Global ETF News Older than One Year
Vanguard lands former iShares exec for Emea push
January 7, 2013--Vanguard Asset Management has hired the former head of product development for Europe, the Middle East and Africa from rival exchange-traded fund provider iShares, as it continues to ramp up its presence in the region.
The US fund manager, which has put pressure on competitors with its low-cost products, has named Axel Lomholt as head of European product development and management. The firm’s ETF business launched its first European ETFs in May.
Source: Financial News
January 7, 2013--US ETF Weekly Update
Weekly Flows: $16.7 Billion Net Inflows
ETF Assets Stand at $1.4 Trillion, up 3% YTD
We Estimate 2012 Net Inflows at $185.2 Billion
No ETF Launches Last Week
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $16.7 bln last week, the 7th consecutive week of net inflows
- Net inflows were led by US Large-Cap and Emerging Markets Equity ETFs, which posted combined net inflows of $11.1 bln
- Fixed Income ETFs have posted net outflows for four straight weeks, but posted net inflows of $8.0 bln over the last 13 weeks
ETF assets stand at $1.4 tln, up 3% YTD
We estimate 2012 ETF flows came in at $185.2 bln, eclipsing the previous high-water mark of $174.6 bln in 2007
13-week flows were mostly positive among asset classes; combined $63.3 bln net inflows
International Equity ETFs have exhibited net inflows of $29.4 bln over the past 13 weeks
Over the last 13 weeks, Leveraged/Inverse ETFs posted the largest net outflows of any category ($1.1 bln); most of the Leveraged/Inverse ETFs to post the largest net outflows were inverse (-1x, -2x, -3x) oriented
US-Listed ETFs: Estimated Largest Flows by Individual ETF
The SPDR S&P 500 ETF (SPY) posted net inflows of $5.2 bln last week, the most of any ETF
SPY has now posted net inflows for seven consecutive weeks, totaling $25.7 bln; SPY’s market cap of $132 bln is $61 bln more than the next largest fund and would currently rank as the 19th largest constituent in the S&P 500 Index
The ProShares Ultra Russell2000 (UWM) generated net inflows of $666 mln, or 82% of its current market cap, last week; interestingly, the iShares Russell 2000 Index Fund (IWM), based on the same index, posted net inflows of $2.4 bln last week
The iShares Barclays 3-7 Year Treasury Bond Fund (IEI) exhibited net outflows of $1.0 bln last week, the most of any ETF; in our view, the recent weakness in fixed income flows, while still early to tell, may potentially be signaling the beginning of a shift from fixed income to equity
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 12/14/12
SPDR S&P 500 ETF (SPY) had the largest increase in USD short interest at $759 mln
Despite the climb in short interest last period, SPY’s shares short remain 14% below their 52-week average
Aggregate ETF USD short interest increased by $1.2 bln over the past two weeks ended 12/14/12
The average shares short/shares outstanding for ETFs is currently 5.1%
Smaller ETFs by market cap may skew results (three of the top 10 with the highest % of shares short have market caps <$5 mln)
Retail ETFs consistently are some of the most heavily shorted ETFs (shares short as a % of shares outstanding)
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only eight ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
Source: Bloomberg, Morgan Stanley Smith Barney Research.
Data estimated as of 1/4/13 based on daily change in share counts and daily NAVs.
$9.1 billion in total market cap of ETFs less than 1-year old
Newly launched Active ETFs account for 49% of the market cap of ETFs launched over the past year; PIMCO Total Return ETF (BOND) is the largest actively managed ETF with a market cap of $3.9 bln
155 new ETF listings and 82 closures in 2012 (already 16 announced closures for 2013); lowest number of launches since 2009 and the highest number of yearly closures
The top 10 most successful launches make up 70% of the market cap of ETFs launched over the past year
Five different ETF sponsors and two asset classes represented in top 10 most successful launches
The SPDR Barclays Short Term High Yield Bond ETF (SJNK) posted net inflows of $46 mln last week, the most of any recently launched ETF; SJNK has been one of the most successful new launches over the past year as investors have flocked to yield
products, while simultaneously exhibiting interest rate risk concerns
Source: Morgan Stanley
Global ETF and ETP assets reach a new high of nearly $2 trillion ($1.95 trillion) at the end of 2012
January 7, 2013--Global assets invested in Exchange Traded Funds (ETFs)and Exchange Traded Products (ETPs) hit an all-time high of nearly $2 trillion ($1.95 trillion) at the end of 2012.
ETF and ETP assets have increased by 27.6% from $1.53 trillion to $1.95 trillion during 2012, according to figures from ETFGI’s monthly Global ETF and ETP industry insights.
The 10 year compounded annual growth rate (CAGR) of global ETF and ETP assets at the end of 2012 was 29.6%. There are currently 4,731 ETFs and ETPs with 9,710 listings, assets of $1.95 trillion, from 208 providers on 56 exchanges.
iShares is the largest ETF/ETP provider in terms of assets with $760 billion, reflecting 39.0% market share; SPDR ETFs is second with $337 billion and 17.3% market share, followed by Vanguard with $246 billion and 12.6% market share. These top three ETF/ETP providers, out of 208, account for $1.34 billion or 68.9% of global ETF/ETP assets, while the remaining 205 providers each have less than 4% market share.
The top 3 providers of ETFs/ETPs accounted for $179.5 billion, or 67.6%, of all net new assets gathered in 2012. iShares gathered the largest net new ETF and ETP inflows in 2012 with $87 billion, followed by Vanguard with $54.2 billion and SPDR ETFs with $38.3 billion net inflows. All three gathered significantly more net new assets in 2012 than in 2011.
Source: ETFGI
ETF Securities-ETFS Precious Metals Weekly-Precious metal prices decline as FOMC comments outweigh US fiscal cliff optimism
January 7, 2013--Gold hits two week low after release of FOMC minutes. The release of the minutes of the December FOMC meeting last week triggered a sell-off of US Treasury bonds and gold on concerns that the Fed's bond purchase program could end sooner than expected.
The market's reaction in selling gold seems exaggerated because the statement accompanied a further expansion of monetary policy and also indicated that there are downside risks to growth. With other central banks also continuing to flood financial markets with cheap liquidity (ECB, Bank of Japan, and potentially more from the Bank of England with a new governor in 2013), global monetary policy continues to be supportive of gold in particular.
Currency debasement by the US and major developed economies is likely to continue until their long-term structural debt issues are resolved. This process could take years and will likely involve reducing real debt burdens through higher inflation. Therefore, while cyclical growth pick-ups may cause short-term pauses in debasement policies and the gold price rally, until real debt burdens are reduced, gold should remain in a structural bull market.
Precious metals 'fiscal cliff' rally overshadowed by FOMC minutes. Precious metals staged an early 2013 rally following the fiscal cliff deal but could not hold the gains after the FOMC minutes were released. Concerns over US debt levels are likely to remain in focus as negotiations will now switch to the US debt ceiling issues which must be resolved in the coming weeks in order to avoid a debt default by the US government. Gold rallied by 28% in July and August 2011 as deliberations over the debt ceiling at the time faltered.
Visit www.etfsecurities.com for more info.
Source: ETF Securities
Basel Committee releases revised version of Basel III's Liquidity Coverage Ratio
January 7, 2013--The Basel Committee has issued the full text of the revised Liquidity Coverage Ratio (LCR) following endorsement on 6 January 2013 by its governing body-the Group of Central Bank Governors and Heads of Supervision (GHOS).
The LCR is an essential component of the Basel III reforms, which are global regulatory standards on bank capital adequacy and liquidity endorsed by the G20 Leaders.
The LCR is one of the Basel Committee's key reforms to strengthen global capital and liquidity regulations with the goal of promoting a more resilient banking sector. The LCR promotes the short-term resilience of a bank's liquidity risk profile. It does this by ensuring that a bank has an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted into cash easily and immediately in private markets to meet its liquidity needs for a 30 calendar day liquidity stress scenario. It will improve the banking sector's ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy.
Source: BIS
Old Mutual begins hiring for asset drive
January 6, 2013--Julian Ide, chief executive of Old Mutual Global Investors, hopes to double the size of the group's assets of €13bn within three years, as part of a plan to improve profitability and regroup from setbacks its parent company endured in 2012.
Mr Ide told FTfm that Old Mutual Global Investors, owned by Old Mutual, was looking to “become more profitable while continuing to deliver positive investment returns”.
Source: FT.com
Custodian banks balk at AIFM rules
January 6, 2013--Any hopes that the final version of the Alternative Investment Fund Managers Directive would be kinder to custodian banks were dashed in the final days of last year.
The European Commission’s “level 2” measures, published on December 19, made it clear that custodian banks will indeed be liable for lost assets held in their custody. To avoid liability, depositories will have to show that the loss was caused by an event outside its control and that it had taken all possible precautions to protect the asset. The directive also bans depositories from delegating their liability risks to sub-custodians.
In addition to the strict liability rule, which effectively makes depositories responsible for mistakes and fraud across the sector, they will also have to monitor all cash movements of clients’ assets – they must know where trillions of dollars of client monies are at any given time.
view moreSource: FT.com
Group of Governors and Heads of Supervision endorses revised liquidity standard for banks
January 6, 2013--The Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, met today to consider the Basel Committee's amendments to the Liquidity Coverage Ratio (LCR) as a minimum standard.
It unanimously endorsed them. Today's agreement is a clear commitment to ensure that banks hold sufficient liquid assets to prevent central banks becoming the "lender of first resort".
The GHOS also endorsed a new Charter for the Committee, and discussed the Committee's medium-term work agenda.
Source: BIS
FTSE China A50 Index-linked ETFs hit US$10 Billion AUM
January 4, 2013--FTSE Group ("FTSE"), the award winning global index provider, is proud to announce that the combined assets of FTSE China A50 Index linked ETFs have surpassed $US10 billion
FTSE reveals the combined assets of FTSE China A50 Index linked ETFs have gone past $US10bn. This milestone underlines FTSE’s position in the China ETF marketplace, with a majority of the assets under management (AUM) in China-themed ETFs listed globally – more than 58% - benchmarked to FTSE indices.
The AUM of FTSE China A50 Index linked ETFs, including the iShares FTSE A50 China ETF and CSOP FTSE China A50 ETF, both listed on the Stock Exchange of Hong Kong, went past the record US$10bn level over the holiday period. The index represents the 50 largest A-Share companies, offering the optimal balance between representativeness and tradability for China’s A Share market.
Source: FTSE
Cliff Bounce: Russell Global Indexes Reflected Positive Returns on First Trading Day of 2013 for the Global Equity Markets
January 4, 2013--European equity markets showed positive returns on Wednesday, January 2nd 2013 as reflected by the Russell Eurozone Index, the day after U.S. Congress passed a resolution to avert the so-called "fiscal cliff."
The Russell Eurozone Index reflected a daily return of 2.4%, led by country constituents Greece (3.8%), Finland (3.8%) and Italy (3.6%).
Other world equity markets also performed strongly Wednesday, with positive returns for the Russell U.S. large-cap Russell 1000® Index, U.S. small-cap Russell 2000® Index, Russell Greater China Index and Russell Emerging Markets Index. This follows positive returns for these indexes in 2012.
Source: Russell Investments
