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DB-Synthetic Equity & Index Strategy- North America-US ETF Market Monthly Review-Equity ETPs gathered $10.7bn in fresh new cash
March 11, 2014--Market and Net Cash Flows Review
The US (S&P 500) edged higher by 1.00%; while, outside the US, the MSCI EAFE (in USD) dropped by 0.35% and the MSCI EM (USD) was flat (+0.06%). In the meantime, performance was mostly positive across US sectors. The Financials (+3.01%) and Industrials (+1.78%) sectors recorded the biggest weekly gains; while the Utilities (-1.26%) sector recorded the only decrease; The DB Liquid Commodity Index rose by 0.71%; similarly, the Agriculture sector (DB Diversified Agriculture Index) and Gold prices rose by 3.71% and 1.02%, respectively; meanwhile, the WTI Crude Oil remained roughly unchanged and Silver prices fell by 1.51%. Moving into other asset classes, the 10Y US Treasury Yield rose by 14bps ending at 2.80%.
Last but not least, Volatility (VIX) rose by 0.79% during the same period.
The total US ETP flows from all products registered $1.9bn (+0.1% of AUM) of inflows during last week vs. $5.6bn (+0.3%) of inflows the previous week, setting the YTD weekly flows average at +$0.6bn (+$5.6bn YTD in total cash flows). Equity, Fixed Income and Commodity ETPs experienced flows of +$10.7bn (+0.8%), -$8.7bn (-3.1%) and +$0.3bn (+0.4%) last week vs. +$3.8bn (+0.3%), +$0.9bn (+0.3%) and +$0.6bn (+1.0%) in the previous week, respectively.
Among US sectors, Financials (+$1.3bn, +2.0%) and Information Technology (+$0.5bn, +1.6%) received the top inflows, while Industrials (-$0.3bn, -2.2%) and Utilities (-$0.2bn, -2.9%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: IVV (+$3.2bn), UWM (+$1.6bn), SSO (+$1.4bn)
Top 3 ETPs & ETNs by outflows: SHY (-$3.8bn), IEI (-$3.5bn), UST (-$2.4bn)
New Launch Calendar: sector rotation, yield, Korea and China A-shares
Four new ETFs were listed during the previous week. First Trust listed a new ETF (FV) which offers access to a sector rotation strategy; Horizons listed HKOR, which offers exposure to the large-cap Korean market; AdvisorShares added a new actively managed ETF (YPRO) with focus in yield; Last but not least, KraneShares listed a new ETF (KBA) offering physical exposure to the Chinese A-share market.
Turnover Review: Floor activity increased by 16.5%
Total weekly turnover increased by 16.5% to $381.4bn vs. $327.3bn from the previous week. Furthermore, last week's turnover level was 33.3% over last year's weekly average. Equity and Fixed Income ETPs turnover increased by $35.6bn (+12.0%) and $19.2bn (+119.9%), respectively; while Commodity ETPs turnover decreased by $1.3bn (-11.7%) during the same period.
Assets under Management (AUM) Review: assets increased by $10.3bn
US ETP assets rose by $10.3bn (+0.6%) totaling $1.713 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +2.1% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved +$19.8bn, -$9.9bn and +$0.7bn during last week, respectively.
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Source: Deutsche Bank- Synthetic Equity & Index Strategy- North America
New York to Accept Bitcoin-Exchange Proposals to Speed New Rules
March 11, 2014--New York financial regulators said they will immediately begin accepting applications to operate exchanges for Bitcoin and other digital currencies to help speed the development of rules for that market.
Benjamin Lawsky, the superintendent of financial services, announced the move in a statement today, saying his office will propose a set of rules for virtual-currency firms by the end of the second quarter.
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Source: Bloomberg
U.S. Jewish Groups Courted by Index Guru for Israeli ETF
March 11, 2014--Steven Schoenfeld staked his career on a single belief in 2010: there was latent demand in the U.S. Jewish community to invest in Israeli stocks.
That year, the Wall Street veteran founded a company that would create an index that includes Israeli shares traded both in Tel Aviv and abroad.
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Source: Bloomberg
First Trust to Launch First Trust RBA American Industrial RenaissanceTM ETF and First Trust RBA Quality Income ETF
New exchange-traded funds focus on the American Industrial Renaissance and Equity Income
March 11, 2014- First Trust Advisors L.P. ("First Trust"), a leading ETF provider, expects to launch two new exchange-traded funds ("ETFs"), the First Trust RBA American Industrial RenaissanceTM ETF (NASDAQ: AIRR) and the First Trust RBA Quality Income ETF (NASDAQ: QINC). The new funds are expected to begin trading on The NASDAQ Stock Market on March 11, 2014 and track indexes developed by Richard Bernstein Advisors LLC ("RBA").
"These two ETFs seek to address investors' needs for income and theme-based investing. RBA has long been a proponent of the American industrial renaissance theme and we think we understand it better than most," said Richard Bernstein, RBA’s Chief Executive and Chief Investment Officer.
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Source: First Trust
ICI-ETFs Don’t Move the Market-Information Does
March 11, 2014--There they go again.
After last week's turmoil in the bond market, some commentators sought to link net redemptions from bond ETFs to heightened volatility in the U.S. Treasury market on Tuesday, March 4. But as we have written before when examining the relationship between equity ETFs and stock market volatility, such assertions break down under a careful examination of the data, because they downplay the primary driver of volatility-news that affects investors' investment decisions.
A Small Slice of the Pie
The net issuance of Treasury bond ETFs represents a tiny share of trading in the $12 trillion U.S. Treasury market, which is widely considered one of the deepest, most liquid markets in the world. Hundreds of billions of dollars worth of Treasury securities change hands every day, so it is highly unlikely that the $6.6 billion in net redemptions of Treasury bond ETFs that occurred on March 4 applied much pressure to this market.
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Source: ICI
Specialist ETF managers attract strong inflows
March 11, 2014--Highly sophisticated investment portfolios constructed cheaply with exchange traded funds are winning more attention from cost conscious investors and financial advisers.
A growing band of US specialists are tapping into this interest and seeing a rapid growth in assets.
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Source: FT.com
JP Morgan unveils plans to increase its share in Chile, region
March 11, 2014--A new country head will soon take over in Santiago; replacing recently separated employees.
In the medium term, the manager plans to register ETFs in Chile, based on a new line of these instruments under development in the United States, while human capital will also be allocated to the Argentine-Uruguayan market.
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Source: FundPro Latin America
Global X Funds Launches Guru Small Cap And Guru International ETFs
March 11, 2014--Global X Funds, the New York-based provider of exchange-traded funds (ETFs, today launched the Global X Guru(SM) Small Cap Index ETF (NYSE Arca: GURX) and the Global X Guru(SM)International Index ETF (NYSE Arca: GURI).
The introduction of the two funds establishes a suite of "Guru"-themed ETFs, which seek participation in the ideas of some of the world's most sophisticated investors. The flagship Global X Guru(SM) Index ETF launched in June 2012 and is currently ranked among the top 1% U.S. Large-Cap Core Equity funds, according to Lipper, Inc.
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Source: Global X
FINRA Issues New Investor Alert, Bitcoin: More than a Bit Risky
March 11, 2014--FINRA's Investor Alert adds to a growing chorus of Bitcoin-related warnings from other regulators.
The Financial Industry Regulatory Authority (FINRA) issued a new investor alert called Bitcoin: More than a Bit Risky to caution investors that buying and using digital currency such as Bitcoin carry risks.
While speculative trading in bitcoins carries significant risk, there is also the risk of fraud related to companies claiming to offer Bitcoin payment platforms and other Bitcoin-related products and services.
The threat of Bitcoin-related fraud is a real danger for investors looking to make a quick profit from Bitcoin. For example, on February 19, 2014, the SEC suspended trading in the securities of Imogo Mobile Technologies Corp, which had announced testing of a new mobile platform for Bitcoin a few weeks earlier.
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Source: FINRA
CBO-Monthly Budget Review for February 2014
March 10, 2014--The federal government ran a budget deficit of $379 billion for the first five months of fiscal year 2014, CBO estimates, $115 billion less than the shortfall recorded in the same span last year. Revenues are higher and outlays are lower than they were at this time a year ago.
Without shifts in the timing of certain payments (which otherwise would have fallen on a weekend), the deficit for the five-month period would have been $148 billion less this year than it was in fiscal year 2013.
view the CBO Monthly Budget Review for February 2014
Source: Congressional Budget Office (CBO)
