Americas ETP News
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Buy Side Takes Issue With Maker-Taker Pricing
May 14, 2014--Maker-taker pricing is a sore point for some buy-side market participants, who believe it distorts market behavior to their detriment. The system, by which liquidity providers are paid a rebate by exchange and liquidity takers pay a fee, has historically been justified by exchanges as a way to attract more liquidity, but in the era of high-frequency trading that argument has come under scrutiny.
"There’s a big difference between liquidity and volume: if you start flat and go home flat, you’re not really providing liquidity," said Joseph Scafidi, director of trading at Brandes Investment Partners, which manages $27 billion. "It’s recently been announced that the SEC may take a look at some pilot programs for removing maker-taker. I am in strong support of such a program. There are a lot of incentives with the maker-taker model that many guys on my side of the fence have issues with."
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Source: Markets Media
NASDAQ to Begin Listing First Trust ETF on Thursday, May 15, 2014
May 13, 2014--Effective Thursday, May 15, 2014, The NASDAQ Stock Market(R)(NASDAQ(R)) will list one new ETF:
First Trust Managed Municipal ETF
The new ETF will be designated as NASDAQ Global MarketSM securities
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Source: NASDAQ OMX
Recon Capital launches white label ETF platform
Platform Includes Exclusive Distribution & Trading To Ensure Long Term Success
May 13, 2014--Recon Capital announced today, the immediate availability of its ETF Platform enabiling asset managers, hedge funds, and registered investment advisers (RIAs) to tap into the $1.7 trillion exchange traded fund industry with Recon Capital's comprehensive ETF infrastructure.
Recon's ETF Platform helps asset managers bring innovative investment solutions to the exchange traded fund and 1940 Act space. The Exchange Traded Platform focuses on providing better investment solutions in a liquid, transparent, and cost effective manner. Recon Capital launched it's first exchanged traded fund on the platform: the Recon Capital NASDAQ 100 Covered Call ETF (Nasdaq "QYLD") on December 12, 2013.
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Source: Recon Capital Partners
Potholes litter road to ETF investment by DC plans
May 12, 2014-With the very public launch of an ETF-only 401(k) plan option by Charles Schwab Corp., might some defined contribution plan executives finally be willing to give exchange-traded funds a try?
According to Steven Anderson, president of Schwab Retirement Plan Services Inc., for Charles Schwab in Cleveland, the company has already received commitments from several defined contribution plans to convert to all ETFs beginning in the fall, including a plan in excess of $100 million.
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Source: Pensions & Investments
iShares reassures advisers: 'We won’t compete with you'
May 12, 2014--BlackRock has been busy packaging its iShares exchange traded funds into asset allocation models, but iShares global chief Mark Wiedman says the firm is not looking to undermine a key distribution channel.
What we will not do is compete with you," Wiedman told an audience of third-party ETF strategists at its annual iShares Connect conference in New York last week.
Deutsche unit eyes US passive assets view more
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly Review-Fixed Income ETPs capture $1.3bn
The total US ETP flows from all products registered $1.4bn (-0.1% of AUM) of outflows during last week vs. $0.9bn (+0.1%) of inflows the previous week, setting the YTD weekly flows average at +$1.5bn (+$28.6bn YTD in total cash flows).
Equity, Fixed Income and Commodity ETPs experienced flows of -$2.8bn (-0.2%), +$1.3bn (+0.5%) and +$0.1bn (+0.1%) last week vs. -$1.4bn (-0.1%), +$2.5bn (+0.9%) and -$0.2bn (-0.4%) in the previous week, respectively.
Among US sectors, Energy (+$0.1bn, +0.4%) and Industrials (+$0.1bn, +0.3%) received the top inflows, while Financials (-$0.4bn, -0.6%) and Utilities (-$0.3bn, -3.1%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: TLT (+$0.4bn), IVV (+$0.4bn), VEA (+$0.3bn)
Top 3 ETPs & ETNs by outflows: IWM (-$1.6bn), QQQ (-$1.2bn), SPY (-$1.1bn)
New Launch Calendar: two new smart beta funds reach the market
Assets under Management (AUM) Review: Assets decreased by $4.3bn view more Institutional Use of ETFs Has Transformed in Five Years
The study, "ETFs: An Evolving Toolset for U.S. Institutions," conducted by Greenwich Associates and sponsored by BlackRock, presents the ETF usage trends of institutions, including corporate and public pensions funds, foundations and endowments, asset managers, investment consultants, insurance companies, and Registered Investment Advisors (RIAs). view more
Morgan Stanley-US ETF Weekly Update
ETFs posted net outflows of $1.4 bln last week
13-week flows remain positive among asset classes; combined $53.1 bln in net inflows US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares 20+ Year Treasury Bond ETF (TLT) posted net inflows of $437 mln this past week, the most of any ETF US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume decreased in April to 25%, down from 27% the prior month; over the last 5 years, ETF monthly $ volume as a % of listed trading volume averaged 28%
Over the last five years, ETF monthly $ volume as a % of listed trading volume peaked in August 2011 at 36%
ETF $ volume declined to $279 bln last week and is 16% below its 13-week average
Fixed Income ETFs accounted for only 6% of ETF $ volume last week, but make up 15% of ETF market cap share US-Listed ETFs: Short Interest Data Updated: Based on data as of 4/30/14
iShares Russell 2000 ETF (IWM) had the largest increase in USD short interest at $2.3 bln
The average shares short/shares outstanding for ETFs is currently 4.5%, flat from last period US-Listed ETFs: Most Successful Recent Launches by Assets
$8.4 bln in total market cap of ETFs less than 1-year old
The top 10 most successful launches make up 46% of the market cap of ETFs launched over the past year request report Bank of Montreal could scrap historic F&C brand view more
Source: FT.com
Deutsche Asset & Wealth Management, Europe's second-largest exchange-traded product provider, is making a push for assets in the US, bulking up its sales staff and plotting its growth strategy in a market where it ranks 12th.
The US is easily the richest global market for ETPs, with $1.8 trillion in assets from 57 providers. Deutsche's ETP assets in the US amount to less than 1% of this, at $11.7 billion, against $52.8 billion in assets in Europe.
Source: Financial News
May 12, 2014--Data in this report is as of Friday, May 09
Market and Net Cash Flows Review
The US (S&P 500) fell by 0.14%; while, outside the US, the MSCI EAFE (in USD) dropped by 0.33% and the MSCI EM (USD) rose by 0.38%. In the meantime, performance was mixed across US sectors; the Consumer Staples (+0.71%) and the Materials (+0.32%) sectors recorded the largest weekly gains; meanwhile, the Utilities (-0.68%) and the Consumer Discretionary (-0.67%) were the worst performing sectors. The DB Liquid Commodity Index fell by 0.57%; similarly, the Agriculture sector (DB Diversified Agriculture Index), Gold and Silver prices fell by 1.65%, 0.83% and 1.72%, respectively; while, the WTI Crude Oil rose by 0.23%.
Moving into other asset classes, the 10Y US Treasury Yield rose by 2bps ending at 2.62%. Last but not least, Volatility (VIX) slightly rose by 0.08% during the same period.
There were two new ETFs listed during last week. The new products offer exposure to European (EUDG) and international developed market (IHDG) companies with focus in dividend growth.
Turnover Review: Floor activity decreased by 13.7%
Total weekly turnover decreased by 13.7% to $271.4bn vs. $314.6bn from the previous week; furthermore, last week's turnover level was 5.2% below last year's weekly average. Equity, Fixed Income and Commodity ETPs turnover decreased by $37.3bn (-13.2%), $3.6bn (-16.8%) and $2.6bn (-32.1%) during the same period, respectively.
US ETP assets dropped by $4.3bn (-0.2%) totaling $1.730 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of 3.1% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$6.3bn, +$1.7bn and +$0.3bn during last week, respectively.
Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
Research by Greenwich Associates shows ETFs have become essential strategic tools
May 12, 2014-ETFs have become a standard tool in institutions' investment toolkit, according to a study released today by Greenwich Associates.
Nearly half (46%) of institutional ETF investors surveyed allocate 10% or more of total assets to ETFs and 47% say they expect to expand their use in the next year.
Source: BlackRock
May 12, 2014--US ETF Weekly Update
Weekly Flows: $1.4 Billion Net Outflows
ETFs Have Generated Net Inflows 12 of 19 Weeks YTD
ETF Assets Stand at $1.7 Trillion, Up 3% YTD
Two ETF Launches Last Week
ProShares Resumes Acceptance of Creation Units On 11 ETFs
US-Listed ETFs: Estimated Flows by Market Segment
Last week's net outflows were led by US Small- & Micro-Cap ETFs at $1.9 bln; conversely, International - Developed ETFs posted net inflows of $1.6 bln, the most of any category we measured
Nine of the 15 categories we measured posted net inflows last week; ETFs have generated net inflows 12 of the 19 weeks YTD
ETF assets stand at $1.7 tln, up 3% YTD
US Large-Cap ETFs generated $13.0 bln in net inflows over the last 13 weeks, the most of any category we measured; notably, three ETFs that track the S&P 500 Index accounted for $11.5 bln of the net inflows in this category over the past 13 weeks
Over the last 13 weeks, Currency and Commodity ETFs were the only categories to post net outflows (only exhibited a combined $517 mln in net outflows)
For the second straight week, a Treasury ETF has been the top asset gather in the ETF universe; interestingly, over the last 13 weeks, we've seen more money flow into the iShares 7-10 Year Treasury Bond ETF (IEF), which focuses on 7-10 year Treasuries, than TLT which captures the longer end of the curve
The First Trust North American Energy Infrastructure Fund (EMLP) generated net inflows of $167 mln last week, or 24% of its current market cap; EMLP is an actively managed ETF that focuses on infrastructure securities including MLPs, income trusts, and utilities
The iShares Russell 2000 ETF (IWM) exhibited net outflows of $1.6 bln last week, however for the last 13 weeks has still managed to post net inflows of $766 mln
The PowerShares QQQ (QQQ) had its seventh consecutive week of net outflows ($1.3 bln last week) as investors remain cautious on some of the momentum stocks (i.e., technology and biotech names); over the last seven weeks, QQQ has exhibited net outflows of $6.0 bln
IWM's shares short are at their highest level (156 mln shares) since 1/31/13; notably, IWM is up nearly 25% since 1/31/13 on a total return basis
617 ETFs exhibited short interest increases while 656 experienced short interest declines over the last period
Aggregate ETF USD short interest declined by $358 mln over the period ended 4/30/14
The SPDR Retail ETF (XRT) is the most heavily shorted ETF as measured by shares short/shares outstanding at 362%
Six of the 10 most heavily shorted ETFs as a % of shares outstanding are industry based (XRT, XOP, IYR, XBI, SMH, RTH)
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only six ETFs exhibited shares short as a % of shares outstanding greater than 100%)
Over the last year, 36 Fixed Income ETFs have been brought to market, the most of any category; Fixed Income ETFs currently account for 27% of ETF market share measured by market capitalization as investors continue to show interest in the asset class
Similar to some of the trends we've witnessed in the broader ETF universe, recently launched International - Developed ETFs have also gathered new money over the last year; 29 ETFs have been brought to market, accounting for 16% of recently launched ETF market share
68 new ETF listings and 19 closures YTD
Seven ETF sponsors and two asset classes (equities and fixed income) represented in top 10 most successful launches
Notably, the ProShares S&P 500 Aristocrats ETF (NOBL) cracked the top 10 most successful launches over the past year last week; NOBL owns US dividend-paying equities that have increased dividends for at least 25 consecutive years
Source: Morgan Stanley
May 11, 2014--Canada's Bank of Montreal could scrap the historic F&C brand, potentially bringing the 146-year history of one of the oldest names in London's fund market to an end.
BMO last week completed its £700m acquisition of F&C with the aim of making it the centrepiece of its European fund management operations.
Source: FT.com
