Americas ETP News
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What Makes Alternative Beta Smart?
September 25, 2013--A growing variety of alternative beta strategies have come to market in recent years. Many of these strategies are purported to be "Smart Betas." Are they? What makes them smart?
According to Towers Watson (2013), a leading global investment-consulting firm, “Smart beta is simply about trying to identify good investment ideas that can be structured better... smart beta strategies should be simple, low cost, transparent and systematic.” This straightforward definition indicates what investors ought to expect of a "Smart Beta." Our research suggests that many alternative beta strategies fall short of this definition. Some are overly complex and opaque in the source of their value added. Others will incur unnecessary implementation costs. Many alternative beta strategies don’t seem so smart.
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Source: Research Affiliates
Edward Kerschner Joins Emerging Global Advisors as Vice Chairman
Firm's strategy team adds thematic investing veteran
September 25, 2013--Emerging Global Advisors (EGA), the asset manager to the EGShares exchange-traded fund (ETF) offering, announced today that Edward Kerschner joined the firm as Vice Chairman.
In this role, Mr. Kerschner will be an integral part of the strategy team and will be responsible for helping wealth managers understand developing market investment opportunities.
Mr. Kerschner joins EGA with 35 years of experience in the securities industry across a number of strategy roles, including Chief Investment Strategist and Chairman of the Investment Policy Committee at PaineWebber, Chief Global Strategist for UBS Investment Research, Chief Investment Officer for Citi Investment Research and the Chief Investment Strategist for Citi Global Wealth Management.
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Source: Emerging Global Advisors (EGA)
Federal Debt and the Statutory Limit, September 2013
September 25, 2013--The Congress has traditionally placed a limit on the total amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. Law-makers have enacted numerous increases to the debt limit-commonly known as the debt ceiling-some of which have been temporary but many of which have been permanent.
The Treasury's borrowing has been at the current limit since May, although it has employed a well-established toolbox of so-called extraordinary measures that allow it to borrow additional funds without breaching the debt ceiling.
On September 25, 2013, the Treasury estimated that its ability to borrow under those extraordinary measures will be exhausted no later than October 17, leaving a cash balance of approximately $30 billion. CBO currently projects that the Treasury will exhaust all of the borrowing authority created by those measures, as well as its cash balance, between October 22 and the end of the month. (It is possible, however, that the date could fall outside of that range.)
view the Federal Debt and the Statutory Limit, September 2013
Source: Congressional Budget Office (CBO)
ETF providers position funds for rising interest rate environment
September 24, 2013--Exchange-traded fund companies are coming to market with a rash of new products and strategies designed to protect income investors from the dangers of rising interest rates.
Even though the Federal Reserve deferred the start of a rising rate era when it held policy steady last week, "the narrative still holds," said Matt Tucker, head of fixed income strategy at BlackRock's iShares.
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Source: Reuters
American Independence Launches Risk-Managed Allocation Fund, an ETF-Based Asset Allocation Strategy Focused on Long Term Growth
JAForlines will sub-advise a new fund, designed to appeal to investors concerned about volatility
September 24, 2013--American Independence Financial Services, LLC (American Independence), a New York-based investment advisory firm and manager of mutual funds and separate accounts, today announced the launch of the American Independence Risk-Managed Allocation Fund (A: AARMX C: ACRMX I: RMAIX) (the "Fund"), an actively managed, ETF-based global asset allocation strategy.
The sub-advisor for the Fund is J.A. Forlines, LLC, a leading asset manager specializing in risk-managed, ETF-based global allocation investment solutions. The Fund will be marketed to financial intermediaries throughout the U.S.
The Risk-Managed Allocation Fund seeks to achieve long-term capital appreciation while providing lower than average risk. The Fund is an actively managed, multi-asset class portfolio that uses ETFs to take advantage of market trends globally.
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Source: American Independence Financial Services, LLC
Horizons ETFs Management (USA) LLC Appoints Head of Sales
September 24, 2013--Horizons ETFs Management (USA) LLC ("Horizons USA"),a subsidiary of Mirae Asset Global Investments Co., Ltd. ("MAGI") is pleased to announce the appointment of Michael Fardy as Executive Vice President and Head of Sales for Horizons USA.
Mr. Fardy is an investment industry executive with nearly two decades of experience in business development and strategic relationship management. Previously, Mr. Fardy was a Director at BlackRock responsible for expanding the presence of the iShares exchange traded funds across the northeastern United States. Prior to that, he was a Regional Vice President with Dreyfus Mutual Funds and a Regional Marketing Director with Putnam Investments.
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Source: Horizons Exchange Traded Funds Inc
Chicago upstart takes on Vix 'fear gauge'
September 24, 2013--There's a fearsome battle brewing in Chicago.
For two decades, the Vix index run by the Chicago Board Options Exchange has been the financial industry's go-to method for measuring expectations of volatility in the wider marketplace. But in recent years, with the Vix trading persistently low, some critics have proclaimed Wall Street's "fear gauge" to be seriously outdated.
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Source: FT.com
CFTC Certifies Futures Contract on S&P BSE 100 Index Submitted by BSE Ltd (BSE)
September 24, 2013--Contract May be Offered to U.S. Persons Effective September 24, 2013
The Commodity Futures Trading Commission's (CFTC) Division of Market Oversight issued a letter advising the BSE that its S&P BSE 100 Index futures contract submitted for review on August 8, 2013 is deemed certified.
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Source: CFTC.gov
T. Rowe Price Asks SEC to Approve Actively Managed ETF
September 24, 2013--T. Rowe Price Group Inc. (TROW) has asked the U.S. Securities and Exchange Commission for permission to offer actively managed exchange-traded funds that wouldn't disclose their holdings daily.
The first of the funds, if approved by regulators, would aim to beat the Standard & Poor’s 500 Index, according to the request, filed yesterday with the SEC. T. Rowe Price, based in Baltimore, joins BlackRock Inc. (BLK) and Eaton Vance Corp. (EV) among money managers seeking the go-ahead to offer so-called non-transparent active ETFs.
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Source: Bloomberg
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly-US ETP assets reach new record high amid Fed's no-taper
September 23, 2013--Data in this report is as of Fri, Sep 20
Market and Net Cash Flows Review
Global markets rose on Wednesday's news that the Federal Reserve will maintain its $85bn-a-month bond-buying program. The US (S&P 500) rose by 1.30%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) soared by 2.81% and 2.72%, respectively.
In the meantime, performance was positive across US sectors. Industrials (+1.94%) and Utilities (+1.82%) recorded the biggest gains; moving into other asset classes, the DB Liquid Commodity Index fell by 1.10%. Similarly, the Agriculture sector (DB Diversified Agriculture Index), the WTI Crude Oil, Gold and Silver prices fell by 1.26%, 3.27%, 0.03% and 1.99%, respectively; The 10Y US Treasury Yield dropped 15bps ending at 2.75%. Meanwhile on the FX side the USD strengthened against all major currencies.
The Euro, the British Pound, the Swiss Franc and the Japanese Yen depreciated 1.73%, 0.82%, 2.09% and 0.02%, respectively. Last but not least, Volatility (VIX) dropped by 7.34% during the same period.
The total US ETP flows from all products registered $21.9bn (+1.4% of AUM) of inflows during last week vs. $17.6bn (+1.2%) of inflows the previous week, setting the YTD weekly flows average at +$3.4bn (+$129.7bn YTD in total cash flows).
Equity, Fixed Income and Commodity ETPs experienced flows of +$21.3bn (+1.8%), +$0.5bn (+0.2%) and -$0.1bn (-0.1%) last week vs. +$17.0bn (+1.5%), +$0.9bn (+0.3%) and -$0.4bn (-0.5%) in the previous week, respectively.
Top 3 ETPs & ETNs by inflows: SPY (+$5.9bn), IWM (+$1.5bn), EEM (+$1.5bn)
Top 3 ETPs & ETNs by outflows: DIA (-$0.7bn), IDU (-$0.4bn), TLT (-$0.2bn)
New Launch Calendar: income
There was one new ETN listed during the previous week on the NYSE Arca. UBS launched a new product (DVHI) that offers access to income through a diversified basket of securities.
Turnover Review: Floor activity increased by 36%
Total weekly turnover increased by 35.9% to $350.1bn vs. $257.7bn from the previous week; Furthermore, last week's turnover level was 29.9% over last year's weekly average. Equity, Fixed Income and Commodity ETPs turnover increased by $79.8bn (+35.1%), $6.2bn (+34.2%) and $5.7bn (+55.6%) during the same period, respectively.
Assets under Management (AUM) Review: assets reach new record high
US ETP assets rose by $44.4bn (+2.9%) totaling $1.567 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +17.5% YTD. Assets for Equity, Fixed Income and Commodity ETPs rose by $40.0bn, $2.9bn and $1.3bn during last week, respectively.
visit https://eqindex.db.com/etf/ for more info
Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
