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Strong Start to 2010 with $400mn of ETC Inflows Globally, New Records in Precious Metal Holdings as Gold Hits All Time High in Euro Terms
$400mn of global net inflows YTD
Global physical palladium holdings reach 1.1mn ounces, a world record
February 17, 2010--ETF Securities (ETFS), the global pioneer in Exchange Traded Commodities (Commodity ETCs), 3rd generation Exchange Traded Funds (ETFs) and Exchange Traded Currencies (Currency ETCs) has seen a strong start to 2010, with $400mn of net inflows across precious metals, energy and agriculture over the first 6 weeks of the year.
ETFS long oil ETCs saw $49mn of inflows last week, taking inflows over the past four weeks to $143mn (equivalent to $79mn and $208mn respectively in effective inflows, allowing for the double exposure of leveraged oil ETCs). These inflows have coincided with a drop in spot oil prices towards $70/barrel. These flows contrast with strong inflows into ETFS Short Crude Oil (SOIL) seen at the start of 2010 as spot prices breached the $80/barrel mark. This switch in investor positioning suggests some investors are taking active tactical trading following range-bound trading in spot oil prices recently.
With regards to agricultural commodity ETCs, investor interest in grains continues, with YTD inflows into ETFS Wheat (WEAT) and ETFS Corn (CORN) making up 2 of the top 10 performers so far this year. WEAT has seen $26mn of inflows in the first six weeks of 2010, a quarter of the entire yearly inflows over 2009. ETFS Grains (AIGG) underperformed ETFS Softs (AIGS) by 46 percentage points in 2009, led by a 26% drop in WEAT. Recent inflows could represent some investor expectations of a catchup in wheat prices compared to other agriculture prices in 2010 after near record harvests across most major Northern Hemisphere exporters weighed on wheat prices in 2009.
NASDAQ OMX Group Announces Majority Ownership in Agora-X
February 16, 2010--The
NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and Agora-X, LLC today announced
that NASDAQ OMX bought a majority interest in Agora-X, an electronic
communications network for institutional trading in over-the-counter
(OTC) commodity contracts. The transaction gives NASDAQ OMX an 85
percent equity interest in Agora-X, up from its previous 20 percent
ownership, effective immediately. Financial terms were not disclosed.
"As the global leader in providing exchange technology and trading
efficiencies, we believe that by expanding our partnership and
investment in Agora-X, NASDAQ OMX can bring OTC commodity traders'
market efficiencies, cost savings, transparency and liquidity, as we
have brought these advantages to the equity markets for years. This
investment is also a strategic expansion within our broader global
commodities business," commented Hans-Ole Jochumsen, Executive Vice
President, NASDAQ OMX Transaction Services Nordics.
"We are very excited with the expanded relationship between Agora-X and NASDAQ OMX. We've worked with NASDAQ OMX to create the technology for a best-in-class electronic marketplace, and now with their majority interest, it allows for us to take advantage of immense synergies and access to all of the NASDAQ OMX resources," said Brent M. Weisenborn, Chief Executive Officer of Agora-X. "The Agora-X platform makes a dramatic difference in price discovery by enabling traders to obtain best prices in a more open, liquid and transparent electronic marketplace. Displaying bids and offers for derivative contracts on Agora-X, rather than negotiating transactions through time-consuming phone calls or instant messages, saves traders time and money."
Agora-X enables institutional market participants to efficiently negotiate OTC transactions in commodity and derivative contracts, including through bilateral negotiation. As previously announced, Agora-X offers automatic clearing through CME ClearPort(R) on certain OTC derivatives along with an electronic audit trail on all transactions.
As a result of the investment, Agora-X will become a part of NASDAQ OMX
Commodities business. Brent M. Weisenborn will report to Geir Reigstad,
Head of NASDAQ OMX Commodities. The NASDAQ OMX Commodities business
provides access to the world's largest power derivatives exchange and
one of Europe's major carbon markets, together with Nord Pool ASA.
FCStone Group, Inc., a commodity risk management firm, previously held
the majority ownership position in Agora-X and will continue to hold a
minority stake.
Doomsday regulation scenario laid out
February 16, 2010--The biggest banks will see their profitability fall by nearly two-thirds next year under a doomsday scenario to be outlined in research published on Wednesday .
Analysts at JPMorgan have calculated that if the full burden of regulatory and political initiatives to crack down on banks’ risks is implemented, it would cut the average return on equity from a projected 13.3 per cent to 5.4 per cent.
Pressure mounts on corporate responsibility reporting
February 15, 2010--A coalition of global investors from 13 countries with over $2.1trn (€1.5trn) of assets is calling for better corporate reporting on environmental, social and corporate governance (ESG) activities.
The international investor coalition is writing to 86 major companies urging them to honour the reporting requirements of the UN’s corporate responsibility Global Compact initiative. Each of the 86 laggard companies previously joined the initiative but failed to produce the mandatory annual report on how it puts the initiative’s ten principles into action.
ETF Landscape: Industry Review - Year End 2009
February 15, 2010--Global ETF assets break through US$1 trillion milestone at the end of 2009
At the end of December 2009 the global ETF industry assets exceeded US$1 trillion with 1,947 ETFs and 3,787 listings from 110 providers on 40 exchanges around the world.
Morningstar Reports U.S. Mutual Fund and ETF Asset Flows Through January 2010
February 12, 2010--Morningstar, Inc., a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through January 2010. Mutual funds saw inflows of $44.5 billion in January. Domestic-stock funds gathered $2.7 billion in assets, reversing four consecutive months of outflows, while international-equity funds took in more than $8.1 billion—the biggest monthly inflow for the asset class since December 2007.
Meanwhile, bond funds continued to dominate all other asset classes, with investors adding $28.0 billion to fixed-income funds during the month. Following strong inflows in 2009, U.S. ETF flows dipped into the red to kick off 2010, with $16.7 billion in net outflows in January. Although industry assets fell to $746.9 billion, a 4.8% decline from December, total net assets for ETFs grew 49.2% on a year-over-year basis.
Additional highlights from the report on mutual funds:
Based on total net assets, fixed-income funds now represent approximately 30% of the mutual fund market, up from 19% at the end of 2007.
Despite significant outflows from several Fidelity large-cap funds in January, the firm registered net inflows of nearly $1.6 billion. On the heels of a positive January and coming off inflows of nearly $16.2 billion in 2009, Fidelity has not come close to making up 2008's outflow of $37.3 billion.
Although active funds still dominate the mutual fund market, passive strategies have increased their market share to 20%, up from 11% at the beginning of 2000.
American Funds experienced outflows for the seventh straight month, but the pace of the firm's outflows has slowed. Davis Funds and Selected Funds, both run by Davis Advisors, saw outflows again last month, a trend the firm has experienced since late 2008. Ivy Funds had a strong month, paced by $709.2 million in inflows to Ivy Asset Strategy.
Additional highlights from the report on ETFs:
SPDRs SPY, whose massive size and heavy trading activity tends to skew ETF flow data, had more than $15.1 billion in outflows in January.
International-stock ETFs took in $888.2 million in net assets in January, led by Vanguard Emerging Markets VWO, which saw $894.0 million in net inflows. iShares Barclays TIPS Bond TIP had inflows of $674.1 million in January, as investors poured more than $1.9 billion into taxable-bond ETFs.
Over the past year, Vanguard's ETF assets have more than doubled, and the firm's ETF market share has grown to about 12.4% from 8.5% a year ago.
view the Morningstar DirectSM Fund Flows Update
ETF Landscape: Industry Highlights - Data as at End January 2010
February 12, 2010--Global ETF and ETP Industry January 2010:
• At the end of January 2010 the global ETF industry had 2,053 ETFs with 3,928 listings, assets of US$984.0 Bn, from 113 providers on 40 exchanges around the world.
Assets
• YTD assets have fallen by 5.0% which is more than the 4.2% fall in the MSCI World Index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 5.4% with 106 new ETFs launched.
• The number of ETFs listed in Europe has surpassed the US, with 896 ETFs listed in Europe, compared to 791 in the US.
• There are currently plans to launch 820 new ETFs.
Trading volume
• YTD the average daily trading volume in US dollars increased by 40.6% to US$70.7 Bn or 3.3 Bn shares.
ETF providers
• Globally, iShares is the largest ETF provider in terms of both number of products, 434 ETFs, and assets of US$470.0 Bn, reflecting 47.8% market share; State Street Global Advisors is second with 107 products and US$139.1 Bn, 14.1% market share; followed by Vanguard with 47 products and assets of US$92.2 Bn and 9.4% market share at the end of January 2010.
ETFs & ETPs
• Combined, there were 2,673 products with 4,839 listings, assets of US$1,132.7 Bn from 137 providers on 43 exchanges around the world.
European ETF and ETP Industry January 2010:
At the end of January 2010 the European ETF industry had 896 ETFs with 2,468 listings, assets of US$217.9 Bn, from 34 providers on 18 exchanges.
Assets
• YTD assets have fallen by 4.0%, which is less than the 5.9% fall in the MSCI Europe Index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 8.1% with 67 new ETFs launched.
• 11 April 2010 will mark the tenth anniversary of ETFs in Europe.
Trading volume
• YTD the average daily trading volume in US dollars increased by 24.5% to US$2.8 Bn. Most ETF trades are not required to be reported in Europe as ETFs are not covered by the European Union directive on markets in financial instruments (MiFID).
ETF providers
• iShares is the largest ETF provider in terms of both number of products, 172 ETFs, and assets of US$82.5 Bn, reflecting 37.9% market share; Lyxor Asset Management is second with 127 products and US$43.8 Bn, 20.1% market share; followed by db x-trackers with 118 ETFs and assets of US$35.8 Bn and 16.4% market share at the end of January 2010.
ETFs & ETPs
• Combined, there were 1,072 products with assets of US$233.1 Bn from 36 providers on 18 exchanges in Europe.
United States ETF and ETP Industry January 2010:
At the end of January 2010 the US ETF industry had 791 ETFs, assets of US$665.4 Bn, from 28 providers on two exchanges.
Assets
• YTD assets have fallen by 5.7%, which is more than the 3.6% fall in the MSCI US index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 2.5% with 19 new ETFs launched.
• 29 January 2010 marked the 17th anniversary of ETFs in the US.
Trading volume
• YTD the average daily trading volume in US dollars has increased by 43.2% to US$65.6 Bn.
ETF providers
• iShares is the largest ETF provider in terms of both number of products, 197 ETFs, and assets of US$349.5 Bn, reflecting 52.5% market share; State Street Global Advisors is second with 88 products and US$128.2 Bn, a 19.3% market share; followed by Vanguard with 46 products, assets of US$92.2 Bn and 13.8% market share at the end of January 2010.
ETFs & ETPs
• Combined, there were 935 products with assets of US$750.1 Bn from 41 providers on two exchanges in the US.
Canada ETF and ETP Industry January 2010:
At the end of January 2010 the Canadian ETF industry had 125 ETFs, assets of US$28.4 Bn, from four providers on one exchange.
Assets
• YTD assets have fallen by 0.5%, which is less than the 7.8% fall in the MSCI Canada Index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 14.7% with 16 new ETFs launched.
Trading volume
• YTD the average daily trading volume in US dollars has increased by 1.6% to US$0.97 Bn.
ETF providers
• iShares is the largest ETF provider in terms of assets with US$22.6 Bn in 36 ETFs, reflecting 79.7% market share; Claymore Securities is second with 26 products and US$3.3 Bn, an 11.5% market share; followed by BetaPro Management with 41 products, assets of US$2.3 Bn and 8.1% market share at the end of January 2010.
Asia Pacific ex-Japan ETF and ETP Industry January 2010:
At the end of January 2010 the Asia Pacific ex-Japan ETF industry had 133 ETFs with 215 listings, and assets of US$36.9 Bn from 47 providers on 13 exchanges.
Assets
• YTD assets have fallen by 4.3%, which is less than the 6.4% fall in the MSCI AC Asia Pacific ex-Japan index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 3.1% with four new ETFs launched.
Trading volume
• YTD the average daily trading volume in US dollars has increased by 1.4% to US$0.90 Bn.
ETF providers
• State Street Global Advisors is the largest ETF provider in terms of assets with US$9.6 Bn, in six ETFs, reflecting 26.0% market share; iShares is second with 13 products and US$7.1 Bn, a 19.2% market share; followed by Hang Seng Investment Management with three products, assets of US$5.5 Bn and 14.8% market share at the end of January 2010.
ETFs & ETPs
• Combined, there were 145 products with 229 listings, and assets of US$39.3 Bn from 50 providers on 13 exchanges.
Japan ETF and ETP Industry January 2010:
At the end of January 2010 the Japanese ETF industry had 68 ETFs with assets of US$24.2 Bn from six providers on two exchanges.
Assets
• YTD assets have fallen by 1.6%, compared to an increase of 1.3% in the MSCI Japan Index in US dollar terms.
ETFs
• YTD the number of ETFs remains unchanged with 68 ETFs.
Trading volume
• YTD the average daily trading volume in US dollars has increased by 12.2% to US$0.17 Bn.
ETF providers
• Nomura Asset Management is the largest ETF provider in terms of assets with US$13.5 Bn, in 30 ETFs, reflecting 55.7% market share; Nikko Asset Management is second with 10 products and US$5.4 Bn, a 22.4% market share; followed by Daiwa Asset Management with 22 products, assets of US$4.7 Bn and 19.4% market share at the end of January 2010.
ETFs & ETPs
• Combined, there were 73 products with 82 listings, and assets of US$24.5 Bn from six providers on two exchanges.
Financial Select Sector SPDR Fund to be rebalanced
February 11, 2010-State Street Global Advisors is rebalancing the Financial Select Sector SPDR Fund on 12 February to reflect the addition of Berkshire Hathaway to its underlying index.
Berkshire Hathaway will become a component security of the index for the fund on or about 16 February.
No changes are being made to the fund’s investment objectives or ticker symbol.
To facilitate an orderly rebalancing for the fund, the list of securities applicable to all purchase and redemption orders placed on 12 February will be based on post-rebalance index holdings instead of index holdings as of the close of business on 11 February.
State Street Global Advisors is the investment management business of State Street Corporation.
Dow Jones Joins CME Group In Financial Index Venture
Formal Structure Ensures Integrity and Independence of Dow Jones Industrial Average
February 10, 2010--Dow Jones & Company and CME Group announced an agreement to form a joint venture to operate a global financial index services business.
The definitive agreement provides for CME Group to own 90% of the venture to which Dow Jones will contribute its Dow Jones Indexes business valued at $675 million.
Dow Jones will hold the remaining 10% and retain a key role in the management of the Dow Jones Industrial Average. CME Group will contribute a business which provides certain market data services valued at $607.5 million to the joint venture. The new joint venture will also raise approximately $613 million in third-party debt which will be used to pay a $607.5 million distribution to Dow Jones.
“A venture with CME Group provides advantages the index business needs to grow and prosper,” said Les Hinton, chief executive officer of Dow Jones. “This affords Dow Jones the opportunity to tighten its focus on its news and business information products while preserving and protecting an iconic business brand.”
Taken together, the distribution received from the joint venture with CME Group and the previously announced sale of the company’s interest in STOXX Ltd. represent nearly $1 billion in proceeds to Dow Jones.
Terms of the agreement provide for the joint venture to license the Dow Jones name for the financial-index business on a long-term basis. Ownership of the Dow Jones brand, including trademarked names, remains with Dow Jones.
A formal structure will ensure the integrity and independence of Dow Jones index products. For example, the managing editor of The Wall Street Journal will continue to share in decisions regarding the composition and application of the Dow Jones Industrial Average.
“The Dow Jones Industrial Average was created more than a century ago by the editors of The Wall Street Journal as a convenient and accurate measure of stock-market performance. This agreement perpetuates that purpose for the Journal and for investors world-wide,” said Robert Thomson, managing editor of the Journal.
Earlier this year, Dow Jones announced a new organizational structure combining its two major divisions into a single business unit serving both enterprises and consumers. This transaction with CME Group and the sale of the company’s interest in STOXX further concentrate Dow Jones’s scope around core news and information products such as the Journal, Dow Jones Newswires, Barron’s, MarketWatch and Dow Jones Factiva.
This transaction, which is subject to regulatory approvals and other customary closing conditions, is scheduled for completion in the 2010 first quarter.
Created in 1896 by Charles Dow, one of the founders of Dow Jones, the Dow Jones Industrial Average originally had 12 stocks, including a leather maker, a steel provider and a sugar producer. The industrial average was first published in the Journal on May 26, 1896, but wasn’t regularly featured in the paper until October of that year. The Dow Jones Industrial Average became a household name after the stock market crash of 1929 when people beyond Wall Street began taking an active interest in the status of the market.
The first index from Dow Jones debuted in 1884 at a time when railroads dominated the economy. That predecessor of what is today the Dow Jones Transportation Average was originally named the Dow Jones Railroad Average.
Dow Jones first commercialized its indexes in 1997. Those initial licensing efforts led to the creation of the Dow Jones Indexes business.
Deutsche Bank and NASDAQ OMX Introduce the DB NASDAQ OMX Clean Tech Index
February 10, 2010--DB Climate Change Advisors
(DBCCA), the climate change investment and research business of Deutsche Bank's Asset Management business, and The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced the introduction of the DB NASDAQ
OMX(R) Clean Tech Index (DBCC).
The index is an accurate, real-time
representation of the global clean technology sector with exposure to clean energy, energy efficiency, transport, waste management and water companies. This is the first clean technology index co-branded by a
global exchange company and a global bank.
The index is comprised of 119 companies identified by DBCCA from a global universe of ~4,000, each with at least a third of revenues derived from clean technology within investable geographies and exchanges identified by NASDAQ OMX. Of these, 106 companies have over 50% in clean tech revenues, using only demonstrated revenue from filed financial statements. Constituent companies must have market capitalization of $250 million and over $1 million average daily dollar trading volume. The index is equal-weighted to offer greater exposure to smaller-cap companies.
"Climate change has already, and we believe will continue to deliver as an attractive source of alpha - which is one of the reasons why we saw the need to provide investors with a comprehensive, global and accurate benchmark for the sector," said Kevin Parker, Global Head of Deutsche Bank's Asset Management division (DeAM) and a member of Deutsche Bank's Group Executive Committee. "Through this collaboration, we are able to offer investors an index that combines the best of DBCCA's clean tech investment expertise and thought leadership with NASDAQ OMX's globally trusted index design and calculation services."
"This index demonstrates the commitment of two global innovators to provide investors greater insight into companies that are driving the clean technology industry," said NASDAQ OMX Executive Vice President John Jacobs. NASDAQ OMX looks forward to continuing to work with Deutsche Bank. Together, we offer investors a unique combination of trusted leadership, expertise and services."
In addition to a price return index, a total return version is also
calculated (DBCT).
The DB NASDAQ OMX Clean Tech Index is calculated in real-time and commenced calculation today with a value of 1,000.00. The index provides complete transparency about screening methods, selection
criteria, securities, and sector mapping. For more information including a list of component companies, visit http://www.dbcca.com.
