Global ETF News Older than One Year
Nasdaq error shows need for unified rules
Markets deal well with outages but unified response is needed
August 23, 2013--It has not been a good week to be a computer.
First, a computer error at Everbright Securities was blamed for a $3.8bn flood of orders on the Shanghai market. Then Goldman Sachs unleashed a rogue algorithm that caused chaos through the options market. And the coup de grâce came when a technical glitch caused Nasdaq to shut for more than three hours.
Source: FT.com
SSgA-US ETF Snapshot:July 2013
August 23, 2013--STATE STREET GLOBAL ADVISORS HIGHLIGHTS, JULY 2013
After The Dust Settles: What's Next for Fixed Income?
o With abnormally low yields over the last few years, investors have been on high alert to the potential impact that an unpleasant end to a 30-plus year bull-run in bonds could have on their portfolios. With US 10-Year Treasury yields rising over 80bps since the end of April, many investors are now feeling the pain. While other asset classes may offer greater potential for risk-adjusted returns in today's market, fixed income can and should remain core to investment portfolios due to its potential for income generation, diversification and capital preservation.
Fortunately, there are opportunities available for savvy investors to create resilient portfolios regardless of how far and fast rates may rise over the rest of the year.
GLOBAL ETF LISTING REGION
The United States had over $42.3BN of inflows in the month of July, increasing its year to date inflows to $114.0BN. Europe experienced inflows of $3.2BN in July, increasing its year to date inflows to $7.1BN. APAC and Canada had minor outflows.
GLOBAL PERFORMANCE BY ASSET CLASS
MSCI AC World IMI increased 4.9%, while MSCI EAFE gained 5.3%. Emerging markets returned 1.0%, while,Emerging Markets Small Cap gained 0.3%. US Large Cap, Mid Cap and Small Cap markets were all positive, returning 5.1%, 6.2% and 6.8%, respectively. The Global Aggregate increased 1.3% and the Global Treasury Ex US added 1.9%. The US High Yield, the US Aggregate and the US Corporate Bond markets were all positive in July. The US REIT market was up 0.8%. Commodities were positive, with the Dow Jones-UBS Commodity Index gaining 1.4% and Gold jumping 10.3%
GLOBAL ETF FLOWS BY ASSET CLASS
Global ETF flows topped $45BN in July. Equity had a leading $41.3BN of inflows. The equity inflows were driven by the developed large cap equity category, which had $18.8BN in inflows. The Commodity asset class had outflows of $2.8BN, most of which came from Precious Metals. Precious Metals has $30.7BN in outflows YTD.
ETF Manager & Fund Detail
The top three families in the Global ETF marketplace were: BlackRock, State Street Global Advisors and Vanguard. Collectively, they account for approximately 71% of the Global ETF market.
visit www.spdrs.com for complete report
Source: SSgA
EPFR Global News Release-Thaw continues for Europe funds but US Equity Funds see biggest outflow since 2Q08
August 23, 2013--With the yield on 10-year US Treasuries making a run at the 3% level in anticipation of the beginning of the end for the Federal Reserve's QE3 program, investors pulled nearly $20 billion out of EPFR Global-tracked US Equity and Bond Funds during the third week of August.
Expectations that the Fed will start winding down its bond buying program at some point in the next two months also kept the pressure on Emerging Markets Bond and Equity Funds while redemptions from US Financial Sector Funds climbed to their highest level since late 1Q09.
Although the outflows from US Equity Funds were the highest in over five years, the overall figure of $12.3 billion for all Equity Funds was tempered by another week of solid inflows for Europe Equity Funds as macroeconomic data continues to illustrate the rebound in that region’s economy.
Visit www.epfr.com for more info.
Source: EPFR
GreySpark Partners-The Global Regulatory Landscape 2013
August 22, 2013--GreySpark Partners present a report exploring the emerging global regulatory landscape, taking an international view of what are often regional requirements. The report, titled The Global Regulatory Landscape 2013: Five Key Regulatory Initiatives Impacting Global Wholesale Finance, is part of the Market Structure and Regulations stream of research
Abstract The report provides an informed and comparative analysis of regulations, both current and emerging, in nine territories: Australia, Brazil, Canada, the EU, Hong Kong, India, Japan, Singapore and the US. Regulatory activities in these territories were chosen for their relevance to the global financial regulatory landscape. Within these territories, there are five systemically important regulatory mandates that are explored in the report: financial transactions tax, the US Foreign Account Tax Compliance Act (FATCA), the EU’s Markets in Financial Instruments Directive and European Market Infrastructure Regulation, the US’s Dodd-Frank Act (DFA) and the Basel III accords.
Collectively, these regulatory changes create an environment characterised by uncertainty, mismatched objectives and extensive opportunities to misinterpret requirements. As a result of these concerns, three scenarios are points of interest for both regulators and market participants: regulatory avoidance, substituted compliance and regulatory exemptions.
Regulators have sought to determine all potential opportunities for regulatory avoidance and have included measures to close these loopholes. The most prominent regulatory actions are those that require intergovernmental cooperation to ensure compliance; the wide uptake of intergovernmental agreements (IGAs) highlights the desire for cooperation. It is increasingly apparent that regulatory avoidance can only take place beyond the jurisdiction of the US, the EU and the G20 in areas where there is a distinct lack of legal and regulatory momentum makes for an unattractive business and trading environment, thus discouraging moving trading activity to such regions.
Source: GreySpark Partners
S&P Dow Jones Indices Adds Two All Metals Sector Indices to the S&P GSCI Family
August 22, 2013--S&P Dow Jones Indices announced today the launch of the S&P GSCI(R) All Metals 3 Month Forward and S&P GSCI All Metals 3 Month Forward Capped Component. These Indices are designed to measure the precious and industrial metal commodity markets while seeking to reduce negative roll yield in times of contango.
"These indices provide global market participants with investible benchmarks across both the precious metal and industrial metal commodity markets," says Jodie Gunzberg, Vice President at S&P Dow Jones Indices. "The indices combine the safe haven characteristics of precious metals with the economically sensitive characteristics of industrial metals."
Source: MarketWatch
IMF Working paper-Capital Flows are Fickle: Anytime, Anywhere
August 22, 2013--Summary: Has the unprecedented financial globalization of recent years changed the behavior of capital flows across countries? Using a newly constructed database of gross and net capital flows since 1980 for a sample of nearly 150 countries, this paper finds that private capital flows are typically volatile for all countries, advanced or emerging, across all points in time.
This holds true across most types of flows, including bank, portfolio debt, and equity flows. Advanced economies enjoy a greater substitutability between types of inflows, and complementarity between gross inflows and outflows, than do emerging markets, which reduces the volatility of their total net inflows despite higher volatility of the components. Capital flows also exhibit low persistence, across all economies and across most types of flows, Inflows tend to rise temporarily when global financing conditions are relatively easy. These findings suggest that fickle capital flows are an unavoidable fact of life to which policymakers across all countries need to continue to manage and adapt.
view the IMF Working paper-Capital Flows are Fickle: Anytime, Anywhere
Source: IMF
Basel III, Volcker Rule Could Crimp ETF Business, Too: Analyst
August 21, 2013--How much inventory in stocks and bonds- i.e, how much risk-should brokers and market makers be allowed to carry on their books?
This question, part of the last few years' regulatory debates, turns out to matter for the fast-growing exchange-traded fund industry. That’s the notion this morning over at Credit Suisse (CS), where a review of BlackRock's (BLK) ETF business by analysts Craig Siegenthaler, Mark Deluzio and Giuliano Mina includes some caution over how liquid ETFs can be if market making firms face new restrictions.
Source: Barron's
Issuance plummets as EM pain intensifies
August 20, 2013--Developing world debt and equity issuance has contracted sharply this summer as investor concerns over the end of US quantitative easing have severely rattled emerging markets.
Companies and governments in emerging markets have issued $42.4bn of debt since the beginning of June, compared with $95.1bn during the whole of June, July and August last year, according to Dealogic data.
Source: FT.com
Does last week's rise in top gold ETF holding signify turn around?
August 20, 2013--Last week the SPDR Gold ETF recorded a 9 tonne increase in its gold holdings- the first increase in over 9 months, is this a sign that gold has bottomed?
While not too much should yet be read into a small rise in the SPDR gold ETF’s holdings last week, the very fact that this represents the first weekly rise for around 9 months is giving the gold bulls some heart after a dire couple of months. Whether it yet indicates a reversal of the recent trend which has seen the ETF’s gold holdings fall from over 1300 tonnes of gold down to a little over 900 tonnes will require several more weeks, or months of rises to confirm. Last week’s rise was from 909 tonnes to 915 tonnes, although the holding appears to have fallen again, but by only just under two tonnes, so far this week, coinciding with the gold price appearing to have run into a temporary wall.
Source: MineWeb
Mirae-EM Equity Markets Rebounded, Though Sentiment Remains Cautious
Valuations across global equity markets remain attractive relative to long-term historic averages.
August 20, 2013--China: China's economic indicators have been mixed
The Chinese market experienced a mild rebound in July, climbing 4%, but it has yet to reflect a meaningful pickup as sentiment remains depressed due to disappointing economic data and the lack of policy action.
On the economic front, HSBC manufacturing PMI came in at 47.7, the third consecutive monthly drop and the lowest reading in 11months. Additionally, June’s industrial output growth of 8.9% YoY lagged expectations for a 9.1% increase, and trade data remains weak.
Meanwhile, second quarter GDP growth slowed to 7.5% YoY, again igniting concerns over a hard landing. While slowing growth disappointed the market, Premier Li Keqiang’s comments that 7% is the bottom line for tolerance of an economic slowdown provided some reassurance.
India: Concerns about the higher rates on India's growth prospects weigh on market sentiment.
The Indian market finished flat in July, but was volatile during the month on the back of macroeconomic issues, including slowing growth, higher-than-expected inflation, and persistent deficits.
The Indian economy remains under pressure. HSBC manufacturing PMI fell to 50.1 in July, while the latest reading of industrial production showed a decline. At the same time, inflation has begun to accelerate again, while the rupee has continued to weaken. In mid-July, the central bank raised the Marginal Standing Facility (MSF) Rate and the Bank Rate both by 200 basis points to 10.25%. Additionally, the RBI capped the amount banks can borrow at the policy interest rate, all in an effort to tighten liquidity and defend the rupee. However, the central bank held the key lending rate steady.
ASEAN: Singapore and Philippines outperformed the rest of ASEAN countries.
In Singapore, inflation inched up to 1.8% YoY in June. On the economic front, HSBC manufacturing PMI climbed to the highest level since April 2011. Meanwhile, second quarter GDP came up from just 0.2% in the first quarter, on the back of strong manufacturing and construction activity.
After increasing to 2.8% in June, inflation in the Philippines declined to 2.5% YoY in July. Unlike some of its ASEAN neighbors, macroeconomic indicators and earnings results remain resilient in the Philippines; however, the demanding valuation level has pushed market volatility higher. In Malaysia, inflation held steady at 1.8% YoY in June, while other data reflected a slowdown in growth. Meanwhile, Fitch revised its outlook for Malaysia’s sovereign debt from stable to negative, citing increased federal government debt, and a widening budget deficit, which increased to 4.7%.
Latin America: Sentiment is expected to remain weak given the numerous challenges to Brazil's economy.
The Brazilian market fell again in U.S. dollar terms during July, with the MSCI Brazil Index losing 1.5%; however, the Bovespa Index returned 1.6% in local currency terms.
A material slowdown in the domestic economy and stubbornly high inflation have resulted in earnings downgrades across the consumer, financials and industrials sectors. Meanwhile, stocks with greater links to the global economy have been hampered by falling commodity prices and decelerating Chinese growth.
On the domestic front, there is growing debate over the health of the Brazilian consumer. Consumer sectors have materially outperformed in recent years based on structural growth trends; however, household leverage and debt servicing requirements are at new highs.
EMEA: Russian market rebounded in line with oil and commodity prices.
The MSCI Russia Index gained 3.7% in July, outperforming emerging markets. The market was lifted by rising oil prices and the rebound of a natural gas producer, as well as optimism that the new central bank governor will pursue market-friendly policies.
On a sector basis, most sectors were positive, led by energy and telecom services. On the other hand, materials significantly underperformed as a major fertilizer company announced that it was leaving a pricing cartel and is willing to sell at significantly lower prices.
Source: Mirae Asset Financial Group
