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Security, liquidity overtake returns as German investors' top priority
November 1, 2010--Security and liquidity have become the chief concerns for German institutional investors, with returns now secondary, says Union Investment.
Additionally, the importance of environmental and reputational risk rose in the wake of the BP oil spill in the Gulf of Mexico, the company said.
As part of its annual risk management survey - which covers more than 80 institutions with EUR360bn in assets under management - Union found that only 7% of respondents saw returns as a priority, down from three years ago when almost four times as many saw returns as one of the driving factors.
State Street wins 10-year admin contract from NEST
November 1, 2010--The UK National Employment Savings Trust (NEST) has hired State Street as its fund administrator, awarding the company a 10-year contract.
Additionally, the scheme has announced details of a number of investment mandates it will tender later this week, including a passive global equity fund, as well as exposure to UK gilts.
99.9 Billion Euros Turned over at Deutsche Börse’s Cash Markets in October
N15.6 million trades executed on Xetra/ Total volume of 114.2 billion euros traded on all stock exchanges in Germany
ovember 1, 2010--: In October, 99.9 billion euros were traded on Xetra and on the floor at Börse Frankfurt – a decrease of 14 percent year-on-year (October 2009: 115.6 billion euros). Of the 99.9 billion euros, 93.5 billion euros were traded on Xetra, a decrease of 14 percent year-on-year (October 2009: 108 billion euros). 6.4 billion euros were traded on the floor, a decrease by 15 percent (October 2009: 7.5 billion euros).
Turnover in German equities on Deutsche Börse’s cash markets amounted to 80.7 billion euros, while foreign equities turnover stood at 3.2 billion euros. Xetra and the floor at Börse Frankfurt accounted for 98 percent of the transaction volume in German equities on all stock exchanges in Germany. 81 percent of foreign equities traded on stock exchanges in Germany were traded on Xetra and on the floor in Frankfurt.
In October, 15.6 million transactions were executed on Xetra, an increase of 5 percent against the same period last year (October 2009: 14.9 million).
According to the Xetra liquidity measure (XLM), Deutsche Telekom AG was the most liquid DAX blue chip in October with 9.74 basis points (bp) for an order volume of 100,000 euros. Deutsche Postbank AG was the most liquid MDAX stock with 4.22 bp. The most liquid ETF was DB X-TR.II-EONIA T.R. 1C with 0.32 bp. The most liquid foreign stock was Royal Dutch Shell with 13.04 bp. XLM measures liquidity in electronic securities trading on the basis of the implicit transaction costs. It is expressed in basis points (1 bp = 0.01 percent); a low XLM denotes high liquidity in a security.
Deutsche Bank AG was the DAX stock with the highest turnover on Xetra in October at 8 billion euros. Lanxess AG was the top MDAX stock at 518.3 million euros, while Balda AG led the SDAX stocks at 205.9 million euros and Aixtron AG headed the TecDAX at 716.9 million euros. At 1.3 billion euros, the iShares DAX was the exchange-traded fund with the highest turnover.
On all stock exchanges in Germany 114.2 billion euros were traded in October according to order book turnover statistics – a decrease of 12 percent compared year-on-year (October 2009: 130.1 billion euros).
Studie der Hochschule Konstanz auf Initiative von db x-trackers widerlegt Vorurteile gegenüber Short/Hebel-ETFs
November 1, 2010--In einer umfangreichen Studie hat die Hochschule Konstanz gezeigt, dass Privatanleger Short- und Hebel-ETFs in Deutschland sehr maßvoll einsetzen. „Die Ergebnisse legen nahe, dass Privatanleger in den überwiegenden Fällen wissen, welche Chancen und Risiken mit dem Einsatz von Short- und Hebel-ETFs verbunden sind“, sagt Leo Schubert, Professor für Betriebswirtschaftslehre in Konstanz, der die Studie geleitet hat. Schubert konnte erstmals Daten über Käufe und Verkäufe von Short- und Hebel-ETFs von der Mehrzahl der führenden Direktbanken in Deutschland auswerten. Zu den Teilnehmern der Studie, die von db x-trackers, dem ETF-Anbieter der Deutschen Bank, initiiert wurde, zählen die Mehrzahl der führenden deutschen Online-Brokerage-Institute. „Wir haben die Kritik ernst genommen, dass Short- und Hebel-ETFs nicht für Privatanleger geeignet seien.
Nun können wir erstmals zeigen, dass diese Produkte sehr wohl verstanden und risikobewusst eingesetzt werden“, sagt Thorsten Michalik, verantwortlich für db x-trackers. Insgesamt wurden 26.394 Käufe und anschließende Verkäufe von Short- und Hebel-ETFs zwischen dem 1.1.2008 und dem 1.4.2010 untersucht. In diesem Zeitraum handelten Privatanleger mit 39 verschiedene Short-und Hebel-ETFs von sechs ETF-Anbietern.
Die wichtigsten Ergebnisse im Einzelnen:
Haltedauer von Short/Hebel-ETFs ist meist kurz: Die im Rahmen der Studien untersuchten Short- und Hebel-ETF wurden überwiegend nur über einen begrenzten Zeitraum gehalten. Nach 15 Tagen waren bereits 50 Prozent, nach spätestens drei Monaten sogar schon 85 Prozent aller Engagements wieder beendet, „Wir haben seit Auflage unserer ersten Short- und Hebel-Produkte stets betont, dass diese sich vor allem zum kurzfristigen Einsatz eignen. Die Ergebnisse zeigen, dass dies auch so von Privatanlegern gesehen wird“, stellt Michalik klar.
Privatanleger schätzen Risiko realistisch ein: Auch die eingesetzte Summe bei Short oder Hebel-ETFs ist übersichtlich. 50 Prozent der privaten Investoren legten weniger als 5000 Euro an. Ein weiteres wichtiges Ergebnis der Studie ist, dass bei ETFs mit einem höheren Hebel deutlich weniger Kapital eingesetzt wird als bei nicht gehebelten Produkten. „Zudem nimmt das investierte Volumen auch mit zunehmender Haltedauer stetig ab“, fasst Professor Schubert zusammen. Alle Punkte sprechen für eine realistische Bewertung der eingegangenen Risiken durch die Anleger.
Extremwerte bei Renditen treten nur selten auf: Die Analyse der erzielten Renditen während der Haltedauer der Short- und Hebel-ETFs bestätigt den verantwortungsvollen Umgang von Privatanlegern mit diesen Produkten. In 90 Prozent aller untersuchten Fälle lagen die Renditen zwischen plus 20 und minus 22 Prozent nach Veräußerung des ETFs. Bemerkenswert ist, dass die Renditen bei ETFs mit Hebel weniger stark streuen als beim Short-ETF ohne Hebel. „Dieses Resultat ist überraschend, da die Hebelfunktion genau das Gegenteil erwarten ließ. Die deutlich verkürzten Haltedauern bei ETFs mit höherem Hebel scheinen hier ursächlich zu sein“, bemerkt Schubert. Zudem sprechen die Auswertungen dafür, dass Short-ETFs gezielt gekauft wurden, um Aktiengewinne abzusichern. Diese positiven Ergebnisse würden in diesem Fall Verluste mit Short-ETFs sogar noch ausgleichen.
Konzentration auf marktführende Produkte: Mehr als zwei Drittel der untersuchten Aktivitäten bezogen sich auf den Lyxor ETF LevDax, einen gehebelten ETF auf den Aktienindex Dax, sowie den db x-trackers ShortDax daily ETF, der die Wertentwicklung des DAX auf täglicher Basis invers abbildet. Diese ETFs sind mit einem Volumen von 213 Millionen beziehungsweise 586 Millionen Euro die größten Produkte in der jeweiligen Kategorie Hebel- und Short-ETFs (Stand 8. Oktober).
Die Ergebnisse der Studie belegen, dass der Markt für Short- und Hebel-ETFs für Privatanleger in Deutschland nicht mit dem entsprechenden Angebot in den USA verglichen werden kann. In den USA werden auch ETFs mit einem Hebel von bis zu vier angeboten, die auf ohnehin schon sehr volatilen Indizes basieren. Solche Produkte haben aufgrund ihrer hohen Preisausschläge viel Kritik auf sich gezogen. Die vorliegende Studie zeigt erwartungsgemäß, dass sich der Markt in Deutschland substantiell unterscheidet und von Anlegern auch realistisch eingeschätzt wird.
DB Global Equity Index & ETF Research : European Weekly ETP Review: Signs of better days ahead
October 29, 2010--Investment Outlook
As far as market rallies go, the week just passed continued to show positive signs of one materializing. At the very least, this is the case from a cash flow perspective, though asset prices seem to be following suit, at a slower pace. Though delicate it might be, ETF market indicators are pointing to a return of investors in the equity market, a move that is accompanied by shifting value themes within the asset class.
Four key indicators are causing us to conclude so:
Solid inflows consistently surpassing the indicative €1 billion mark for the third week in a row, a level that is commensurate with a bull ETF market.
Equity inflows, totaling over €4 billion in the last three weeks, characterized by solid directionality, reveal clear allocations in both a regional as well as a strategic themes.
Return of domestic European equity benchmarked allocations (Euro Stoxx 50, Stoxx 600 etc), following four months of drought, with over €2 billion since the beginning of September 2010.
Continued stalling gold inflows following the end of Q3’10, amounting to roughly €200 million for October 2010, compared to €500 million for September and €600 million in August.
The general market mood also continued to improve, with most of the major European equity indices gaining ground. The Euro Stoxx 50 index rose by 1.2%, the CAC 40 Index: was up by 1.1%, the DAX: index rose by 1.8% and the FTSE 100: was up by 0.7%. The Euro lost ground against the US dollar and fell by 0.16%, and gold (USD) saw a sizeable price drop of 2.9%. The demand in gold benchmarked ETFs is likely to be lagging due to shifting value themes in the equity market.
Following the Summer’s slow flow months, the ETF market is entering the last stretch of the year set to deliver strong growth. This is primarily driven by returning domestic equity investors as well as absence of significant outflows from one of the year’s biggest earners, gold ETFs.
Cash flow review
This week’s ETF cash flows totaled €1,232 million, slightly below those of last week’s. (€1,372 million). Asset class allocations favored equity, while fixed income experienced a moderate week and commodities experienced outflows, the first since the end of July 2010. Equity: inflows totaled €1,023 million (vs. €992 million inflow last week), fixed income received inflows of €342 million (vs. €344 million outflow last week) and commodities saw outflows of €121 million (vs. €17 million inflow in the previous week).
The overarching theme in the equity market is the return of investors to ETFs that track domestic European equity indices. Slightly over 50% of the week’s flows (€513 million) were allocated to European equity benchmarked ETFs for the week that ended on October 15 2010. This is the third consecutive week with significant European equity allocations. At the same time, cash flow allocations to emerging market (EM) benchmarked ETFs continued, albeit at a slightly slower pace than the preceding three weeks. Developed market (DM) investing is regaining its ground.
The big puzzle in the European market remains fixed income. While the European continent is traditionally a fixed income investor’s market, we have yet to see powerful and sophisticated investment themes – with the exception of €3.9 billion sovereign benchmarked ETF inflows during May and June – that compare to similar patterns in the US. Corporate bond benchmarked ETFs have received flows or just over €2 billion year to date.
While the ETF providers have been busy over the past year beefing up their fixed income product ranges with a number of more sophisticated products (such as short government, credit, sector) the vast majority of these products have not yet gathered assets that indicate that the market is embracing the asset class. The two notable exceptions have been sovereign and money market benchmarked ETFs.
Many theorize that market conditions have not been conducive for an uptick in fixed income ETF investing and should market conditions continue to improve, it will be interesting to see how investor adoption rates for fixed income ETFs might change. Gold products, which came to the European market long after fixed income, received €6.0 billion of inflows for 2010, while fixed income, excluding sovereign benchmarked ETFs, received a mere €2.4 billion for the same period.
The week that finished on October 15 2010 saw inflows of €342 million of fixed income inflows, with the largest beneficiary being money market ETFs (€146 million). Corporate bond benchmarked ETFs registered inflows of €92 million and sovereign benchmarked ETFs saw inflows of just €85 million.
New Product Launch and Listings Calendar
No new ETFs and ETCs were launched in Europe this week. However the continent’s cross-listing calendar experienced a very busy week with 59 new cross listings.
Switzerland benefited by most of the cross listing activity and it registered 49 newly cross listed ETFs. Deutsche Bank led the Swiss cross listing activity, by listing a broad spectrum of 24 sovereign, sector and credit benchmarked fixed income ETFs on the Swiss Stock Exchange. Amundi cross listed 24 of its ETFs on the same exchange, ranging from equity emerging market benchmarked ETFs as well as a variety of fixed income ETFs.
Lyxor cross listed 10 equity sector ETFs in France.
Rolling 30 day average turnover review
Total ETP turnover for the week rose by 0.9%, to €1.89 billion. Equity ETF turnover increased by 1.4% to €1.41 billion. Fixed Income ETF turnover: fell by 3.1`%, to €185 million. Commodity turnover rose by 2.2%, to €286 million.
Assets Under Management (AUM) roundup
The European ETP industry assets rose by 0.5% and finished the week at €212 billion. Equity market advances as well as healthy equity flows contributed to 0.8% increase of the European ETP AUM. However, the falling price of gold and lagging gold flows contributed a 0.4% fall. Fixed income with its marginal gains contributed 0.1% growth. Year to date, the European ETP AUM are up by a very healthy 24.6%, a growth that has primarily been trumpeted by strong inflows.
WSE sees huge demand ahead of IPO
October 29, 2010--Warsaw Stock Exchange (WSE) has raised more than 1bn zlotys (€300m) amid strong demand and set a debut price of 46 zlotys per share for institutional investors ahead of next month’s initial public offering.
The bourse said 323,000 retail investors subscribed for shares while demand was 25 times subscribed from institutional investors. Polish pension funds (OFE), Polish investment funds (TFI) as well as international investment funds, sovereign wealth funds and endowment funds all also subscribed for shares, the bourse added.
EU sticks to 20 per cent carbon cuts
October 29, 2010--The European Union on Friday gave notice it was not prepared to go beyond a planned 20-percent cut in greenhouse-gas emissions ahead of next month's UN climate talks in Cancun, Mexico.
At the end of a summit in Brussels, EU heads of state and government said making progress on tackling climate change "is becoming ever more urgent."
"It is therefore important that the Cancun Conference deliver a significant intermediate step" towards a comprehensive climate treaty, they said in a statement.
"The European Union," they added, "will reassess the situation after the Cancun Conference including the examination of options to move beyond 20 percent greenhouse gas emission reductions to be prepared to react to the ongoing international climate negotiations."
Many countries, one market
October 28, 2010--New rules for the EU's single market will make it easier to live and do business anywhere in Europe.
The single market is a cornerstone of the EU. It was set up so that people, goods, services and capital can move freely throughout the European Union.
But gaps remain between the rules and what businesses and people still face when they operate or move across borders. The commission has unveiled two sets of actions to help ensure the single market continues to improve people’s lives and make the EU economy more competitive.
The Single Market Act will simplify life for small businesses, which make up more than 99% of Europe’s companies and help fix the problems faced by people when they travel, study, work, get married, buy a house or car in another EU country.
The 50 actions on the single market include:
giving small businesses easier access to finance, simplifying accounting rules and improving access to public contracts
fostering social entrepreneurship to improve access to food, housing, health care, jobs and banking services
ensuring copyright holders, including artists, can sell their work throughout the EU to boost online commerce
cutting red tape in recognising all professional qualifications throughout the EU by introducing professional I.D. cards
STOXX introduces Equal Weighted version of European Benchmark Index
October 28, 2010--STOXX Limited, a global index provider and creator of the leading European equity indices, today announced the launch of the STOXX Europe 600 Equal Weighted Index, which represents the components of the well-known STOXX Europe 600 Index irrespective of their market capitalization by weighing them equally.
The new index is designed to underlie financial products such as exchange-traded funds (ETFs) or structured products.
“With the launch of the STOXX Europe 600 Equal Weighted Index we take a new weighting approach to Europe’s most widely recognized benchmark index,” said Hartmut Graf, chief executive officer, STOXX Ltd. “Our new index is a superior tool for market participants who seek exposure to an equal weighted portfolio consisting of European small, mid and large cap companies, while being able to rely on the transparent and rules-based methodology of the widely recognized STOXX Europe 600 Index.”
The STOXX Europe 600 Equal Weighted Index follows the same methodology as the STOXX Europe 600 Index, except for the weighting process. In the new index, all components share an equal weight, leading to a stronger exposure to small cap companies from 5% to 33%, while reducing the overall weight of large cap companies from 83% to 33%. As relative weights shift over time, the index is rebalanced quarterly and weights are brought back to equal allocations.
The STOXX Europe 600 Equal Weighted Index is reviewed simultaneously with the STOXX Europe 600 Index on a quarterly basis in March, June, September and December. It is available in price, net and gross return versions, and is calculated in Euro and U.S. Dollar (USD). Daily history is available back to December 31, 1991 for the price and net return versions, and back to December 31, 2000 for the gross return version.
Further information on the STOXX Europe 600 Equal Weighted Index is available on www.stoxx.com.
A new ETF by Lyxor begins trading on the Spanish Stock Exchange
The first SICAV-style ETF on the Spanish stock exchange
October 28, 2010--The Spanish stock exchange has begun trading the Lyxor ETFS&P500, a new exchange traded fund (ETF) issued by Lyxor Asset Management, Société Générale’s asset manager. This ETF, which tracks the S&P 500, is the first SICAV-style exchange-traded fund to be traded on the Spanish stock exchange following recent legal changes to allow trading in this investment product.
The ETF segment of the Spanish stock exchange started up on 20 July 2006 and after the incorporation of the Lyxor ETFS&P500 it now has 41 exchange-traded funds.
Trading volume in the ETF segment to the end of September was up 116% year-on-year, at €5.13 billion. The number of trades during the same period totalled 52,858, which exceeds total trades for all of 2009.
Exchange traded funds (ETFs) are a hybrid investment vehicle between funds and shares that combine the best of both worlds in a single stock exchange trade.
