Americas ETP News
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iShares Launches New Income Focused ETFs
"First-to-market" funds deliver comprehensive access to global high yield markets, from developed to emerging
April 3, 2012--BlackRock, Inc. (NYSE:BLK - News) announced that its iShares Exchange Traded Funds (ETFs) business, the world's largest manager of ETFs, launched two new funds today with two more scheduled to launch on April 5.
The new funds include three "first to market" products designed to offer exposure to high yield securities across the global developed and emerging markets. The fourth new fund is an “ETF of iShares ETFs” that seeks to provide single-trade access to a diversified set of income sources.
"Market conditions – in particular, an unprecedented low rate environment – continue to make it vital for investors of all kinds to identify new sources of yield and income," said Darek Wojnar, Head of U.S. iShares Product Development and Management at BlackRock. “In many cases, they need ready access to a broader range of global solutions for yield and income.
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Source: BlackRock
Financial Stability Oversight Council Approves Rule To Designate Nonbank Financial Companies For Enhanced Oversight, Help Prevent Future Financial Crises
April 3, 2012--The Financial Stability Oversight Council ("the Council") today took another key step toward increasing oversight and addressing risks to U.S. financial stability by issuing the final rule and guidance that details the analysis and process the Council intends to use when determining which nonbank financial companies should be subject to enhanced prudential standards and to supervision by the Board of Governors of the Federal Reserve System.
This authority is an important component of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("the Dodd-Frank Act") and is one of a number of tools now available to constrain risk and help prevent future financial crises.
With this vote, the Council will begin a three-stage designations process. Secretary Geithner, the chairperson of the Council, has indicated that the Council will work to make the first of these designations this year.
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Source: US Department of the Treasury
Horizons ETFs launches innovative Managed Futures ETF
March 3, 2012--Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. ("AlphaPro") are pleased to announce the launch of the Horizons Auspice Managed Futures Index ETF ("Horizons HMF"), an innovative alternative strategy exchange traded fund that offers investors an opportunity to get exposure to a managed futures strategy.
Horizons HMF will offer investors exposure to the Auspice Managed Futures Excess Return Index (the "Auspice Index"), which is a managed futures index developed by Calgary-based Auspice Capital Advisors Ltd. ("Auspice").
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Source: Horizons Exchange Traded Funds Inc
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
April 3, 2012--Standard & Poor's will make the following changes in the S&P/TSX Canadian Indices:
The shareholders of Provident Energy Ltd. (TSX:PVE) have accepted the share exchange offer from Pembina Pipeline Corporation (TSX:PPL).
Provident Energy will be removed from the S&P/TSX Composite and Capped Composite, the S&P/TSX Equity and Capped Equity, the S&P/TSX Completion and Equity Completion, the S&P/TSX Composite Dividend, the S&P/TSX Equity Income and the S&P/TSX Composite Equal Weight Indices effective after the close on Thursday, April 5, 2012.
Pembina Pipeline Corporation (TSX:PPL) has announced the closing of the acquisition of Provident Energy Ltd. As a result of the issuance of shares, the relative weight of Pembina Pipeline will increase in the S&P/TSX Composite and Capped Composite, the S&P/TSX Equity and Capped Equity, the S&P/TSX Equity Income, the S&P/TSX Completion and Equity Completion and the S&P/TSX Composite Dividend indices. These changes will be effective after close on Thursday, April 5, 2012.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Statement Before the Financial Stability Oversight Council-Chairman Gary Gensler
April 3, 2012--Good afternoon. I thank Secretary Geithner for calling today's meeting of the Financial Stability Oversight Council (FSOC). I also thank my fellow regulators and FSOC members for their coordination and consultation on the rule-writing process to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
Lastly, I want to thank the staffs of all the agencies for their efforts in coordinating amongst eight agencies.
I support the final rule and guidance on designations of nonbank financial companies.
Title I of the Dodd-Frank Act authorizes the FSOC to determine whether certain financial companies that are not banks could pose a threat to the financial stability of the United States.
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Source: CFTC.gov
Morgan Stanley-ETF Fund Flows-Preliminary 1Q 2012 ETF Net Cash Flow
April 3, 2012--We estimate that net cash inflows into US-listed ETFs were
$51.6 billion during the first quarter of 2012. This report contains our estimates and analysis of 1Q 2012 ETF flows for the US market. Once official data are released, we will publish our more comprehensive flow analysis
Net inflows into US-listed ETFs were $51.6 billion during 1Q 2012. The 1Q 2012 net cash inflows is the highest quarterly inflow since the fourth quarter of 2009 ($54.6 billion) and is the largest first quarter measured since we began calculating quarterly flows in 2004. US-listed ETF assets are now almost $1.2 trillion, which is up
14% year to date.
The largest net cash inflows went into ETFs tracking fixed income indices. This asset class had net cash inflows of $16.4 billion in 1Q 2012, bringing total assets in Fixed Income ETFs to $203.9 billion (17% of US-listed ETF assets). Emerging Market equity ETFs rebounded from a weak 2011 ($2.1 billion in net outflows) to post the second highest net cash inflows at $11.4 billion in 1Q 2012. Currency ETFs had the largest net cash outflows at $1.4 billion, which is 30% of the segment’s assets as of 3/30/12.
Vanguard’s net cash inflows of $17.3 billion in 1Q 2012 were the largest of any provider. BlackRock had the next highest net cash inflows at $12.2 billion. As of 3/30/11, BlackRock, State Street and Vanguard accounted for over 78% of ETF assets.
There were 76 new ETFs launched and 16 liquidated in the US during 1Q 2012. Of note, BlackRock accounted for 35 of the new launches. As of 3/30/12, there were 34 issuers with 1,226 ETFs. Roughly $9 billion in the total market cap of ETFs is from ETFs issued over the past year. The most successful of these (by total market cap) provide exposure to US stocks exhibiting lower volatility over the prior year and to US dividend-paying stocks.
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Source: Morgan Stanley
SEC Seeks Comment on Investor Testing Regarding Target Date Retirement Funds
April 3, 201-- The Securities and Exchange Commission today said it is seeking comment on the results of investor testing regarding target date retirement funds. The Commission will consider the comments before acting on a proposal it issued in 2010 intended to enhance the information provided to individuals investing in such funds
That proposed rule would generally require target date retirement funds to more prominently disclose the fund's asset allocation at the target date. Under the proposal, the disclosure would have to be placed adjacent to the fund's name the first time the name appears in marketing materials. The proposal also would require marketing materials for target date retirement funds to include a table, chart, or graph depicting the fund's asset allocation over time.
view the Proposed Rule, Reopening of Comment Period
Source: SEC.gov
U.S. and Canadian Securities Regulators Discuss Closer Cooperation on Cross-Border Oversight
April 3, 2012--The Securities and Exchange Commission announced Tuesday that its senior staff met last week with counterparts at the Ontario Securities Commission (OSC) to discuss ways to further strengthen cooperation regarding their supervision of financial firms.
At the March 28 meeting, the agencies’ staffs discussed a variety of issues, including their respective approaches to examinations, investor education initiatives, and the status of regulatory reforms in each jurisdiction. The SEC and OSC staffs also discussed additional coordination in the oversight of dually regulated entities, and they agreed to meet regularly to discuss issues of mutual significance regarding supervisory coordination and emerging risks in the cross-border market.
The meeting is part of an effort detailed in a June 2010 memorandum of understanding concerning consultation, cooperation, and the exchange of information regarding the supervision of entities regulated both in the U.S. and Canada.
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Source: SEC.gov
Van Eck files with the SEC-Emerging Markets High Yield Bond ETF (HYEM)
April 3, 2012--Van Eck has filed a post-effective amendment, registration statement with the SEC for the Emerging Markets High Yield Bond ETF (HYEM).
view filing
Source: SEC.gov
DB Equity Research Equity Research-North America:Markets & ETFs : Low volumes: Is this all right?
April 3, 2012--What's behind this year's low trading volume?
The first quarter recorded one of the strongest Q1 equity markets in history (S&P 500, +12%); however volume remained at relatively low readings. Therefore many market participants may be wondering whether there is consistency between the bull market and volume, or not.
It’s all about volatility
To obtain a better understanding of the situation, we looked at the historical patterns for cash flows, volume, volatility, and the market, with special focus on ETPs. We found that volume is closely related to the volatility level. In general, we observed that volume soars around volatility peaks and declines on plunging volatility. Equity Cash Flows, on the other hand, present an inverse relationship with Volatility. Usually, inflows are experienced during declining volatility, while outflows are more common during rising volatility .
ETP Net Cash Flows have been strong this year
Overall ETP cash flows have been strong according to historical levels.
All ETPs, Equity ETPs, and Fixed Income ETPs recorded the highest inflows in record for a first quarter:
All ETPs: +$52.0bn (+101% YOY)
Equity ETPs: +$31.6bn (+90% YOY)
Fixed Income ETPs: +$17.1bn(+126% YOY)
ETP Short Interest has declined more than $35bn (-25%) since September ‘11
Equity ETP short interest dropped from last year’s peak of $139bn in Sep ’11 to $91bn at the end of Dec ‘11 and $94bn at the end of Jan ‘12. Short interest stood at $104bn as of Mar 15, 2012.
Current low Volume is driven by low volatility, not by lack of investors’ interest
The volume YOY change for the first quarter of the year was:
Total cash equities: -10.2%.
Tot. cash eq. (ex Equity ETPs): -10.4%
All ETPs: -13.0%.
Equity ETPs: -15.4%.
Volatility averaged 18.2% during the first quarter of 2012, which is below the daily average of 27.7% in the past 45 months.
Volume is highly correlated with the change (%) of monthly volatility peaks (e.g. Volume in Mar= f(VIX peak in Mar / VIX peak in Feb). Actually, Q1 volumes came around the projected values according to the volatility levels experienced during the same period.
For the record: Volume & Cash Flows tell different stories
Volume measures how much money is changing hands within the market, however cash flows measure how much money is coming in or going out of the market.
Volume is driven mostly by market sentiment or expectations (e.g. fear), while cash flows are driven mostly by fundamentals (e.g. positive surprises in economic or company earnings data).
to request report
Source: Deutsche Bank-Equity Research-North America
