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DB-Synthetic Equity & Index Strategy-North America-US ETF Market Monthly Review-ETP assets up by $75bn as investors' risk appetite grows
November 6, 2013--Data in this report is as of Thursday, October 31
US ETP assets higher by $75bn
ETP assets in the US rose by $74.9bn to $1.619 trillion (YTD +21.4%) last month. Global ETP industry assets closed at $2.193 trillion (YTD +19.2%)
Flows Review: investors keep loving equities
US ETPs experienced inflows of $25.9bn during October (+1.7% of last month's AUM).
Within long-only ETPs, total flows were +$26.3bn in October vs. +$32.4bn in September. Equity, Fixed Income, and Commodity long-only ETPs experienced flows of +$31.3bn, -$3.2bn and -$2.2bn, respectively.
Investors' appetite for risky assets remained strong during October. As already mentioned, Equity products remained the most attractive asset class by gathering $31.3bn in new cash last month for a total of +$158.9bn YTD (already 38% above the 2012 total figure for equities); within equities, attention was still centered in developed markets, with emphasis in US focused ETPs (+$19.4bn) and increasing momentum in DM ex US ETPs (+$8.3bn, their second largest monthly inflows on record), fueled by flows into broad regional benchmarked products (+$7.7bn). Meanwhile, in the Fixed Income space we saw investors pulling $5.0bn out of Sovereign debt ETPs and pouring cash into Corporate (+$2.0bn) products, specially into HY (+$2.4bn) focused ETPs; Short Duration (+$0.2bn) ETPs continued gathering new cash, however at a slower pace in the last month. Last but not least, Commodity ETPs, which have not received a single positive month thus far this year, ended October with $2.2bn (-$25.6bn YTD) in net redemptions.
New Launch Calendar: thirty new products covering three asset classes
October was a very busy month for new listings. There were twenty-eight new ETPs and two new ETNs listed during the previous month. Twenty-six of them were listed in the NYSE Arca, while the remaining two were listed in Nasdaq. The new products offer exposure to a broad variety of strategies covering multiple asset classes.
Turnover Review: Floor activity increased by 22.5% in October
ETP turnover totaled $1.448 trillion last month, 22.5% (+$265.8bn) higher than the previous month figure of $1.182 trillion, and 23.9% above last year's monthly average of $1.168 trillion. Equity ETPs turnover increased by $264.6bn (+25.5%); while Fixed Income and Commodity ETPs turnover decreased by $2.5bn (-2.8%) and $1.7bn (-3.6%), respectively.
ETP trading made up 26.6% of all US cash equity trading in October, down from this year's peak of 32.0% in June, and still below its 3-year monthly average of 28.1%.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
New exchange-traded fund lets foreigners invest directly in shares listed in mainland China
November 6, 2013--Foreign investors looking to get access to China's onshore market will have a new avenue starting on Wednesday when Deutsche Asset & Wealth Management launches the first ETF with direct exposure to shares of companies listed on the mainland.
The db X-trackers Harvest CSI 300 China A-Shares Fund, set to trade under the ticker ASHR on the NYSE Arca exchange, will be the first exchange-traded fund to directly tap into the A-share market of Chinese stocks priced in yuan and traded in Shanghai and Shenzhen.
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Source: South China Morning Post
First ETF For China-A Direct
November 6, 2013--Deutsche Asset & Wealth Management has announced the launch of db X-trackers Harvest CSI 300 China A-Shares Fund (NYSE ticker: ASHR), an exchange-traded fund (ETF) that offers a direct investment opportunity in the world's second-largest economy.
The fund is listed on NYSE Arca from today (November 6 2013).
ASHR is described as the first U.S.-listed ETF to provide investors with direct equity exposure to the many Chinese sectors and companies that are available exclusively via the China A-shares market, in which foreign investment has historically been limited.
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Source: Global Custody News
Tech user numbers do not equal profit, warns SEC
November 6, 2013--The top US securities regulator has warned that technology companies with lots of users will not always translate them into large profits, in comments that appeared to be timed to coincide with the eve of Twitter's much-anticipated initial public offering.
Mary Jo White, chair of the Securities and Exchange Commission, questioned whether investors could understand a company's future prospects when they were bamboozled by ...
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Source: FT.com
FlexShares Introduces Global Quality Real Estate Index ETF
ETF Places Emphasis on Stable, Long-Term Capital Growth
November 6, 2013--FlexShares(R) Exchange Traded Funds, sponsored and managed by Northern Trust, today launched the FlexShares Global Quality Real Estate Index Fund (NYSE Arca: GQRE).
The Fund attempts to outperform traditional real estate indices via global exposure to listed, non-mortgage real estate investment trusts and operating companies that emphasize stable, long-term capital growth at an attractive price.
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Source: FlexShares
BMO Wealth Institute Special Report: Using Exchange-Traded Funds to Grow Retirement Savings
Only one--fifth of Canadian investors are knowledgeable about ETFs-However, sixty per cent would add ETFs to their portfolio after learning about their benefits
November 6, 2013--According to a special report issued today by the BMO Wealth Institute, more investors are considering exchange traded funds (ETFs) when determining what investments to include in a retirement savings portfolio.
While the report notes that the demand for ETFs is growing worldwide, they remain one of the least understood investment vehicles among Canadians:
Only 19 per cent of Canadian investors claim to be knowledgeable about ETFs compared to traditional investments such as guaranteed investment certificates (GICs) (58 per cent) and mutual funds (55 per cent).
However, once told about the benefits of ETFs, 60 per cent report that they would add them to their portfolios.
"Exchange traded funds have only been around for the last twenty years so it's understandable that Canadians are still in the process of familiarizing themselves with them," said Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. "Due to their many benefits, ETFs are a great fit not only for a portfolio in general, but specifically for accumulating wealth for retirement."
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Source: Yahoo Finance
BlackRock, Fidelity Face Initial Risk Study by Regulators
November 6, 2013--BlackRock Inc. (BLK) and Fidelity Investments will be studied by U.S. regulators who are in the early stages of reviewing whether asset managers pose a potential risk to the financial system, two people with knowledge of the matter said.
The Financial Stability Oversight Council's discussion Oct. 31 and agreement to review New York-based BlackRock and Boston-based Fidelity don’t necessarily mean the companies will be designated systemically important by the council, according to the people, who requested anonymity because the meeting was closed to the public. The panel didn't take any formal action regarding the companies.
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Source: Bloomberg
Few Canadian investors are knowledgeable about ETFs: survey
Majority say they would add ETFs to their portfolios after learning about their benefits
November 6, 2013--
Most Canadians remain unclear about what exchange-traded funds (ETFs) are, according to a report released by the Toronto-based Bank of Montreal (BMO) Wealth Institute on Wednesday.
BMO reports that only 19% of Canadian investors understand ETFs.
Comparatively, 58% of Canadians know about guaranteed investment certificates (GIC) and 55% said they understand mutual funds.
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Source: Investment Executive
Franklin Templeton Investments Launches Actively Managed Franklin Short Duration US Government ETF for US Investors
November 5, 2013--Franklin Templeton Investments today announced the introduction of Franklin Short Duration US Government ETF (the "fund") (NYSE Arca: FTSD). This actively managed ETF seeks a high level of current income and preservation of capital by following a short duration US government portfolio strategy.
The fund is designed for US investors who are income focused while also looking to achieve lower volatility than intermediate and longer duration strategies. It is also designed for investors looking for a portfolio free from corporate credit risk.
"With Franklin Short Duration US Government ETF, we are taking a yield-driven approach and investing where we see the most attractive short-term yield potential across various US government bond sectors, including higher yielding MBS (Mortgage-Backed Securities), ARMS (Adjustable Rate Mortgage Securities) and TIPS (Treasury Inflation-Protected Securities)," said Roger Bayston, CFA(1) , the fund's lead portfolio manager and senior vice president of Franklin Templeton Fixed Income Group.
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Source: Wall Street Journal
U.S. exchange-traded funds moving into Latin American pensions
November 5, 2013--Major U.S. exchange-traded fund companies are enthusiastically marketing their wares to Latin American pension funds, particularly in Chile where investors can allocate up to 80 percent of their pension contributions in foreign investments.
As Latin American countries have privatized pension systems, U.S. ETFs are proving attractive to local fund managers who want to invest more broadly outside the region, diversify risk and find products that carry lower costs than traditional mutual funds.
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Source: Reuters
