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DB Global Equity Index & ETF Research : European Weekly ETP Review: Strong ETC product launch calendar as ETF investors continue to keep at bay
November 29, 2010--Investment Outlook: At crossroads, investors are pondering the next move
Following Ireland’s financial woes, ETF investors continued to stay out of the market for a second consecutive week, despite small gains in the equity market. The Euro Stoxx 50 index rose by 0.7%, the CAC 40 index: was up by 0.8%, the DAX: rose by 1.6% and the FTSE 100 was down 1.1%. The price of gold (USD/oz) continued to decline, losing 1.2%..
Similar to the prior week, inflows in the European ETF industry lagged well behind those observed in September and October of this year. Total European ETP inflows amounted to just €78 million, compared to €258 million of outflows in the previous week.
* Asset class investment patterns reflected the flat-lining trend that characterized overall ETP cash flows Equity ETFs netted outflow of €1 million vs. €115 million of inflows last week. Fixed Income registered outflows of €25 million, compared to €450 million outflow last week, primarily driven by sovereign benchmarked ETF outflows. Commodities netted inflows of €81 million, versus. €63 million inflow during previous week, primarily attributable to €106 million of gold inflows.
Product launch calendar: A busy week for ETCs
This week was especially busy with 19 new product launches and 2 share class cross-listings.
The new launch calendar was dominated by sixteen new currency ETCs issued by ETF Securities on the London Stock Exchange. The new currency products track a variety of currency pairs and they offer both long and short exposure.
Deutsche Bank launched two additional ETCs on LSE and Deutsche Boerse. The new products track a mean reversion benchmark, an index that is intended to reflect the performance of 12 commodities from 4 broad commodity sectors: energy, precious metals, base metals and agriculture. The weights of the commodities in the index are systematically adjusted depending on the relative richness or cheapness of the commodity.
UBS launched an MSCI Emerging Markets equity ETF on the Swiss Stock Exchange. Two additional share classes of the EM equity ETF were also cross listed on the same exchange
On-exchange ETP turnover: mild gains
Average rolling 22-day on-exchange turnover rose by 1.4% to €2.02 billion. This was supported by moderate rises in all major asset classes. Equity ETF turnover was up by 0.5% to €1.47 billion, fixed income ETF turnover rose by 4.7% to €218 million and commodity was up by 3.7% to €326 million
Assets Under Management (AUM)
The European ETP industry finished the week with €216.7 million, showing a decline of 0.3% from the previous week. The slight decline is attributable to slow weekly flows. Year to date, the European AUM are up by 27.7%.
Request a copy of the report
Source: DB Global Equity Index & ETF Research
CESR finds Member States broadly compliant with Prospectus Directive
November 29, 2010--CESR publishes today an executive summary (Ref. CESR/10-123) of a mapping on the actual use and application of the Prospectus Directive (herein referred to as the PD) in Member States.
The executive summary contains the key findings of the full report and gives a picture of the practices applied in Member States in relation to different organisational aspects and controls in place regarding prospectus controls. The mapping shows existing divergences in practices and in the day-to-day application.
view Executive summary of the Report Prospectus Directive Selective Mapping
Source: CESR
Turkish economy dissociates in a positive sense, Deloitte report says
November 29, 2010--The Turkish economy dissociated in a positive sense, a monthly report prepared by Deloitte Turkey said.
According to the report prepared by Deloitte's Economic Consultant Dr. Murat Üçer, the Turkish economy as well as many other developing economies dissociated themselves from other world economies based on their strong performance.
The most important matter for Turkey is how it will manage its successful economy in the future. Turkey must continue the economic momentum by continuing reforms. We believe that Turkey can reach figures of high growth by making reforms and strengthening its institutions.
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Source: Todays Zaman
Eurex Clearing Introduces New Pre-Trade Risk Limit Functionality
“Advanced Risk Protection” solution launched for Clearing and Trading Members/ Further expansion of Eurex Clearing’s industry leading real-time risk management tools
November 29, 2010--Today, Eurex Clearing, Europe’s leading clearing house for securities and derivatives transactions, launched its “Advanced Risk Protection” solution. The new service enables clearing members and non-clearing members to control their trading and operational risks by setting pre-trade limits on aggregate risk metrics such as the total margin requirement. All members can define the level of protection for themselves, and clearing members are able to set limits for their non-clearing members.
Up to three staggered limits are activated when the pre-defined risk metrics are breached. The risk checks are performed in real-time based on actual positions using real-time market prices.
“A reactive risk management approach is not sufficient to cope with the increasing speed in the trading environment. That’s why we give our customers the tools they need to proactively set risk limits in advance”, explained Thomas Book, member of the Eurex Executive Board responsible for clearing. “Our Advanced Risk Protection solution contributes to market safety and is our response to the market’s desire for powerful risk controls that are both latency-neutral and can easily be expressed in terms of real risk figures”, said Book.
The Advanced Risk Protection solution has been developed in close cooperation with market participants to ensure that the new limits are simple and effective to use. Members can configure different risk metrics such as total exposure, profit and loss, cash flow or market risk. These metrics are actual aggregated risk measures covering both futures and options positions and provide great flexibility to adequately reflect individual risk management practices and trading patterns. In addition, a member can specify which of three actions will be activated when a breach of each level or risk limits occurs. At the first level, an alert message is sent to the respective clearing member. In the second stage, the system automatically throttles orders and quotes. In the third level, the stop button functionality is automatically triggered, thus halting all trading activities.
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Source: Eurex
First iShares ETF on High-Yield Bonds Tradable on Xetra
November 26, 2010--Since Friday, a new exchange-traded bond index fund from the issuer iShares (BlackRock Inc.) has been tradable in Deutsche Börse’s XTF segment.
ETF name: iShares Markit iBoxx Euro High Yield
Asset class: bond index ETF
ISIN: DE000A1C8QT0
Total expense ratio 0.5 percent p.a.
Distribution policy: distributing
Benchmark: Markit iBoxx Euro Liquid High Yield Index
The iShares Markit iBoxx Euro High Yield gives investors the opportunity, for the first time, to invest in high-yield corporate bonds denominated in euros with issuers in or outside the euro zone. The bonds have a sub-investment grade rating. These bonds have a higher risk of default, but therefore pay higher yields. Only the largest and most liquid bonds with an amount outstanding of at least €250 million are included. The weighting per issuer is limited to 5 percent in the reference index.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 753 exchange-listed index funds, making it the largest offering of all European stock exchanges.
Source: Deutsche Börse:
Competition Policy and Growth:International experience and implications for the Russian Federation
November 26, 2010--Potential gains that can be realized through the introduction of a well designed competition framework also include greater consumer welfare and economic efficiency in form of lower prices, greater choice and variety of goods and services, innovation, reduced costs and better allocation of resources.
Empirical evidence shows strong correlation between higher GDP per capita and local markets where competition is more intense in most industries. Similarly, higher frequency of entry of new competitors into a local market is also associated with higher GDP per capita and, to some extent, with higher growth rates. Measures of mark-ups also indicate that low domestic competition translates into lower international price-competitiveness.
view Competition Policy
and Growth: International experience
and implications for the Russian Federation presentation
Source: World Bank
CESR invites expressions of interest in ESMA’s Securities and Markets Stakeholder Group by 23 December 2010
November 26, 2010--Pursuant to the draft European Parliament and Council Regulation establishing1 the European Securities and Markets Authority (ESMA), the Committee of European Securities Regulators (CESR) today launches a process to establish the Securities and Markets Stakeholder Group.
The Committee is therefore calling for expression of interest from potential stakeholders. This call is subject to the publication of the ESMA regulation in the Official Journal of the European Union.
This Call for interest is accompanied by an Application form and a CV template.
Interested parties should submit their applications by registered post or by email to stakeholders[at]cesr.eu by 23 December 2010.
Source: CESR
Goldman Sachs is a new ETF provider on Xetra
New hedge fund replication ETF tradable on Xetra
November 25, 2010--An ETF issued by Goldman Sachs Structured Investments II SICAV has been tradable on Xetra for the first time since Tuesday.
ETF Name: Goldman Sachs Absolute Return Tracker Index ETF Portfolio
Asset class: equity index ETF
ISIN: LU0529341090
Total expense ratio: 1.215 percent
Distribution policy: non-distributing
Benchmark: Goldman Sachs Absolute Return Tracker Index
The new ETF offers investors the opportunity to participate in the performance of the Goldman Sachs Absolute Return Tracker Index. The index reflects the return of a dynamic basket of long and short investable market factors determined by an algorithm to approximate patterns of hedge fund returns as a broad asset class.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 752 exchange-listed index funds, making it the largest offering of all European stock exchanges.
Source: Deutsche Börse
Trading Of 10 New ETFs By Deutsche Bank Begins On The Spanish Stock Exchange
The first ETFs issued by Deutsche Bank’s asset manager
November 25, 2010--The Spanish stock exchange has begun trading 10 new exchange traded funds (ETFs) issued by Deutsche Bank’s asset manager, DB X-Trackers, which will for the first time operate on this market following recent legal changes to allow trading in this investment product.
These issues bring the number of ETFs listed on the Spanish stock exchange to 53, thus significantly increasing the number of underlying assets available, with new European, US, Latin American and Asian equity indices.
It is worth mentioning the following indices as new underlying assets: the German DAX benchmark, the FTSE/Xinhua of China, the MSCI of Brazil and the MSCI Asia as well as the different indices of the DAX and the Euro Stoxx 50 families.
The ETF segment of the Spanish stock exchange started up on 20 July 2006 and since creation has provided both retail and institutional investors with a broad range of investment opportunities. 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.
Trading volume in the ETF segment to the end of October was up 107% year-on-year, at € 5.51 billion. The number of trades to October exceeded 56,000, up 33% from the same period in 2009.
Below is a list of the new ETFs listed on the Spanish stock exchange:
db x-trackers DJ STOXX 600 BANKS ETF
db x-trackers DJ EURO STOXX 50 SHORT DAILY ETF
db x-trackers FTSE/XINHUA CHINA 25 ETF
db x-trackers MSCI BRAZIL TRN INDEX ETF
db x-trackers MSCI EM Asia TRN INDEX ETF
db x-trackers MSCI EM LATAM TRN INDEX ETF
db x-trackers MSCI EMERGING MARKETS TRN INDEX ETF db x-trackers DAX ETF
db x-trackers SHORT DAX DAILY
db x-trackers S&P 500 ETF
Source: Bolsa de Madrid
Advances in private wealth management research to be highlighted at the EDHEC-Risk Institutional Days in Monaco on December 8-9
November 25, 2010--The EDHEC-Risk Institutional Days in Monaco on December 8 and 9, 2010, will this year be oriented towards themes that are of particular relevance for wealth management professionals. The Indexation and Passive Investment Conference on the first day of the event will be devoted to passive investment vehicles, which are increasingly used in private wealth management, and the second day will be dedicated to the transfer and adaptation of institutional investment techniques to private wealth management.
A special private wealth management seminar, “When Private Money is Managed like Institutional Money,” will be presented in consecutive sessions on the afternoon of December 9, beginning with a presentation on "State-of-the Art ALM and Risk Management for PWM" and followed by a session on "Sources of Added Value in Private Wealth Management" which draws from the "Private Asset-Liability Management" research chair at EDHEC-Risk Institute in partnership with Ortec Finance.
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Source: EDHEC
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