Americas ETP News
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ETF Research Center-Q1 2012 Earnings Reports-Week Three
May 7, 2012--HIGHLIGHTS:
With more than 80% of S&P500 firms reporting, overall index earnings likely grew by $15.5bn or 7.4% YoY to $24.81 per share. Tech (XLK),
Financials (XLF) and Industrials (XLI) were the biggest contributors to S&P profit growth
The same three sectors saw margin improvements versus a year ago, on about 5.0% sales growth overall. All other sectors were either flat or lower; Materials (XLB) and Utilities (XLU) were especially weak
Energy (XLE) sales surprised on the upside, but earnings came up short of expectations anyway. Meanwhile revenue for Utilities was well short of forecasts but profits managed to meet expectations
Energy has the lowest P/E ratio of any sector at 11.1x 2012E EPS vs. 13.2x for the S&P as a whole. Consumer Discretionary (XLY) has the highest, at 16.3x
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Source: AltaVista Research
Morgan Stanley-US ETF Weekly Update
May 7, 2012--US ETF Weekly Update
Weekly Flows: $1.6 Billion Net Outflows
ETF Assets Stand at $1.2 Trillion, up 11% YTD
One ETF Launch Last Week
Van Eck Reduces Expense Cap on Indonesia ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net outflows of $1.6 bln last week
Last week¡¦s net outflows were primarily driven by US Equity ETFs ($3.8 bln in aggregate)
ETF assets stand at $1.2 tln, up 11% YTD; ETFs have posted net inflows 14 out of 18 weeks YTD ($52.7 bln in net inflows)
13-week flows were mixed among asset classes; combined $22.7 bln net inflows
Fixed Income ETFs have consistently generated weekly net inflows (38 straight weeks of net inflows) and account for 66% of
the ETF net inflows over the past 13 weeks
US Small- & Micro-Cap ETFs exhibited net outflows of $2.9 bln, the most out of any category over the last 13 weeks
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares Barclays 1-3 Yr T-Bond Fund (SHY) generated net inflows of $633 mln last week, the most of any ETF
Four out of the top 10 ETFs to post the largest net inflows last week were Treasury oriented and seven out of 10 were fixed income
focused
Vanguard MSCI Emerging Markets ETF (VWO) has exhibited $2.9 bln in net inflows over the last 13 weeks, the most of any ETF
US-Listed ETFs: Short Interest
Data Unchanged: Based on data as of 4/13/12
SPDR S&P 500 ETF (SPY) posted the largest increase in USD short interest
Despite SPY’s sizeable increase in USD short interest, its short interest ratio (short interest divided by average daily traded
volume) declined from 2.03 to 1.75 as SPY’s ADTV increased from 133 mln shares to 159 mln shares
iShares Russell 2000 Index Fund (IWM) exhibited the largest decrease in USD short interest (lowest level since 1/31/11)
The average shares short/shares outstanding for ETFs is currently 5%
SPDR Retail ETF (XRT) is the most heavily shorted ETF as a % of shares outstanding (375%); the fund has seen a rise in shares short in each of the last three periods reported
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100%
US-Listed ETFs: Most Successful Recent Launches by Assets
Source: Bloomberg, Morgan Stanley Smith Barney Research. Data estimated as of 5/4/12 based on daily change in share counts and daily NAVs.
$7.8 billion in total market cap of ETFs less than 1-year old
Over the past 13 weeks, newly launched Fixed Income ETFs generated most net inflows at $799 mln
95 new ETF listings and 17 closures YTD; 42 of the ETFs launched YTD were issued by iShares
Over the past year, many of the successful launches have an income/dividend orientation
Six different ETF sponsors and three asset classes represented in top 10 most successful launches; six of the 10 focus on fixed
income securities
PIMCO Total Return ETF (BOND) continues to generate strong net inflows ($360 mln over past four weeks); notably, BOND
accounts for 63% of net inflows for newly launched ETFs over the past 4 weeks
Top 10 most successful launches account for 58% of market cap of ETFs launched over the past year
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Source: Morgan Stanley
Invesco PowerShares Celebrates 1 Year Anniversary of Fastest Growing ETF of 2011
May 7, 2012--Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs), today celebrates the one year anniversary of the PowerShares S&P 500® Low Volatility Portfolio (NYSE: SPLV) which has attracted the highest monthly inflows of all ETFs listed in 2011.
Listed on May 5, 2011, the PowerShares S&P 500 Low Volatility Portfolio (SPLV) represents the first volatility-weighted ETF available to US investors and currently has over $1.5 billion in AUM.
Since inception, the PowerShares S&P 500 Low Volatility Portfolio has outperformed the S&P 500 Index market-cap weighted benchmark while delivering lower volatility. For the one-year period ending May 5, 2012, SPLV achieved a total return of 11.57% based on NAV, significantly outperforming the S&P 500 Index which had a total return of 4.80% during the same period. (Note: total return figures include all dividends). Additionally, SPLV had a volatility of 16.14%, compared to 23.12% for the S&P 500 Index over the same period.1
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Source: Invesco PowerShares
Joint Statement on Regulation of OTC Derivatives Markets
May 7, 2012--The Securities and Exchange Commission today released the following joint statement with other regulators:
Leaders and senior representatives from key authorities with responsibility for the regulation of the over-the-counter (OTC) derivatives markets in their respective jurisdictions met on May 1, 2012 in Toronto.
The meeting was hosted by the Ontario Securities Commission and its Chair, Mr. Howard I. Wetston, Q.C.
The meeting included representatives from the Australian Securities and Investments Commission; Comissao de Valores Mobiliarios of Brazil; European Commission; European Securities and Markets Authority; Hong Kong Securities and Futures Commission; Japan Financial Services Agency; Ontario Securities Commission; l’Autorité des Marchés Financiers du Québec; Monetary Authority of Singapore; Swiss Financial Market Supervisory Authority; United States Commodity Futures Trading Commission; and United States Securities and Exchange Commission.
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Source: SEC.gov
U.S. Court Of Appeals For The Federal Circuit Unanimously Rules In ISE's Favor In Patent Infringement Case Against Chicago Board Options Exchange
May 7, 2012--The International Securities Exchange (ISE) announced today that the U.S. Court of Appeals for the Federal Circuit unanimously ruled in ISE's favor in the exchange's patent infringement case against the Chicago Board Options Exchange (CBOE).
This decision clears the way for the case to move back to the District Court where ISE will aggressively pursue its claims of patent infringement.
ISE originally brought the action against the CBOE in November 2006 for infringement of its primary patent, U.S. Patent No. 6,618,707, titled "Automated Exchange for Trading Derivative Securities." Among other aspects, this patent covers ISE’s trade matching algorithm.
Gary Katz, ISE’s President and CEO, said, "We are very gratified that the Appeals Court ruled unanimously in ISE’s favor. We will continue to vigorously pursue our ongoing effort to protect our patented technology as this case moves back to the trial judge for further consideration." ISE is represented in the litigation by Goodwin Procter LLP.
Source: International Securities Exchange (ISE)
Deutsche Bank - Equity Research - North America-US ETF+ Monthly Directory : April 2012 ETPs
April 7, 2012--This document includes all US listed exchange-traded funds (ETFs) and exchangetraded vehicles (ETVs), plus a special section covering exchange-traded notes (ETNs).
The directory is organized by asset class and asset-class-related sub sections. Within each sub section it has also been sorted. For Equity and Fixed Income ETPs it is sorted by country (or sub region for regional products) in alphabetical order and by AUM in descending order, and for the other ETP asset classes it is sorted by sub sector in alphabetical order and by AUM in descending order. A number of key information points per product has been included in order to enable the reader to get an overview in their respective area of interest. Among the key numeric information we include avg. daily turnover, assets under management, and cash flows (all in $US).
view US ETF+ Monthly Directory : April 2012 ETPs
Source: Deutsche Bank-Equity Research-North America
DB Equity Research Equity Research-US ETF Market Monthly Review : Market sell-off removes $23bn or 1.9% from ETP assets
May 7, 2012--Net Cash Flows Review
Last week, markets experienced a sell-off across the board. The US (S&P 500) plunged by 2.44%. Outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) dropped by 2.29% and 0.57%, respectively. Moving on to other asset classes, the 10Y Treasury yield retreated by 5bps last week, while the DB Liquid Commodity Index was down by 3.83%.
Other sectors followed suit. The Agriculture sector (DB Diversified Agriculture Index), the WTI Crude Oil, the Gold and the Silver prices fell by 1.26%, 6.14%, 1.23%, and 2.88%, respectively. Last but not least, Volatility (VIX) increased by 17.40% during the same period.
The total US ETP flows from all products registered $1.6bn of outflows during last week vs $7.3bn of inflows the previous week, setting the YTD weekly flows average at +$3.0bn (+$53.2bn YTD in total cash flows).
Equity, Fixed Income, and Commodity ETPs experienced flows of -$4.2bn, +$3.1bn, and -$0.5bn last week vs. +$5.7bn, +$1.7bn, and -$0.2bn the previous week, respectively.
Within Equity ETPs, Large Cap, Small Cap, and US sector products experienced the largest outflows (-$2.6bn, -$1.2bn, -$0.9bn, respectively); while dividend vehicles experienced the largest inflows (+$0.3bn). Within Fixed Income ETPs, Sovereign products recorded the largest inflows (+$1.8bn), followed by Corporates products (+$0.8bn). Within Commodity ETPs, Gold products experienced the largest outflows (-$0.6bn).
Top 3 ETPs & ETNs by inflows: SHY (+$0.6bn), IEI (+$0.6bn), UST (+$0.5bn)
Top 3 ETPs & ETNs by outflows: SPY (-$2.0bn), IWM (-$1.1bn), IVV (-$0.5bn))
New Launch Calendar: global inflation protection
There was one new ETF launched during the previous week. The product was listed on NYSE Arca. The new fixed income ETF employs an active strategy to offer access to global inflation protection by holding a basket of inflation-linked debt instruments.
Turnover Review: turnover pushed higher by rising volatility
Total weekly turnover increased by 4.2% to $284bn vs. $272bn in the previous week. Last week’s turnover level, however, is still 24% below last year’s weekly average. The largest increase was on Equity ETP turnover, which rose by $7.8bn or 3.2% to $252bn. Fixed Income and Commodity ETP turnover followed with increases of 26.5% ($3.2bn) and 4.3% ($0.6bn), respectively.
Assets Under Management (AUM) Review:
$23bn removed by the sell-off
Last week’s market sell-off removed $23bn or almost 2% from ETP assets. ETP AUM shrank by 1.9% to $1.17 trillion from the previous week’s level. YTD growth remains at two-digits with 11.7%. Assets for equity, fixed income and commodity ETPs moved -$23.9bn, +$3.2bn, and -$2.5bn during last week, respectively.
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Source: Deutsche Bank-Equity Research-North America
BNY Mellon ADR Index Monthly Performance Review is Now Available-April 2012
May 6, 2012--The BNY Mellon ADR Index Monthly Performance Review April 2012 is now available.
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Source: BNY Mellon
Crackdown on exotic ETFs moves forward
May 6, 2012--Efforts to keep nontraditional ETFs out of the hands of unsophisticated investors are heating up as regulators and an influential senator take aim at sales of the risky products.
Citigroup Global Markets Inc., Morgan Stanley, UBS Financial Services Inc. and Wells Fargo Advisors LLC last week agreed to pay $9.1 million to settle allegations that they sold leveraged and inverse exchange-traded funds to clients who had no business investing in the complex instruments.
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Source: Investment News
Two Years After Flash Crash, SEC Still Pursuing New Safeguards
May 5, 2012--This weekend marks the two-year anniversary of the aptly named flash crash. On May 6, 2010, starting at 2:42 in the afternoon, the Dow Jones Industrial Average plummeted nearly 600 points in just five minutes, only to recover most of that loss two minutes later.
A few large U.S. companies witnessed their stocks trading for as little as a penny a share before snapping back to near where they had been trading when the day began. What would be the second-biggest trading day for U.S. equity markets — 19.3 billion shares crossed the tape — left investors, regulators and most journalists scratching their heads.
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Source: Institutional Investor
