Source: CFTC.gov
