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Morgan Stanley-US ETF Weekly Update
October 21, 2013--US ETF Weekly Update
Weekly Flows: $14.6 Billion Net Inflows
ETFs Have Exhibited Net Inflows of $137.9 Billion YTD
ETF Assets Stand at $1.6 Trillion, up 20% YTD
Four ETF Launches Last Week
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $14.6 bln last week amid government reopening and the raising of the debt ceiling
Last week's net inflows were led by US Large-Cap ETFs at $9.1 bln; specifically, the SPDR S&P 500 ETF (SPY) generated $7.9 bln in net inflows in this category
ETFs have exhibited net inflows 28 out of 42 weeks YTD
ETF assets stand at $1.6 tln, up 20% YTD; $137.9 bln net inflows YTD
13-week flows remain mostly positive among asset classes; combined $34.2 bln in net inflows
International - Developed ETFs generated net inflows of $18.9 bln over the last 13 weeks, the most of any category we measured; European ETFs or international equity ETFs with significant European exposure were the primary driver to the category's large net inflows
Over the last 13 weeks, Fixed Income ETFs have posted net outflows of $4.5 bln; despite Fixed Income ETF weakness, three funds in the category actually posted $1+ bln net inflows (two focused on floating-rate debt and one on short duration government/credit debt)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $7.9 bln this past week, the most of any ETF
Despite strong net inflows last week, SPY's recent flows have been volatile and directionless
Notably, the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the SPDR Barclays High Yield Bond ETF (JNK), the two largest high yield bond ETFs, generated a combined $933 mln in net inflows last week
The iShares MSCI Emerging Markets ETF (EEM) has posted net inflows of $5.0 bln over the last 13 weeks, the most of any ETF
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume was essentially flat in September relative to August at 27%
Over the past 5 years, ETFs peaked at 36% of listed trading volume in November 2008
ETFs traded $328 bln last week, down $21 bln from the prior week but still 15% above their 13-week average
Leveraged/Inverse ETFs accounted for 9% of volume last week, however, make up only 2% of ETF market cap
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 9/30/13
The SPDR Dow Jones Industrial Average ETF (DIA) had the largest increase in USD short interest at $318 mln
Shares short of the iShares MSCI Emerging Markets ETF (EEM) declined to 74.8 mln from 106.8 mln the prior period; EEM's shares short are at their lowest level since 2/28/13
600 ETFs exhibited short interest declines while 585 experienced short interest increases over the last period
Aggregate ETF USD short interest decreased by $10.5 bln over the period ended 9/30/13
The average shares short/shares outstanding for ETFs is currently 3.9% down from 4.2% last period
For the third straight period, the SPDR Retail ETF (XRT) exhibited the highest shares short as a % of shares outstanding; XRT's shares short are currently 247%, down from last period's 280%
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only five ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
$8.5 bln in total market cap of ETFs less than 1-year old
International Equity ETFs account for 50% of market capitalization of ETFs launched over the past year; specifically International - Emerging ETFs make up 32%
After a month-long lull in issuance from the end of August through the end of September, 19 ETFs have launched over the past four weeks
110 new ETF listings and 43 closures/delistings YTD
The top 10 most successful launches make up 68% of the market cap of ETFs launched over the past year
Five ETF sponsors and two asset classes 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)
Over the last year, BlackRock has launched 24 ETFs and accounts for 59% of all recently launched ETF market capitalization, the most of any sponsor (in terms of both number and market capitalization)
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Source: Morgan Stanley
FRB-Beige Book
October 21, 2013--The Beige Book Reports issued on October 16, 2013, from the twelve Federal Reserve Districts suggest that national economic activity continued to expand at a modest to moderate pace during the reporting period of September through early October.
Eight Districts reported similar growth rates in economic activity as during the previous reporting period, while growth slowed some in the Philadelphia, Richmond, Chicago, and Kansas City Districts. Contacts across Districts generally remained cautiously optimistic in their outlook for future economic activity, although many also noted an increase in uncertainty due largely to the federal government shutdown and debt ceiling debate.
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Source: Federal Reserve.gov
How to Save Your 401(k): Invest in Africa
October 21, 2013--With only 85 days left until the next opportunity for Congress to unleash apocalypse on Wall Street in the form of a debt default, it's a great moment to think about reducing risk in your investment portfolio.
Because bourses worldwide have globalized, a U.S. debt default would almost certainly roil markets from New York to New Delhi. Luckily for the risk-averse, there’s still one set of markets out there that may stay bubo-free when the NYSE catches the plague. If you want to preserve at least a part of your retirement nest egg from Washington-induced calamity, start buying up stocks in Africa
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Source: Bloomberg Business Week
Innovation, diversification and better logistics key to sustainable and inclusive growth, says latest Latin American Economic Outlook
October 18, 2013--After a decade of relatively strong growth, Latin America is facing headwinds associated with declining trade, a moderation in commodity prices and increasing uncertainty over external financial conditions, according to the latest Latin American Economic Outlook jointly produced by the OECD Development Centre, the UN Economic Commission for Latin America and the Caribbean (UN ECLAC) and CAF- Development Bank of Latin America.
The report was released in Panama City during the XXIII Ibero-American summit. Weak economic performance in the euro area, the slowdown in some emerging economies and uncertainty over U.S. monetary and fiscal policy are also weighing on Latin America’s weaker outlook.
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Source: OECD
U.S. Department of the Treasury Economic Statistics-Monitoring the Economy Update
October 18, 2013--The U.S. Department of the Treasury Economic Statistics-Monitoring the Economy report has been updated.
view the US Economic Data-Monthly October 2013
Source: US Department of the Treasury
VIX Creator: Volatility ETPs 'Virtually Guaranteed to Lose Money'
October 18, 2013--Robert E. Whaley is widely credited as the originator of the market's most closely watched "fear index."
It turns out he-s not a fan of owning the most popular exchange-traded funds and notes built around that index.
In a forthcoming paper for the Journal of Portfolio Management, the Vanderbilt University finance professor calls the most popular exchange-traded funds and notes tied to the CBOE Market Volatility Index "not suitable buy-and-hold investments" and “virtually guaranteed to lose money through time."
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Source: Barron's
WisdomTree Launches Germany Hedged Equity Fund (DXGE)
WisdomTree Launches Germany Hedged Equity Fund (DXGE)
DXGE to Provide Exposure to Largest Exporter Nation and Largest Economy in European Monetary Union
WisdomTree Expands Currency Hedged Equity Family of ETFs
October 18, 2013--WisdomTree (Nasdaq:WETF), an exchange-traded fund ("ETF") sponsor and asset manager, today announced the launch of the WisdomTree Germany Hedged Equity Fund (DXGE) on the NASDAQ Stock Market.
DXGE is designed to provide exposure to German equity markets while hedging exposure to the euro and has an expense ratio of 0.48%.
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Source: Wall Street Journal
RevenueShares files with the SEC
October 18, 2013--RevenueShares has filed a first amended and restated application for exemptive relief with the SEC.
view filing
Source: SEC.gov
Capped Component Version of S&P GSCI Single Commodity Family Launched by S&P Dow Jones Indices
October 17, 2013--&P Dow Jones Indices announced today the launch of a family of indices based on the S&P GSCI(R) Single Commodities that applies the Capped Component rules according to the ESMA guidelines on UCITS issues.
Currently, the S&P GSCI includes 24 commodities that form 18 components, where three of the components, Petroleum, Wheat, and Cattle, include more than one commodity. For every S&P GSCI Single Capped Component, the namesake commodity is allocated 32%, with the remaining 68% equally distributed among the remaining commodities in the other components.
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Source: Wall Street Journal
S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices
A Deletion From The S&P/TSX Venture Composite Index
October 17, 2013--S&P Dow Jones Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:
A Plan of Arrangement between Afferro Mining Inc. (TSXVN:AFF) and International Mining and Infrastructure Corp. plc (LSE:IMIC) has been approved.
Afferro shareholders will receive 80p cash and 40p value in a convertible loan note for each common share held. Afferro Mining will be removed from the S&P/TSX Venture Composite Index after close on Friday, October 18, 2013.
Source: S&P Dow Jones Canadian Index Services
