Americas ETP News
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8.7 billion net inflows into ETFs and ETPs listed in the United States in February 2013 show a continuation of the rotation into equities
March 6, 2013--In February 2013, Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) listed in the United States had net inflows of $8.7 billion, according to new research published in the latest ETFGI Global ETF and ETP industry insights.
ETFGI won the Best ETF Research award in 2012 in the ETF Express awards announced on February 28th in London.
Equity ETFs and ETPs gathered the largest net inflows with $9.9 billion, followed by leveraged inverse ETFs and ETPs with $989 million, and active ETFs and ETPs with $656 million, while commodity ETFs and ETPs experienced net outflows with $3.6 billion.
Year to date through end of February 2013, ETFs and ETPs have seen net inflows of $37.9 billion. Equity ETFs and ETPs gathered the largest net inflows year to date with $38.1 billion, followed by leveraged inverse ETFs and ETPs with $2.1 billion, and active ETFs and ETPs with $1.7 billion, while commodity ETFs and ETPs experienced net outflows year to date of $4.2 billion.
“The flows into equity ETFs and ETPs show investors are rotating out of cash and fixed income into equities as investor confidence continues to improve,” says Deborah Fuhr, Managing Partner at London-based ETFGI.
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Source: ETFGI
ETF Investors Are Dumping Gold as if the 12-Year Bull is Dead
March 6, 2013--How big are the recent outflows from gold exchange-traded funds? Let us count the ways.
South Korea’s central bank bought 20 tons of gold in February, which sounds like a lot. But it’s less than one-fifth what exchange-traded fund investors sold over the same time frame, according to Commerzbank’sstrategists.
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Source: Barron's
DB-Synthetic Equity & Index Strategy -North America-House View Update as of March 6th, 2013
March 6, 2013--House View Update as of March 6th, 2013
Positioning for USD strength comeback, removing EUR and Gold
Market Performance
Since the launch of our House View portfolio (HVP) on October 2, 2012, the US equity market (SPY) is up by 7.8%, while the US Fixed Income market (BND) and the Commodity market (DBC) have lost 0.44% and 6.2%, respectively.
Model Performance
Our HVP is up by 3.62% since its launch, and 1.09% higher since the last rebalancing on Feb 7, 2013. In the meantime, the equity market and our multi asset class benchmark are also up by 7.8% and 2.5% since the launch of our HVP, respectively.
Portfolio Updates and New Membership
We added a new FX position focusing on the strengthening of the USD. We decided to allocate 10% to this new position funded by eliminating our previous FX (EURUSD, 5%) and commodity (Gold, 5%) positions.
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Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
ISE Launching Second Options Exchange
March 5, 2013--International Securities Exchange Holdings plans to start a second options market, to be called Topaz Exchange, according to filings with the Securities and Exchange Commission. If approved it will be the twelfth U.S. exchange for equity derivatives.
The operator of the third-largest individual exchange for U.S. options will own the Topaz venue, according to a filing with the Securities and Exchange Commission published on March 1.
Gary Katz, president and chief executive officer of the International Securities Exchange, said it would start a second market to compete with rivals CBOE Holdings Inc., Nasdaq OMX Group Inc. and NYSE Euronext a year ago, according to Bloomberg News, which first reported the base filing.
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Source: Traders Magazine
SEC Publishes ISE's Form 1 Application for a Second Options Exchange
March, 5, 2013--International Securities Exchange Holdings, Inc. (ISE) announced that the U.S. Securities and Exchange Commission (SEC) has published for comment a Form 1 application for ISE's second options exchange.
The new options Exchange is anticipated to be launched in Q2 2013, pending SEC approval. The publication of the Form 1 application represents an important milestone in the process of launching ISE’s second options exchange, which will leverage the existing technology backbone and established member connectivity of ISE’s existing options exchange.
“We are grateful that the SEC has moved forward with the publication of the Form 1 application and we look forward to launching our second exchange soon,” said Gary Katz, President and Chief Executive Officer of ISE. “The new Exchange will enable us to build upon our strong, well-established technology foundation and offer our members a choice in fee and market structure.”
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Source: International Securities Exchange (ISE)
CBOE And C2 Plan To Launch Mini-Options On March 18 For AAPL, AMZN, GOOG, GLD And SPY
March 5, 2013--CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that Chicago Board Options Exchange, Incorporated (CBOE) and C2 Options Exchange (C2) plan to launch trading in "mini-options" that are one-tenth the size of standard options on five popular stocks and exchange traded funds (ETFs).
Mini-options on Apple (AAPL), Amazon (AMZN), Google (GOOG), the SPDR Gold Trust ETF (GLD), and the SPDR S&P 500 ETF Trust (SPY) will begin trading on Monday, March 18.
"Many retail customers hold less than 100 shares of these higher-priced stocks in their portfolios," CBOE Chairman and CEO William J. Brodsky said. "We're excited to begin offering mini-options, which will give investors the ability to hedge their positions and trade options on these stocks more economically than with standard-sized options."
Mini-options contracts feature specifications identical to those of standard-sized options contracts on the above securities, except:
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Source: CBOE
Market Vectors Emerging Markets Local Currency Bond ETF (EMLC) Passes $1.5 Billion Mark
Strong emerging market fundamentals coupled with perceived weakness in developed market currencies have driven interest in EMLC, the first U.S.-listed ETF to provide exposure to local currency EM bonds
March 5, 2013-Market Vectors Emerging Markets Local Currency Bond ETF (NYSE Arca: EMLC), has surpassed $1.5 billion in assets under management (AUM), it was announced today.
EMLC has seen an increase of more than $500 million in AUM in the last three months.
“Many local currency-denominated emerging market bonds are currently delivering more attractive yields than traditional fixed income investments, while at the same time offering currency and credit fundamentals that appear to be on more solid footing than fixed income investments denominated in U.S. Dollars, Euros or the Yen,” said Fran Rodilosso, fixed income portfolio manager at Market Vectors ETFs and one of two EMLC portfolio managers. “EMLC offers an excellent way to gain exposure to this space and the list of constituent countries in the Fund’s underlying index has been growing, with Romania and Nigeria having been recently added.”
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Source: Market Vectors ETFs
New Research from Global X Funds Examines the Case for High-Dividend Equity Investments
Investment study shows high-dividend stocks often perform better with less volatility
MArch 14, 2013--Global X Funds, a New York sponsor of innovative exchange traded funds (ETFs) is pleased to announce the results of its new study examining the performance and relative volatility of high dividend-paying stocks over time.
According to the new research, dividend-paying stocks outperformed non-dividend payers, while higher yielding companies generally provided higher risk-adjusted returns.
The firm’s new research paper, “High Dividends: Myth vs. Reality,” provides new research on volatility and addresses common misconceptions surrounding high dividend-paying stocks. It can be accessed via the firm’s website here.
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Source: Global X
NASDAQ OMX-How Will Sequestration Affect the Defense Industry
March 4, 2013-Sequestration, a process that automatically cuts the federal budget across most departments and agencies, took effect on Friday, March 1, 2013, as Congress and President Obama failed to reach an accord. The $1.2 trillion in cuts will be phased in with half the cuts focused on the Department of Defense (DoD) budget.
The first phase of the cuts in 2013 will remove $85 billion,
which pulls $46 billion from the DoD budget.
Sequestration has been in the news for months as the public has speculated that Congress would be unable to prevent these large scale cuts. Yet
the equity markets were not negatively impacted, and we’ve seen a strong start to 2013. In fact, the NASDAQ U.S. Benchmark Index (NQUSB) has
gained 6.71% since January 1, and the individual sector with the highest exposure to the government cuts, Defense, has also faired exceptionally
well with a gain of 6.90%. Will the Defense sector be able to maintain its performance streak into 2013 as these cuts begin to be implemented?
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Source: NASDAQ OMX
Morgan Stanley-US ETF Weekly Update
March 4, 2013--US ETF Weekly Update
Weekly Flows: $2.7 Billion Net Inflows
ETF Assets Stand at $1.4 Trillion, up 5% YTD
Three ETF Launches Last Week
Direxion Announces Share Splits
State Street Announces Changes to Infrastructure ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $2.7 bln last week
Last week's net flows were driven by US Large-Cap ETFs (+$2.5 bln) on the plus side and Commodity ETFs (-$1.4 bln) on the negative; 11 out of the 15 categories exhibited net inflows
ETF assets stand at $1.4 tln, up 5% YTD; $37.6 bln net inflows YTD
13-week flows were mostly positive among asset classes; combined $66.2 bln in net inflows
International Equity ETFs have posted net inflows of $31.2 bln over the last 13 weeks, which equates to 47% of ETF net inflows over this period, while the segment accounts for only 22% of ETF market cap
Commodity and Currency ETFs are the two categories that we measured to exhibit net outflows over the last 13 weeks (combined $4.3 bln in net outflows)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
The top 3 ETFs to post net inflows last week track the S&P 500, generating a combined $3.3 bln in net inflows
Not only did the ETFs that track the S&P 500 Index have a strong last week, over the past 13 weeks they have posted a combined $12.1 bln in net inflows (18% of all ETF net inflows)
Despite a difficult last week, the iShares MSCI Emerging Markets Index Fund (EEM) has generated net inflows of $7.5 bln over the last 13 weeks, the most of any ETF
The SPDR Gold Trust (GLD) has not posted a weekly net inflow in 13 weeks and over this time period has exhibited net outflows of $5.1 bln; GLD’s market cap has declined from $74.3 bln to $63.5 bln over the past 13 weeks
US-Listed ETFs:
Short Interest
Data Updated: Based on data as of 2/15/13
SPDR S&P 500 ETF (SPY) had the largest increases in USD short interest at $2.1 bln
Notably, the SPDR Barclays High Yield Bond ETF (JNK) exhibited its highest level of shares short since inception; JNK had 26.2
mln shares short as of the period ended 2/15/13, up 82% since the last period
Aggregate ETF USD short interest increased by $4.3 bln over the period ended 2/15/13 and has now increased $7.0 bln the last two periods; despite the increase in short interest, financial markets have remained resilient
The average shares short/shares outstanding for ETFs is currently 4.8%
Interestingly, the top 10 ETFs most heavily shorted as a % of shares outstanding does not change much; certain areas of the market
such as retail, currency, and real estate seem to consistently make the list
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only four ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
Source: Bloomberg, Morgan Stanley Smith Barney Research.
Data estimated as of 3/1/13 based on daily change in share counts and daily NAVs.
$10.2 billion in total market cap of ETFs less than 1-year old
Newly launched Active ETFs account for 51% of the market cap of ETFs launched over the past year; PIMCO Total Return ETF (BOND) is the largest actively managed ETF with a market cap of $4.4 bln; BOND hit its one-year anniversary on 3/1
Issuance is off to a slow start in 2013; 15 new ETF listings and 16 closures YTD (nine announced closures)
The top 10 most successful launches make up 74% of the market cap of ETFs launched over the past year
Six different ETF sponsors and two asset classes represented in top 10 most successful launches
Seven out of the 10 most successful launches over the past year have an income orientation
The First Trust Multi-Asset Diversified Income Index Fund (MDIV) cracked the top 10 most successful launches last week; MDIV has a market cap of $147 mln and has benefitted from the search for yield; MDIV owns dividend-paying equities, REITs,
MLPs, preferreds, and high yield debt
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Source: Morgan Stanley
