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Morgan Stanley-US ETF Weekly Update
May 21, 2012--US ETF Weekly Update highlights
Weekly Flows: $1.7 Billion Net Inflows
ETF Assets Stand at $1.1 Trillion, up 6% YTD
No ETF Launches Last Week
Direxion Announces Changes to Volatility Suite
US-Listed ETFs: Estimated Flows by Market Segment
Despite turbulent markets, ETFs posted net inflows for the second consecutive week
Last week’s net inflows were primarily driven by Fixed Income and US Small & Micro-Cap ETFs ($2.8 bln combined net inflows)
ETF assets stand at $1.1 tln, up 6% YTD; ETFs have posted net inflows 16 out of 20 weeks YTD ($54.8 bln in net inflows)
13-week flows were mostly positive among asset classes; combined $23.8 bln net inflows
Fixed Income ETFs have consistently generated weekly net inflows (40 straight weeks of net inflows) and account for 63% of ETF net inflows over the past 13 weeks
Emerging Market Equity ETFs exhibited net outflows of $2.2 bln, the most out of any category over the last 13 weeks
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares Russell 2000 Index Fund (IWM) generated net inflows of $1.1 bln last week, the most of any ETF
Given weakness in financials last week, it does not come as a surprise to us that the Financials Select Sector SPDR (XLF) posted net outflows of $762 mln for the week (XLF has exhibited net outflows 10 of the past 13 weeks)
Over the last 13 weeks, five out of the top 10 ETFs to post the largest net inflows are sponsored by Vanguard; Vanguard has consistently generated quarterly net inflows since we began tracking flows in 2004
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 4/30/12
iShares Russell 2000 Index Fund (IWM) posted the largest increase in USD short interest
Despite a surge in IWM’s USD short interest, the fund’s 197 million shares short are well below its 52-week average of 228 million shares short
SPDR S&P 500 ETF (SPY) exhibited the largest decrease in USD short interest (lowest level of shares short since 1/31/11)
The average shares short/shares outstanding for ETFs is currently 5%
Retail continues to be a heavily shorted industry with the SPDR Retail ETF (XRT) leading the way
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100%
US-Listed ETFs: Most Successful Recent Launches by Assets
Source: Bloomberg, Morgan Stanley Smith Barney Research. Data estimated as of 5/18/12 based on daily change in share counts and daily NAVs.
$6.6 billion in total market cap of ETFs less than 1-year old
Over the past 13 weeks, newly launched Fixed Income ETFs generated the most net inflows at $911 mln
97 new ETF listings and 17 closures YTD; coinciding with flows, ETF sponsors have launched more Fixed Income ETFs (25 ETFs) than any other market segment YTD
Over the past year, many of the successful launches have an income/dividend orientation
Five different ETF sponsors and three asset classes represented in top 10 most successful launches
Over the past year, iShares has launched 54 ETFs that collectively have $1.7 bln in assets, the most of any ETF sponsor by both measures (five largest iShares launches represent 61% of the $1.7 bln)
Top 10 most successful launches account for 54% of market cap of ETFs launched over the past year
request report
Source: Morgan Stanley
Talking ETFs with the Investment Company Institute
May 21, 2012--It had been years since I last attended the general membership meeting of the Investment Company Institute, the mutual fund trade organization.
In 2004, funds and fund companies were just emerging from the market-timing scandals that sullied several firms. They were also girding for a wave of regulatory grenades. That year, ICI even sacrificed its chairman and president to a closed-door media firing squad. Never again, I’m told.
rad more
Source: Forbes
PowerShares files with the SEC
May 21, 2012--PowerShares has filed a post-effective amendment, registration statement with the SEC for the Powershares Actively Managed Exchange-Traded Fund Trust.
read more
Source: SEC.gov
PowerShares files with the SEC
May 21, 2012--PowerShares has filed a post-effective amendment, registration statement with the SEC for the Powershares Actively Managed Exchange-Traded Fund Trust.
read more
Source: SEC.gov
Cost stance at Vanguard lures cash
May 20, 2012--The Vanguard Group Inc. has been shouting about the benefits of low-cost investing since the firm was founded nearly 40 years ago, but the message has never resonated with investors more than today.
Vanguard has never struggled to attract investors, but the success that it has had this year is unprecedented. One of every three dollars invested in mutual funds and exchange-traded funds through the first four months of the year went to Vanguard, according to Morningstar Inc
read more
Source: Investment News
Barclays Issues Investor Guidance on iPath Dow Jones-UBS Natural Gas Subindex Total Return Exchange Traded Notes (Ticker: GAZ).
May 20, 2012--On May 18, 2012, Barclays Bank PLC ("Barclays") announced an investor guidance notification
today regarding the iPath Dow Jones-UBS Natural Gas Subindex Total Return
SM Exchange Traded Notes (the
"ETNs"). The ETNs currently trade on the NYSE Arca stock exchange under the ticker symbol "GAZ".
Barclays previously announced the temporary suspension of further issuances of the ETNs on August 21,
2009. As described in that press release and also in the pricing supplement relating to the ETNs, the
limitations on issuance and sale implemented could from time to time cause an imbalance of supply and
demand in the secondary market for the ETNs, which may cause the ETNs to trade at a premium or discount
in relation to their indicative value.
Recently, there has been a persistent and material premium in the trading price of the ETNs on the exchange in relation to their intraday indicative value. From January 31, 2012 to May 17, 2012, the indicative value decreased by approximately 19% from $3.02 to $2.46 per ETN, while the closing price of the ETNs on the exchange increased by approximately 18% from $3.13 to $3.69 per ETN. The closing price of the ETNs on the exchange as of May 17, 2012 reflected a 50% premium to current indicative value.
read more
Source: Barclays
An Emerging Problem
Some developing-market ETFs are increasingly performing just like funds focused on the developed markets- but with more risk. Time for a change?
May 19, 2012--Through accidents of history and stock indexing, the most popular emerging-markets funds now offer investors more than a way to participate in the growth of small, developing economies.
Consider: The category's biggest funds devote about a quarter of their holdings to South Korea and Taiwan, two big, wealthy nations. Packed with the stocks of global conglomerates, the funds trade in increasing lockstep with developed markets. Tellingly, their returns since the financial crisis are roughly even with the most heavily trodden swath of the well-to-do world–the U.S.
The largest two emerging-markets ETFs, tracking the same MSCI benchmark, used to rip ahead of advanced markets. Their returns since the financial crisis are roughly even with the U.S.
read more
Source: EGShares – Emerging Market ETFs
CFTC Considers Loosening Dodd-Frank Speculation Limits
May 18. 2012--The U.S. Commodity Futures Trading Commission may propose easing Dodd-Frank Act regulations limiting speculation in oil, natural gas, wheat and other commodities, according to four people briefed on the matter.
The CFTC’s five commissioners are considering a private vote to change how companies aggregate their trading positions when they have ownership stakes in other firms, according to the people, who spoke on condition of anonymity. The agency may propose raising to 50 percent from 10 percent the threshold for when a company is considered to have an ownership stake and must add the trading positions, the people said.
read more
Source: Bloomberg
Pimco experiment beats flagship fund
May 18, 2012--Pimco's widely watched experiment with the industry's first sizeable actively managed exchange traded fund, the Total Return ETF, has significantly outperformed the flagship mutual fund on which it is based.
While both are managed by Bill Gross, the Total Return Fund ETF is up 4.8 per cent since it launched on March 1, with reinvested dividends, while the Total Return Mutual Fund has returned just 1.9 per cent, according to Morningstar, a research group.
read more
Source: FT.com
CFTC Approves Notice of Proposed Rulemaking Regarding Regulations on Aggregation for Position Limits for Futures and Swaps
May 18, 2012--The Commodity Futures Trading Commission (CFTC) today approved a notice of proposed rulemaking that would modify the CFTT's aggregation provisions for limits on speculative positions.
The proposed rulemaking would permit any person with a greater than 10 percent ownership or equity interest in an entity to disaggregate the owned entity’s positions, provided there are protections and firewalls in place to ensure trading decisions are made independently of one another.
This proposed rulemaking is in response to a January 19, 2012, petition of the Working Group of Commercial Energy Firms (WGCEF) filed under section 4a(a)(7) of the Commodity Exchange Act (CEA) seeking relief from the aggregation provisions of rule 151.7. The Commission invites the public and interested parties to comment on the proposed rule. The comment period will be open for 30 days after publication in the Federal Register.
view the Federal Register: Aggregation Under Part 151, Position Limits for Futures And Swaps
Source: CFTC.gov
