Global ETF News Older than One Year
UBS sets 50% limit on ETF securities lending
May 27, 2014--UBS is formally reducing securities lending on its ETF funds to 50%, following in the footsteps of ETF giant iShares.
Securities lending is a common practice for ETFs, which sees them lending out shares of underlying holdings to a third party for a price, with the aim to cover the expenses and management charges that may be a drag on the end return to an investor.
Source: Investment Week
DB-Synthetic Equity & Index Strategy-Global-Special ETF Research-Tactical Asset Allocation (TAA) insights from ETF flows
May 27, 2014--Introducing TAARSS: a novel relative strength indicator for TAA
We have created a proprietary relative strength indicator to implement Tactical Asset Allocation strategies by considering the magnitude and path of ETF flow trends.
ETF flows: a more powerful tool for predicting asset class performance
Most recently, the emergence of Exchange Traded Funds (ETFs) along with their growing popularity among both retail and institutional investors have brought about a new dimension to fund flow analysis. Moreover, ETFs both as products and industry have several distinct features that differentiate them from traditional mutual funds.
We believe it is this set of unique features what makes ETF flows a more powerful tool for predicting investor sentiment and asset class performance compared to mutual funds.
ETF flow trend path and magnitude provide stronger read for TAA
While most fund flow analysis metrics focus on the magnitude of the trend, we focus on both the path and the magnitude of it. Our analysis has shown that an ETF flow trend with steady and consistent path combined with a large flow magnitude is more likely to develop into future price performance momentum. We believe that this behavior is grounded on the fact that a large directional and steady ETF flow trend is an indication of an investment demand shift and hence should be accompanied by the corresponding price move. This behavior can be measured and used to identify the most attractive asset classes based on ETF flow trend relative strength.
TAARSS: a versatile indicator for implementing TAA strategies
Our Tactical Asset Allocation Relative Strength Signal (TAARSS) methodology is very versatile and can be implemented in multiple ways. In general, most of the implementation ideas would seek to take advantage of the relative strength of the asset classes as indicated by the signal. Investors can build core portfolios around it or they could use it for implementing tactical trades as satellite positions. Some examples of portfolio implementations are: direct rotation strategies, layered rotation strategies, and enhanced rotation strategies using levered ETFs. Tactical trades could also be implemented based on normalized TAARSS rankings.
TAARSS says overweight Fixed Income during Q2. Prefer Europe, especially Spain and Italy, within equities; and stay away from commodities in May
Our TAARSS rotation strategies say overweight fixed income during Q2. Within fixed income favor convertible bonds and Intl DM debt during May. Also for May, within equities prefer broad EM and Europe at a market and region levels, respectively; in the US prefer Large Caps, and in the DM outside the US favor Spain and Italy. Finally, within commodities stay in the sidelines in May. Overall, Spanish and Italian equities have the strongest TAARSS rankings for May.
Source: Deutsche Bank-Synthetic Equity & Index Strategy-Global
ETF Securities-Precious Metals Weekly-Platinum and Palladium Reach New 2014 Highs on Constrained Supplies
May 27, 2014--PGMs steal the spotlight. Platinum and palladium reached new 2014 highs while gold and
silver remained within increasingly constrained ranges. Platinum and palladium added
another 1.3% and 1.5% on the week for year-to-date gains of 9.3% and 15.6% respectively
supported by ongoing strikes in South Africa and by the Ukrainian crisis.
The platinum and palladium London fix highs last week were US $1,492/oz. and $859.5/oz. South African strikes continue to constrain PGM supplies. Despite the three largest miners in South Africa using the Labour Court to mediate the wage dispute with the Association of Mineworkers and Construction Union (AMCU), Impala’s CEO conceded that the strike may not end soon. The strike now enters into its 18th week, and has taken an approximate 890k oz. of platinum and 655 oz. of palladium out of production on our estimates. Even after the pay dispute in South Africa is resolved there will be a lag before production can be ramped up to full capacity, prolonging the delay in getting supply to the market. It is clear that sources of secondary supply, like scrap, are unable to catch up with primary production losses, keeping the market very tight.
Source: ETF Securities
ERI Scientific Beta unveils multi-factor smart beta indices
May 27, 2014--ERI Scientific Beta, the smart beta indexing initiative spun out off EDHEC-Risk Institute, a Paris-headquartered financial research centre, has announced the launch of the SciBeta Multi-Beta Multi-Strategy Indices.
The indices endeavour to address two potential limitations of market capitalization-weighted indices, namely ill-suited exposures to systematic risk factors and excessive concentration in a small number of stocks.
Source: etfstrategy.co.uk
ERI Scientific Beta launches multi-beta multi-strategy indices
May 27, 2014--ERI Scientific Beta has announced the launch of its Multi-Beta Multi-Strategy (MBMS) indices, which are now available on their platform.
Scientific Beta Multi-Beta Multi-Strategy indices address the two main limitations of cap-weighted indices, namely ill-suited exposures to systematic risk factors and excessive concentration in a small number of stocks.
Source: Financial Investor
MTS spans Atlantic with ETF initiative
May 26, 2014--London Stock Exchange Group's European electronic fixed income trading platform is bringing an exchange-traded fund initiative across the Atlantic.
MTS Group has been seeking to grow its presence in the US since late last year and this month completed its acquisition of US electronic trading platform Bonds.com.
Source: Financial News
'Closet indexers' face legal action from investors
May 25, 2014--Investors in the US and Europe are considering taking legal action against fund groups that have sold expensive active funds that do little more than track market performance.
The funds, known as "closet indexers", have drawn criticism from academics and passive fund providers for misleading investors into paying higher fees than they would have done in an index fund.
Source: FT.com
State securities officials issue warning about Bitcoin, digital currencies
May 23, 2014--The state's watchdog agency to protect investors has issued a warning Friday about the risks of investing in digital currencies, such as Bitcoin, Ripple or Litecoin.
The warning from the Maine Office of Securities cautions that virtual currencies are subject to minimal regulation, are not insured by the Federal Deposit Insurance Corporation and protection of that currency can depend on the strength of a person,s computer security systems and those of third-party "e-wallet" service providers.
Source: Insurancenewsnet.com
DECPG Weekly Economic Brief
May 23, 2014--Disappointing first quarter GDP growth in the U.S., Euro Area and China contrasted with soaring activity in Japan and a broadly stable momentum in the rest of developing countries. Additional policy accommodation by the European Central Bank (ECB) could have large
spillover effects for developing countries through trade, capital flow and foreign exchange channels. Metal prices remain soft, but Nickel
gained more than 45 percent in value since the start of 2014 due to a mineral export ban in Indonesia.
GDP growth estimates for the first quarter have so far been mixed, often due to idiosyncratic or temporary factors. In high income countries, exceptionally harsh weather conditions in the U.S. hurt investment and exports, leading to stagnating activity, while disappointing data in Italy, France (partly due to a VAT hike) and the Netherlands (driven by a sharp contraction in gas production) capped euro area growth to an unchanged 0.8 percent (annualized q-o-q). The conflict over Crimea and Eastern Ukraine also provoked a sharp decline in Russian and Ukrainian GDP, down 4 and 12 percent respectively. In contrast, growth doubled in Germany to 3.2 percent, more than tripled in Spain to 2.4 percent and reached a breathtaking 5.9 percent in Japan, as durable consumption soared in advance of a sales tax hike in April.
In China, an early Lunar New Year holiday contributed to a sluggish 5.8 percent growth performance in Q1 but recent data confirmed the slowdown, prompting authorities to ramp up infrastructure spending and extend tax breaks to SMEs. In the rest of East Asia, activity contracted in Thailand due to political unrest and slowed in Malaysia and Indonesia, where policy tightening and a mineral export ban cooled activity. GDP growth improved modestly in Mexico to 1.2 percent, while estimates based on industrial production and survey data point to recovering activity in Columbia, Argentina, India, Turkey and weak but stable growth in Brazil.
Source: World Bank
Stoxx Q2/2014 Quarterly Review
STOXX CHANGES COMPOSITION OF BENCHMARK INDICES
Results of the second regular quarterly review to be effective on June 23, 2014
May 27, 2014--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today announced the new composition of the STOXX Benchmark and their sub-and sector indices, among them the STOXX Europe 600 Index, STOXX North America 600 Index and STOXX Asia/Pacific 600 Index.
Effective as of the open of European markets on June 23, 2014, the following stocks will be added to and deleted from the STOXX Europe 600 Index and its respective size and sector indices:
Source: STOXX
