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Morgan Stanley-ETF Weekly Update
December 5, 2011--Weekly Flows: $6.8 Billion Net Inflows
ETF Assets Stand at $1.1 Trillion, up 6% YTD
Launches: 2 New ETFs
Direxion Makes Name and Objective Changes
US-Listed ETFs: Estimated Flows by Market Segment
ETFs rebounded last week and posted net inflows of $6.8 bln
Last week’s net inflows were led by US Large-Cap Equity ETFs (specifically led by SPY)
ETF assets stand at $1.1 tln, up 6% YTD as net inflows have offset challenging equity markets
13-week flows were mostly positive among asset classes; combined $38.9 bln net inflows
Fixed Income ETFs have exhibited the greatest net inflows over the past 13 weeks ($15.5 bln net inflows)
Over the past 13 weeks US Dividend ETFs have posted net inflows of $5.1 bln (17% of category market cap)
We estimate ETFs have generated net inflows 29 out of 48 weeks in 2011; $104.3 bln YTD
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $5.7 bln last week, the most of any ETF
The 5 Vanguard ETFs that exhibited large net outflows last week were the same 5 that exhibited similar size
net inflows the prior week
Over the past 13 weeks, amid very volatile markets, the SPDR Gold Trust (GLD) has generated net inflows of
$3.9 billion, the most of any ETF
US-Listed ETFs: Short Interest
Data Updated: Based on data as of 11/15/11
MDY exhibited the largest increase in USD short interest since last updated
$489 million in additional short interest
MDY’s shares short at highest level since 12/15/09
RTH’s shares short divided by shares outstanding in excess of 600%
Retail continues to be one of the most heavily shorted areas of the ETF market
Based on multiple borrowings and the ability to continuously create new shares, short interest as a % of
market cap can exceed 100%
US-Listed ETFs: Most Successful Recent Launches by Assets
$6.9 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 ($515 mln)
220 new ETF listings and 9 liquidations in 2011
Newly issued defensive portfolios have been successful in garnering assets
7 different ETF sponsors and 3 asset classes represented in top 10 most successful launches
Top 10 account for $3.3 bln in market cap and posted net inflows of $820 mln over last 13 weeks
request report
Source: Morgan Stanley
Teucrium files with the SEC
December 5, 2011-- Teucrium has filed a Amendment No. 1, Form S-1 registration statement with the SEC for the Teucrium Agricultural Fund.
view filing
Source: SEC.gov
EGA Emerging Global Shares files with the SEC
December 5, 2011--EGA Emerging Global Shares has filed a post-effective amendment, registration statement with the SEC for the EGA Emerging Global Shares Trust.
view filing
Source: SEC.gov
CFTC completes client-funds rule after MF Global collapse
December 5, 2011--U.S. derivatives regulators approved restrictions on how brokers can invest customer funds, acting on a delayed rule after as much as $1.2 billion went missing before MF Global Holdings Ltd. sought bankruptcy protection.
The Commodity Futures Trading Commission voted 5-0 today to limit how brokers invest clients’ margin in money market funds, and ban investments in foreign sovereign debt and in-house transactions such as repurchase agreements.
read more
Source: Washington Post
Remarks at a Conference Hosted by the Office of Financial Research and the Financial Stability Oversight Council
Chairman Gary Gensler
December 2, 2011--Good morning, I’d like to thank the Office of Financial Research (OFR) and the Financial Stability Oversight Council (FSOC) for hosting this important conference and for inviting me to speak.
Thank you, Tim, for the introduction.
Lessons of 2008
Three years ago, the financial system failed, and the financial regulatory system failed as well. We are still feeling the aftershocks of these twin failures.
There are many lessons to be learned from the crisis. Foremost, when financial institutions fail, real people’s lives are affected. More than eight million jobs were lost, and the unemployment rate remains stubbornly high. Millions of Americans lost their homes. Millions more live in homes that are worth less than their mortgages. And millions of Americans continue struggling to make ends meet.
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Source: CFTC.gov
CFTC Issues Interpretation Concerning Dodd-Frank Anti-Fraud Authority
December 2, 2011--The U.S. Commodity Futures Trading Commission (CFTC) today announced an Interpretation that relates to anti-fraud authority provided in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Today’s Interpretation is the CFTC’s view of the meaning of the term “actual delivery,” and guidance on how the CFTC will determine if the actual delivery exception applies to a transaction.
The Commission voted on the Interpretation, and will no longer consider this item during the open meeting on December 5. The Interpretation is open for public to comment for 60 days from publication in the Federal Register.
Section 742(a) of the Dodd-Frank Act amended the Commodity Exchange Act to add a new section, 2(c)(2)(D), entitled “Retail Commodity Transactions.” Section 2(c)(2)(D) broadly applies to any agreement, contract, or transaction in any commodity that is entered into with, or offered to, a non-eligible contract participant or non-eligible commercial entity on a leveraged, margined, or financed basis. The Section requires such agreements, contracts, and transactions to be conducted on a regulated exchange and subjects them to the CFTC’s anti-fraud authority. However, the Section does not apply if “actual delivery” of the commodity is made within 28 days. The Commission issued the Interpretation to explain its view of “actual delivery” and provide several examples of when “actual delivery” does and does not occur.
David Meister, the Director of the CFTC’s Division of Enforcement, stated, “In this Section of the Dodd-Frank Act, Congress provided the CFTC with added authority to prosecute ponzi schemes and other frauds that are perpetrated in the retail commodities markets, such as scams by people acting as legitimate providers of investments in precious metals like gold and silver. We will use this authority aggressively to protect investors and the markets.”
view the Retail Commodity Transactions Under Commodity Exchange Act Section 2(c)(2)(D)
Source: CFTC.gov
iShares files with the SEC
December 2, 2011--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares Asia/Pacific Dividend 30 Index Fund.
view filing
Source: SEC.gov
Fidelity files with the SEC
December 1, 2011--Fidelity has filed an application for exemptive relief with the SEC.
view filing
Source: SEC.gov
ISE Reports Business Activity for November 2011
December 1, 2011--ISE is the largest equity options exchange in November with market share of 19.7%, excluding dividend trades.
Dividend trades made up 4.9% of industry volume in November 2011.
The International Securities Exchange (ISE) today reported average daily volume of 2.8 million contracts in November 2011. This represents a decrease of 4.6% compared to November 2010. Total options volume for the month was 59.8 million contracts. ISE was the largest U.S. equity options exchange in November with market share of 19.7%*.
Business highlights for the month of November include:
On November 7, ISE announced it had completed the most the most recent upgrade to its new trading system based on Deutsche Börse Group’s OptimiseTM trading architecture. Technology Release 1.6 was the second major enhancement to the system since the completion of its initial rollout in July 2011.
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Source: International Securities Exchange (ISE)
Brazil takes measures to counter crisis
December 1, 2011--Brazil moved aggressively to shield its economy from a widening global financial crisis on Thursday, unveiling a slate of measures to boost consumption and investment in Latin America’s biggest country.
The announcement comes just one day after Brazil’s central bank cut interest rates for third straight time to shore up credit, citing mounting concerns about the impact of the eurozone debt crisis on the Brazilian economy
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Source: FIN24
