Americas ETP News
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BNY Mellon to Provide ETF Services for Six Market Vectors Funds
Technical Expertise to Help Transition from Merrill Lynch HOLDRS
January 18, 2012--BNY Mellon, the global leader in investment services, has been selected to provide exchange-traded fund (ETF) services, custody, fund accounting and securities lending for the six new Market Vector Industry ETFs which launched on December 20, 2011.
The six new ETFs were offered to existing investors in the corresponding six Merrill Lynch-sponsored HOLDRS through separate exchange offers. All six exchange offers were successful, and the HOLDRS were terminated. This exchange offered participating investors the opportunity for uninterrupted exposure to the target industries: oil services (OIH), semiconductors (SMH), pharmaceuticals (PPH), biotech (BBH), retail (RTH) and regional banks (RKH). The new ETFs, distributed by Van Eck Global, retained the corresponding HOLDRS' ticker symbols.
"The ETF structure provides a more dynamic, diversified investment vehicle as it better reflects changes in the composition of industry sectors that inevitably occur over time," said John Crimmins, vice president, portfolio administration, at Van Eck. "This was a unique transaction, and we are pleased that BNY Mellon had the expertise and depth of service required to assist investors who transitioned from the HOLDRS to the ETFs."
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Source: BNY Mellon
Testimony on "Examining the Impact of the Volcker Rule on Markets, Businesses, Investors and Job Creation" -by Mary L. Schapiro Chairman U.S. Securities and Exchange Commission
Before the Capital Markets and Government Sponsored Enterprises Subcommittee and Financial Institution and Consumer Credit Subcommittee of the U.S. House of Representatives Committee on Financial Services
January 18, 2012--Chairmen Garrett and Capito, Ranking Members Waters and Maloney, and members of the Subcommittees:
Thank you for the opportunity to testify regarding the Commission’s joint proposal with the Federal banking agencies to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(the “Dodd-Frank Act”), commonly referred to as the “Volcker Rule.”1
The proposal reflects a collective and extensive effort by the four agencies involved —the Board of Governors of the Federal Reserve System (“Board of Governors”), the Federal Deposit Insurance Corporation (“FDIC”), the Office of the Comptroller of the Currency (“OCC”), and the Securities and Exchange Commission (“the Commission” or “SEC”) — to design a rule, as mandated by the Dodd-Frank Act, to implement the required prohibitions and restrictions in a way that is consistent with the language and purpose of the statute. To create this proposal, staffs from each of the agencies, along with staff from the Commodity Futures Trading Commission (“CFTC”), engaged in weekly meetings under the leadership of the Department of the Treasury to discuss issues and share ideas related to effective implementation of the statute.
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Source: SEC
iShares files with the SEC-iShares MSCI United Kingdom Small Cap Index Fund
January 18, 2012--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares MSCI United Kingdom Small Cap Index Fund.
view filing
Source: SEC.gov
iShares files with the SEC-iShares MSCI Taiwan Small Cap Index Fund
January 18, 2012--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares MSCI Taiwan Small Cap Index Fund.
view filing
Source: SEC.gov
iShares files with the SEC-iShares MSCI South Korea Small Cap Index Fund
January 18, 2012--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares MSCI South Korea Small Cap Index Fund.
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Source: SEC.gov
iShares files with the SEC- iShares MSCI Singapore Small Cap Index Fund
January 18, 2012--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares MSCI Singapore Small Cap Index Fund.
view filing
Source: SEC.gov
iShares files with the SEC-iShares MSCI India Small Cap Index Fund
January 18, 2012--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares MSCI India Small Cap Index Fund.
view filing
Source: SEC.gov
iShares files with the SEC-iShares MSCI Norway Capped Investable Market Index Fund
January 18, 2012--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares MSCI Norway Capped Investable Market Index Fund.
view filing
Source: SEC.gov
BMO ETF Report: Strong Growth Predicted for Canadian ETF Market in 2012
January 17, 2012--Exchange Traded Funds (ETFs) continued their strong penetration and growth in Canada in 2011. We estimate the overall assets in the
industry grew by a further 13 percent in spite of continued market
volatility. With 2011 now in the books, the Canadian ETF industry has
recorded estimated compound annual growth rates (CAGRs) of 18.5 percent
over the last five years and 28.6 percent over the last 10. Moreover, the past year saw the number of ETF providers in Canada double from four to eight.
We expect 2012 will see more dramatic growth and change in the industry,
with stiffer competition, lowered fees, more product launches, consolidation,
and the potential for more regulatory influence.
What is it about ETFs that has continued to make them so popular with investors? Many point to their cost effectiveness, real-time transparency into underlying portfolios and investments, liquidity whenever markets are open and the efficient addition of many more investment opportunities and solutions than other products had ever done previously.
All of these benefits have allowed investors – from individual investors and investment advisors to institutional investors – to build more sophisticated portfolios with a far better balance between the “hoped for” returns versus the almost guaranteed risks and costs that accompany investments in almost any form.
However, we also see several other benefits that are not typically discussed.
These include:
Market de-segmentation: Most products appeal to a particular segment
or niche of investors. For instance, mutual funds are bought mostly by
individuals; large institutions like pensions and endowments invest in pooled
funds or in separate accounts that may be managed externally or internally;
banks and insurance companies, when they hedge their balance sheets,
create the appropriate structures themselves with physical stocks and bonds, or with derivatives; money managers (including investment advisors, mutual
fund managers, hedge fund managers, sovereign wealth funds, and others)
use physical stocks and bonds or derivatives in some form to create the
portfolios that they desire.
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Source: BMO Financial Group
DB Global Equity Research: US ETF Market Weekly Review: ETP market gets a head start with almost $12bn of inflows as the year kicks off
January 17, 2012--Net Cash Flows Review
The new-year equity market rally continued over the last week. The US (S&P 500) advanced by 0.9%. Other developed and emerging markets outside the US did alike; the MSCI EAFE (in USD) was up by 0.6%, while the MSCI EM (in USD) did even better, rising by 2.8% during the week.
Moving on to other asset classes, the 10Y Treasury yield dropped by 9bps last week, while the DB Liquid Commodity Index decreased by 1.12%. Other sectors were mixed. The Agriculture sector (DB Diversified Agriculture Index), Gold and Silver prices rose by 0.82%, 1.30%, and 3.26%, respectively; while the WTI Crude Oil price fell by 2.82%. Last but not least, Volatility (VIX) rose slightly by 1.36% during the same period.
The first two weeks of the year saw very strong inflows into Equity ($8.7bn) and Fixed Income ($3.2bn) ETPs. The total US ETP flows from all products registered $6.9bn of inflows during last week vs $4.9bn of inflows the previous week, setting the YTD weekly flows average at +$5.9bn.
ETF markets experienced positive flows across all major asset classes during last week. Equity, Fixed Income, and Commodity ETPs experienced flows of +$4.7bn, +$2.1bn, and +$0.2bn last week vs. +$4.0bn, +$1.2bn, and -$0.1bn the previous week, respectively.
Within Equity ETPs, US sector products experienced the largest inflows (+$2.0bn), followed by EM regional ETPs (+$1.1bn); while Small Cap vehicles experienced the largest outflows (-$0.4bn). Within Fixed Income ETPs, Corporate products experienced the largest inflows (+$1.5bn) followed by broad-benchmarked ETPs (+0.2bn). Within Commodity ETPs, flows were overall shy, with Energy products recording the largest inflows (+$0.1bn).
New Launch Calendar: it seems there is even more to explore…
There were 12 new ETFs listed on the NYSE Arca during the previous week. The new funds offer access to new segments of the international equity space, new volatility-related choices, active sector rotation implementation, and fixed income spread strategies.
Turnover Review: floor activity increased, but still dormant on New Year’s kick off
Total weekly turnover rose by 4.5% to $252bn vs. $241bn in the previous week, but is still 26% down from last year’s weekly average of $340bn. The largest increase was on Equity ETP turnover, which grew by $10.2bn or 5% to $219bn. Fixed Income ETP turnover followed with an increase of 3.6% (+$0.5bn); while Commodity ETP turnover declined by 3.1% (-$0.5bn).
Assets Under Management (AUM) Review: assets rally on markets and flows
Last week, total ETP assets increased by 1.7% to $1.08 trillion, driven by bullish markets and healthy inflows. Assets for equity, fixed income and commodity ETPs moved +$14.7bn, +$2.8bn, and +$0.9bn during last week, respectively. As of last Friday, total assets had grown by 3.5% or $37bn YTD.
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Source: Deutsche Bank - Global Equity Research
