Americas ETP News
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CFTC.gov Commitments of Traders Reports Update
February 13, 2015--The current reports for the week of February 10, 2015 are now available.
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Source: CFTC.gov
Recent Smart Beta ETF Launches by Category
February 13, 2015--One of the defining trends of ETF based investing has been the growth in 'smart beta' ETFs. Though we don't like the term (others sometimes refer to it as 'strategic beta'), this category of ETFs has rapidly grown in adoption.
In April 2014, in a guest post for S&P Dow Jones, we defined 'smart beta' and estimated the smart beta ETF space for US equity exposure to be ~ $75B, i.e. about 9% of the total ETF assets for domestic US equities at the time.
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Source: First Bridge
Deutsche Bank to Redeem Six Exchange Traded Notes
February 13, 2015--Deutsche Bank announced today that it has elected to redeem the following PowerShares DB exchange traded notes (ETNs):
PowerShares DB 3x Italian Treasury Bond Futures ETN (ticker: ITLT)
PowerShares DB Italian Treasury Bond Futures ETN (ticker: ITLY)
PowerShares DB US Inflation ETN (ticker: INFL)
PowerShares DB US Deflation ETN (ticker: DEFL)
PowerShares DB 3x Long US Dollar Index Futures ETN (ticker: UUPT)
PowerShares DB 3x Short US Dollar Index Futures ETN (ticker: UDNT)
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Source: Deutsche Asset & Wealth Management
Morningstar Reports U.S. Mutual Fund and ETF Asset Flows for January 2015
February 13, 2015-- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund (ETF) asset flows for January 2015.
With the exception of U.S. equity funds, all active Morningstar category groups had positive flows for the first month of the year, led by municipal-bond and sector-equity funds. Passive funds, with inflows of $26.1 billion, outpaced active funds, which took in $470 million in January, and taxable-bond funds led passive offerings with inflows of $10.9 billion.
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Source: Morningstar
Predicting the Next Wall Street Disaster
February 12, 2015--Wouldn't it be great if the U.S. had a heat map of the entire financial system that could alert it to vulnerabilities and approaching calamities before a global crisis struck?
While members of Congress squabble over a move in the House to erode provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a 64-year-old Wall Street veteran and MIT-trained economist named Richard Bookstaber is quietly working on an ambitious project that aims to do just that.
view the An Agent-based Model for Financial Vulnerability paper
Source: NewsWeek
The (Questionable) Legality of High-Speed "Pinging" and "Front Running" in the Futures Markets
February 12, 2015--Institutional investors complain that high-frequency trading (HFT) firms engage in high-speed "pinging" and "front running" of their orders for trades.
By sending out lightning fast "ping" orders for trades that operate much like sonar does in the ocean, HFT firms can detect when institutional investors will make large trades in futures contracts.
Once a large trade has been detected, an HFT firm rapidly jumps in front of the institutional investor, buying up the liquidity in the contract and selling it back at higher or lower prices (depending on if it was a buy or a sell order).
None other than Warren Buffett's right-hand man has called the HFT practice "evil" and "legalized front running." While many criticize these HFT tactics, they accept their legality at face value. But what if that understanding is incorrect?
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Source: Connecticut Law Review
CIBC's commission cut raises ETF market temperature
February 12, 2015--Here's a strong comment on the level of competition among bank-owned discount brokerages, and the rising importance of exchange-traded funds among investors: Canadian Imperial Bank of Commerce is waiving commissions on ETFs bought and sold online through its CIBC Investor's Edge brokerage.
Sure, the deal only lasts until the end of March, making it a six-week marketing strategy for capturing incoming RRSP funds rather than a bold new direction for ETF trading in Canada.
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Source: Globe and Mail
Charles Schwab says it seeks new CFO
February 12, 2015--Charles Schwab Corp is searching for a new chief financial officer to replace Joe Martinetto, who will switch to a different role later this year, Chief Executive Officer Walt Bettinger said Thursday.
Martinetto is likely to perform functions similar to a chief operating officer but will not assume that title, Bettinger said during the brokerage firm's midwinter business update for investors.
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Source: Reuters
Fidelity posts record profits for 2014
February 12, 2015--Fidelity Investments reported record profits for 2014, despite net outflows of $6bn, as one of the world's largest active fund managers lost market share to index trackers and niche rivals.
The US group said on Thursday that operating profits rose 29 per cent to $3.4bn, while revenues increased 9 per cent to $14.9bn. But it suffered big outflows as investors switched money into passively run funds.
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Source: FT.com
AdvisorShares Weekly Market Update: Strong Jobs & Volatile Energy; What Does It Mean?
February 12, 2015--For the week of February 2-February 6
Macro
The January jobs report came in at a strong 257,000 with the headline unemployment rate ticking up to 5.7%.
The unemployment rate went up because of the slight increase in the labor force participation rate to 62.9%. The broader U6 measure of unemployment printed at 11.3% which was a slight uptick from last month's 11.2%. There was also underlying strength in the report from average hourly earnings
which increased 0.5% although this may be attributable to an increased minimum wages is nine states. The November jobs
report was revised up to a gain of 423,000 jobs and December was revised up to 329,000.
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Source: AdvisorShares
