Americas ETP News
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Vanguard expands into ETF model portfolios
February 11, 2014--Vanguard is now offering model portfolios to help financial advisers package their exchange traded funds, part of the firm's heavy investment to build out its intermediary sales business.
In recent years, it has roughly doubled its sales force, transitioned to a field-based sales model and worked to support advisers with dedicated technology and education materials. The model portfolios were developed as another tool to help advisers incorporate Vanguard ETFs into client portfolios.
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Source: FT.com
S.E.C.'s Review of Stock Trading Will See Some of Its Own Work
February 11, 2014--There are now at least 58 stock exchanges in the United States, many of them dark pools where the trades can be made anonymously.
With institutional investors claiming they are outgunned by high-frequency traders, and individual investors adrift in fragmented markets, it's no wonder that Mary Jo White, the new head of the Securities and Exchange Commission, is moving to review and overhaul how stocks are traded. The issue is that the S.E.C. may have created the problem it is now hoping to solve.
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Source: NY Times
U.S. Bancorp Fund Services Adds Additional ETF From Vident Financial to its MST
February 10, 2014--U.S. Bancorp Fund Services (USBFS) has added another exchange traded fund (ETF) from Vident Financial to its ETF Series Solution (ESS) multiple series trust (MST).
Vident Core U.S. Equity launched Wednesday, January 22, 2014.
"We are grateful to the team at U.S. Bancorp Fund Services for helping make the Vident Core U.S. Equity Fund launch a resounding success. Their attention to detail and client orientation made a complicated endeavor go smoothly," said Nick Stonestreet, chief executive officer for Vident Financial.
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Source: U.S. Bancorp Fund Services (USBFS)
'Done-Away' Order Management Launches in PrecISE Trade(R)
Members Can Now Consolidate All Order Management in PrecISE
February 10, 2014--The International Securities Exchange Holdings, Inc. (ISE Holdings) today announced the launch of 'done-away' order management in PrecISE Trade(R), ISE and ISE Gemini's front-end order and execution management system. 'Done-away' order management provides ISE and ISE Gemini members with fully consolidated order and execution management, regardless of execution method or destination. This enhancement is the latest addition to PrecISE Trade's suite of OMS features, which are available to all PrecISE users at no additional cost.
"Over the past year, we have worked to expand PrecISE from a leading execution management tool to a comprehensive order management system," said Jeanine Hightower, Business Development Officer. "The new 'done-away' feature enhances PrecISE's OMS capabilities and offers consolidated order management in a single, user-friendly and cost-efficient platform."
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Source: ISE (International Securities Exchange Holdings)
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly Review -$14.9bn flows into Fixed Income while $24.1bn exits Equity ETPs
February 10, 2014--Data in this report is as of Friday, Feb 7th
Market and Net Cash Flows Review
The US (S&P 500) edged higher by 0.81%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) rose by 0.76% and 0.11%, respectively. In the meantime, performance was mostly positive across US sectors. The Consumer Discretionary (+1.93%) and Materials (+1.49%) sectors recorded the largest weekly gains. The DB Liquid Commodity Index rose by 2.52%; similarly, the Agriculture sector (DB Diversified Agriculture Index), the WTI Crude Oil, Gold and Silver prices rose by 2.24%, 2.45%, 1.83% and 4.43%, respectively.
Moving into other asset classes, the 10Y US Treasury Yield rose by 4bps ending at 2.71%. Last but not least, Volatility (VIX) dropped by 16.95% during the same period.
The total US ETP flows from all products registered $9.1bn (-0.6% of AUM) of outflows during last week vs. $14.0bn (-0.9%) of outflows the previous week, setting the YTD weekly flows average at -$4.0bn (-$24.3bn YTD in total cash flows). Equity, Fixed Income and Commodity ETPs experienced flows of -$24.1bn (-1.9%), +$14.9bn (+5.7%) and +$0.2bn (+0.4%) last week vs. -$14.3bn (-1.1%), +$1.0bn (+0.4%) and -$0.2bn (-0.4%) in the previous week, respectively.
Among US sectors, Information Technology (+$0.6bn, +2.1%) and Healthcare (+$0.5bn, +1.6%) received the top inflows; while Consumer Discretionary (-$1.3bn, -11.8%) and Consumer Staples (-$1.2bn, -12.3%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: SHY (+$3.7bn), IEI (+$3.6bn), UST (+$2.8bn)
Top 3 ETPs & ETNs by outflows: SPY (-$9.8bn), IVV (-$3.1bn), IJH (-$2.9bn)
New Launch Calendar: Floating Rate Notes, AMT-Free and currency-hedged
There were six new ETFs listed during the previous week. The new products offer access to FRNs, a new type of marketable security with a floating interest rate offered by the US Treasury; AMT-Free Municipals with set maturity for 2019; and currency-hedged exposure to Japan, Germany and international (ex US and Canada) developed markets.
Turnover Review: Floor activity increased by 13.6%
Total weekly turnover increased by 13.6% to $485.5bn vs. $427.4bn from the previous week. Furthermore, last week's turnover level was 69.6% over last year's weekly average. Equity and Fixed Income ETPs turnover increased by $42.1bn (+10.9%) and $17.6bn (+73.8%), respectively; while Commodity ETPs turnover decreased by $1.5bn (-11.9%) during the same period.
Assets under Management (AUM) Review: assets decreased by $1.7bn
US ETP assets dropped by $1.7bn (-0.1%) totaling $1.619 trillion at the end of the week. As of last Friday, US ETPs assets had declined by 3.5% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$17.5bn, +$14.9bn and +$0.9bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
Morgan Stanley-US ETF Weekly Update
February 10, 2014--US ETF Weekly Update
Weekly Flows: $9.1 Billion Net Outflows
Third Consecutive Week of Net Outflows
ETF Assets Stand at $1.6 Trillion, Down 4% YTD
Six ETF Launches Last Week
Factor Advisors Closes Two ETFs
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net outflows of $9.1 bln last week, the third consecutive week of net outflows
Over the last three weeks, ETFs have exhibited a combined $32.4 bln in net outflows
Last week's net outflows were led by US Large-Cap ETFs at $13.6 bln; conversely, Fixed Income ETFs posted net inflows of $11.9 bln, the most of any category we measured
Nine of the 15 categories we measured posted net outflows last week
ETF assets stand at $1.6 tln, down 4% YTD
13-week flows remain positive among asset classes; combined $4.8 bln in net inflows
International - Developed ETFs have generated $18.5 bln in net inflows over the last 13 weeks, while International -Emerging ETFs have posted $15.5 bln in net outflows; the divergence is remarkable as International - Developed ETFs now have a market cap nearly twice as large as International - Emerging ETFs
Notably, after last week's net inflows, Fixed Income ETFs have generated net inflows of $10.7 bln over the last 13 weeks; this is a reversal from the net outflows we witnessed during the second half of last year
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares 1-3 Year Treasury Bond ETF (SHY) posted net inflows of $3.7 bln this past week, the most of any ETF
Fixed Income ETFs accounted for nine of the 10 ETFs (including a leveraged Treasury ETF) to generate the largest net inflows last week, totaling $13.9 bln; investors fled equities last week and sought the safety of high quality US fixed income investments
Over the last 13 weeks, the SPDR S&P 500 ETF (SPY) has posted net outflows of $11.9 bln, the most of any ETF; SPY has posted net outflows for five consecutive weeks
Additionally, over the last 13 weeks, the iShares MSCI Emerging Markets ETF (EEM) has lost over 30% of its current market cap in net outflows; International - Emerging ETFs as a whole have exhibited large net outflows as investors fear slowing growth and declining emerging market currencies
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume declined to 25% in January, which is below the five-year average of 28%
Over the last five years, ETF monthly $ volume as a % of listed trading volume peaked in August 2011 at 36%
ETF $ volume was $499 bln last week, up $61 bln from the prior week and more than 68% above its 13-week average
US Mid-Cap ETFs accounted for 4% of ETF $ volume last week, up from their 13-week average of 2%
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 1/15/14
The iShares MSCI Emerging Markets ETF (EEM) had the largest increase in USD short interest at $2.1 bln
EEM's shares short are at their highest level since 6/14/13 as investors flee emerging market equity and debt
685 ETFs exhibited short interest increases while 559 experienced short interest declines over the last period
Aggregate ETF USD short interest increased by $10.0 bln over the period ended 1/15/14
The average shares short/shares outstanding for ETFs is currently 4.4%, up from 4.2% last period
Six of the 10 most heavily shorted ETFs as a % of shares outstanding are sector/industry related
For the second consecutive period, the SPDR Oil & Gas Exploration & Production ETF (XOP) was the most heavily shorted ETF with shares short as a % of shares outstanding of 348%
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only eight ETFs exhibited shares short as a % of shares outstanding equal to or greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
$7.9 bln in total market cap of ETFs less than 1-year old
Active ETFs account for 24% of the market capitalization of ETFs launched over the past year, the most of any category
Over the last 13 weeks, International - Developed ETFs have attracted $712 mln in net inflows, the most of any group
31 new ETF listings and two closures/delistings YTD (10 additional closures announced)
The top 10 most successful launches make up 46% of the market cap of ETFs launched over the past year
Seven ETF sponsors and two asset classes (equities and fixed income) represented in top 10 most successful launches; we note that the representation of funds with an income orientation is currently five (down from seven at the end of the second quarter 2013)
The iShares MSCI USA Quality Factor ETF (QUAL) posted net inflows of $21 mln last week, the most of any recently launched ETF; QUAL owns US equities selected based on fundamental factors, including high return on equity, stable year-over-year earnings growth, and low financial leverage
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Source: Morgan Stanley
Investors turn to 'shadow' bond market
February 10, 2013--The shadows are growing in the corporate bond market as investors turn to derivatives to buy and sell.
An increasingly illiquid cash bond market is behind the shift, with banks starting to withdraw from market making.
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Source: FT.com
SEC Guidance Update: Risk Management in Changing Fixed Income Market Conditions
February 9, 2014--In January the SEC issued a Guidance Update: Risk Management in Changing Fixed Income Market Conditions.
view the IM Guidance Update: Risk Management in Changing Fixed Income Market Conditions
Source: SEC.gov
CFTC.gov Commitments of Traders Reports Update
February 7, 2014--The current reports for the week of February 4, 2014 are now available.
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Source: CFTC.gov
BNY Mellon ADR Index Monthly Performance Update-January 2014
February 7, 2014--The BNY Mellon ADR Index Monthly Performance-January 2014 Update has been published and is now available for review.
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Source: BNY Mellon
