Americas ETP News
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CBOE sues ISE for $525 mln over options trading system
November 13, 2012--The Chicago Board Options Exchange has sued International Securities Exchange LLC for at least $525 million, accusing its rival of infringing three patents related to an automated options trading system.
In a complaint filed on Monday in the U.S. District Court in Chicago, CBOE said the patents were issued in 2008, 2011 and 2012, and cover systems to monitor quote risk and automatically adjust quotes when risk exposure gets too high.
The Chicago-based unit of CBOE Holdings Inc said these methods are "crucial to market maker participation" and that ISE, a unit of Deutsche Boerse AG, has deprived it of profit and royalties by infringing its patents.
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Source: Thomson Reuters
New World Bank Report Finds 50 Percent Increase in Middle Class in Latin America and the Caribbean over Last Decade
Bank President Kim says world can learn from government policies that increased wealth for tens of millions
November 13, 2012-- A new World Bank report released today found that Latin America and the Caribbean registered a 50 percent jump in the number of people joining the middle class during the last decade, which was called by economists an historic achievement for a region long riven by wealth inequality.
The report, called “Economic Mobility and the Rise of the Latin American Middle Class’’, found that the middle class in the region grew to an estimated 152 million in 2009, compared to 103 million in 2003, an increase of 50 percent.
“The recent experience of Latin America and the Caribbean shows the world that policies balancing economic growth while still expanding opportunities for the most vulnerable can spread prosperity to millions of people,” said World Bank President Jim Yong Kim. “Governments in Latin America and the Caribbean still need to do much more – one third of the population is still in poverty – but we should celebrate this achievement of growing the middle class and learn from it.”
view the World Bank report-Economic Mobility and the Rise of the Latin American Middle Class
Source: World Bank
SEC releases study on proposed copper ETFs' impact on copper prices
November 13, 2012--A group of four copper fabricators and a copper merchant have been fighting tooth-and-nail since the spring to keep the Securities and Exchange Commission (SEC) from approving two proposed ETFs (exchange-traded funds) that would invest in physical copper.
They fear that the investment products would hoard copper, driving up the price to the benefit of their investors, but to the detriment of industrial users.
Nothing has been decided yet. The SEC won’t rule on the two ETFs until December. One is being proposed by JPMorgan, and the other by Blackrock’s iShares.
view the SEC Study
Source: TedMagazine
iShares files with the SEC-iShares 2023 Investment Grade Corporate Bond ETF
November 13, 2012--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares 2023 Investment Grade Corporate Bond ETF.
view filing
Source: SEC.gov
ETF Fervor Shifts to Loans as Bonds Lose Luster: Credit Markets
November 13, 2012--Exchange-traded funds that amassed junk bonds at a record pace in the first half of 2012 are now attracting unprecedented cash to buy speculative-grade loans as investors wager that a four-year rally in the notes is ending.
Blackstone Group LP (BX), the world’s largest private-equity firm, is planning its first ETF that will mostly buy loans, and Pyxis Capital LP, spun off from Highland Capital Management LP, announced its first such fund last week. Invesco Ltd.’s PowerShares Senior Loan (BKLN) fund, started two years ago as the first ETF solely dedicated to loans, has grown to become the third- biggest speculative-grade debt ETF with $1.2 billion of assets.
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Source: Bloomberg
DB-Synthetic Equity & Index Strategy-North America-Weekly ETF Market Review- ETP assets retreat from the $1.3 trillion mark on market pullback
November 13, 2012--Market and Net Cash Flows Review as of Friday, Nov 9th, 2012
US Equity markets plunged across the board last week. The S&P 500 lost 2.43%, with all 10 sectors going into red numbers during the period.
Utilities and Financials suffered the most, dropping 4.62% and 3.10%, respectively.
Markets outside the US were down in a similar way. The flight to safety triggered by the sell-off following President Obama’s reelection prompted a rally within rates, with the 10Y US Treasury Yield dropping by 14 bps and some products tracking 20Y+ treasuries gaining more than 3% during the week. Commodities were mostly positive, driven mainly by the Precious Metals and Energy space, where Gold, Silver, and WTI Crude Oil recorded gains of 3.16%, 5.46%, and 1.43%, respectively. At the same time, the USD strengthened against most of the majors and Volatility rose by 5.8%.
The total US ETP flows from all products registered $2.42bn (+0.2% of AUM) of inflows during last week vs $5.15bn (+0.4%) of inflows the previous week, setting the YTD weekly flows average at +$3.1bn (+$138.35bn, +13.2% YTD in total cash flows).
Equity, Fixed Income, and Commodity ETPs experienced flows of +$0.96bn (+0.1%), +$1.07bn (+0.4%), +$0.37bn (+0.3%) last week vs. +$2.78bn (+0.3%), +$2.33bn (+0.9%), +$0.01bn (+0.0%) in the previous week, respectively.
Among US sectors, Industrials (+$0.22bn, +3.9%) and Materials (+$0.14bn, +2.0%) received the most significant flows.
In the equity space, Large Cap ETFs experienced $1.9bn (-0.9%) in outflows; while Emerging Markets (+$0.7bn, +0.7%) and Value (+$0.4bn, +0.9%) ETFs saw the largest inflows. In the debt space, Sovereign products gathered most of the inflows (+$0.8bn, +1.3%). Within Commodity products, flows were driven by Precious metals with +$0.3bn (+0.3%).
Top 3 ETPs & ETNs by inflows:
EEM (+$0.9bn), TLT (+$0.3bn), GDX (+$0.3bn)
Top 3 ETPs & ETNs by outflows:
SPY (-$2.1bn), VWO (-$0.3bn), AGG (-$0.2bn)
New Launch Calendar: income generation with senior loans
Last week Pyxis Funds launched their first ETF (SNLN), the new fund was listed on the NYSE Arca and offers exposure to a portfolio of senior loans.
Turnover Review: Floor activity gets back to pre-hurricane levels
Total weekly turnover increased by 95.5% to $313bn vs. $160bn from the previous week. However, last week's turnover level was still 17% below last year's weekly average. Equity, Fixed Income and Commodity ETPs turnover increased by $137bn (+98%), $7.1bn (+64%) and $7.4bn (+93%), respectively.
Assets under Management (AUM) Review:
ETP assets shy away from peak
Markets weighed on ETF assets, pushing them down by 0.9% (-$11.9bn) to $1.26 trillion. As of last Friday, US ETPs have accumulated an asset growth of 20.5% YTD. Assets for equity, fixed income and commodity ETPs moved -$16.6bn, +$1.4bn, +$3.3bn during last week, respectively.
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Source: Deutsche Bank - Synthetic Equity & Index Strategy -North America
FINRA Increases Transparency in the TBA Market for Agency Pass-Through Mortgage-Backed Securities
October 13, 2012--The Financial Industry Regulatory Authority (FINRA), on Monday November 12, significantly increased transparency in the so-called "To-Be-Announced" (TBA) market for agency pass-through mortgage-backed securities.
This market represents more than $270 billion traded on an average daily basis in 8,400 trades. Through the Trade Reporting and Compliance Engine (TRACE), FINRA has begun disseminating TBA transaction information, including the CUSIP, time of transaction, price, size and other related information.
In addition to the TBA market, the SEC has approved a FINRA proposal to publicly disseminate transaction information in agency pass-through mortgage-backed securities traded "specified." This market represents approximately $19 billion traded on an average daily basis in 3,000 trades.
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Source: FINRA
Interactive Data Introduces New Suite of ETF Web Tools
ETF Tools Provide Extraordinary ETF Analysis and Publishing Capabilities to Advisory, Brokerage, ETF Issuer and Media Firms
November 13, 2012--Interactive Data Corporation, a leading provider of ETF valuations and hosted web services, today announced the launch of its new white label suite of ETF web tools.
The new tools help advisors and investors analyze, build and promote investment strategies using ETFs.
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Source: Interactive Data Corporation
New ETF starts trading on BM&FBOVESPA
November 12, 2012--A new exchange-traded fund (ETF) is available for trading on BM&FBOVESPA. XBOV11 is indexed to the Bovespa Index-Ibovespa, which tracks the performance of the shares issued by leading electric, water and sewage, and gas utilities.
The ticker symbol of the new ETF called CAIXA ETF Ibovespa Index Fund (XBOV) is: XBOV11.
The XBOV11 brings the number of ETFs traded on BM&FBOVESPA to 15. Seven of these are broad indices (of which two for the Ibovespa, one the IBrX-100, one the IBrX-50, one Mid-Large Cap, one Small Cap and one the Dividends Index); five are sectorial indices (Consumption, Real Estate, Financial, Basic Materials and Public Utility);
view the BM&FBOVESPA October 2012 ETF report
Source: BM&FBOVESPA
DB-Synthetic Equity & Index Strategy-North America-Monthly ETF Market Review-Rotation among risky assets, but no flight to safety
November 12, 2012--US ETP assets fell by 1.0% in October
ETP assets in the US dropped by $12.2bn to $1.27 trillion (YTD + 21.6%) last month.
Global ETP industry assets pulled back to $1.74 trillion, or 21.5% up YTD.
Investor flows suggest slight de-risking during October
US ETP flows experienced inflows of $2.8bn during October (+$133.6bn YTD, 12.8% of last year’s AUM).
Within long-only ETPs, total flows were +$2.8bn in October vs. +$35.4bn in September.
Equity, Fixed Income, and Commodity long-only ETPs experienced cash flows of -$4.7bn, +$5.9bn, and +$1.9bn, respectively.
After a couple of months of strong risk-on momentum, investors booked profits during October by pulling out from US-focused Equity products (-$11.8bn). In addition, flows suggest that the appetite for risky assets also decreased within the Credit space with HY ETF flows ending about flat and IG fund flows attracting most of the new assets (+$4.0bn). However the flow figures don’t suggest a straight flight to safety, but rather a rotation within risky assets coupled with a search for downside protection. For example, Corporate debt products (+$3.3bn) were preferred over Sovereign (-$0.6bn); and within equity, international exposure ETFs still received strong inflows such as the $1.3bn received by China-focused products.
New Launch Calendar: Core equity allocations and quant strategies
There were eleven new ETFs and two new ETNs listed during the previous month. Twelve of them were listed in the NYSE Arca, with the remaining one in the NASDAQ. The new products were mostly focus on core equity exposure across regions and quantitative strategies.
Turnover Review: Floor activity increased by 6%
ETP turnover totaled $1.08 trillion last month, up by 5.8% (+$59.4bn) from the previous month figure of $1.02 trillion, but still 34% below last year’s monthly average of $1.65 trillion.
ETP trading made up 25.4% of all US cash equity trading in October, down from last year’s peak of 37.5% in August, and still below its 3-year monthly average of 29.0%.
Equity and Fixed Income ETPs turnover rose by $73.2bn or 8.4% and $4.0bn (6.0%), respectively; meanwhile Commodity ETPs turnover fell 20.9% (-$15.3bn) during last month.
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Source: Deutsche Bank - Synthetic Equity & Index Strategy -North America
