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CFTC.gov Commitments of Traders Reports Update
September 7, 2012--The current reports for the week of Setpember 4, 2012 are now available.
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Source: CFTC.gov
ISE Introduces 50 cent strike price intervals in weekly options
September 7, 2012--The International Securities Exchange (ISE) today announced that it has received SEC approval to introduce $0.50 strike price intervals in weekly options. The exchange began listing weekly options in the more granular $0.50 strikes yesterday, offering an expanded range of strike prices and potentially a lower cost of entry to investors who are using weekly options to effect their trading and hedging strategies.
This new program extends to weekly options classes that currently trade in one dollar increments, and all other contract terms remain unchanged.
“The weekly options program has become one of the most popular product offerings and strongest growth areas since its industry-wide expansion two years ago,” said Boris Ilyevsky, Managing Director of ISE’s options exchange. “The introduction of $0.50 strike price intervals will attract further interest from investors who are seeking greater trading opportunities and the ability to more closely tailor their investment and risk management strategies.”
The new program will apply to the ninety-three underlyings with weekly options classes that trade in dollar strike price intervals. Weekly options currently represent approximately 11.7 percent* of industry-wide options volume.
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Source: International Securities Exchange (ISE)
RBS PLC Launches The RBS US Large Cap Alternator Exchange Traded Notes
September 7, 2012--RBS Securities Inc. (RBSSI) today announced the launch of the eighth exchange traded product in its growing suite of Exchange Traded Notes (ETNs). The RBS US Large Cap Alternator Exchange Traded NotesTM will be issued by The Royal Bank of Scotland plc (RBS) and will be listed on NYSE Arca, Inc. under the ticker "ALTL."
The RBS US Large Cap Alternator Exchange Traded Notes (NYSEArca:ALTL) are designed for investors who seek exposure to the RBS US Large Cap Alternator Index (USD) (the “Index”), an index that utilizes a relative strength strategy to provide exposure to either the SP 500® Total Return Index, the SP 500® Low Volatility Total Return Index or the SP 500® Equal Weight Total Return Index, depending on the relative performance of the three underlying indices based on their average historical returns.
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Source: RBS Markets International Banking (MIB)
SEC Reschedules Date of Market Technology Roundtable
September 6, 2012--The Securities and Exchange Commission today announced that its market technology roundtable, which was scheduled for Sept. 14, will be held on Oct. 2.
The change was made to accommodate scheduling conflicts and to better respond to strong interest from individuals and groups wishing to participate in the roundtable discussion.
The roundtable at the SEC’s Washington, D.C. headquarters is open to the public and will be webcast. As previously announced, the event will begin with a discussion on preventing errors, focusing on current best practices and practical constraints for creating, deploying, and operating mission-critical systems, including those used to automatically generate and route orders, match trades, confirm transactions, and disseminate data. The afternoon session will focus on error response, with experts discussing how the market might employ independent filters, objective tests, and other real-time processes or crisis-management procedures to detect, limit, and possibly terminate erroneous market activities when they occur, thereby limiting the impact of such errors.
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Source: SEC.gov
Global ETF and ETP assets reach new high of over US$1.7 trillion
September 6, 2012--Data from the latest monthly 'ETFGI Global Industry Insights' report published today by ETFGI LLP, an independent research and consulting firm covering the global ETF and ETP industry ('ETFGI'), reveals that global assets invested in ETFs and ETPs at the end of August reached an all-time high of over US$1.7 trillion (US$1,762 Bn).
Over the past 10 years the compounded annual growth rate (CAGR) of these products globally has been 26.5%. There are currently 4,713 ETFs and ETPs, with 9,620 listings, assets of US$1,762 Bn, from 204 providers on 56 exchanges.
The challenging market conditions currently and over the past few years, combined with the difficulty in finding active managers that consistently deliver alpha, have caused investors to embrace the use of ETFs and ETPs. ETFs provide greater transparency in relation to costs, portfolio holdings, price, liquidity, product structure, risk and return compared to many other investment products and mutual funds.
ETFs are typically open-ended, index-based funds, with active ETFs accounting for less than 1% market share. They can be bought and sold like ordinary shares on a stock exchange and offer a broad exposure across developed, emerging and frontier markets, equities, fixed income and commodities. ETFs are used widely by institutional and increasingly by financial advisors and retail investors to:
equitize cash
implement diversified exposure to a market
comprise a core or satellite investment
be a long term strategic investment
implement tactical adjustments to portfolios
use as building blocks to create entire portfolios
allow investors to hedge the market
use as an alternative to futures and other derivative products
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Source: ETFGI
JPMorgan flip flops on commodity ETFs
September 6, 2012--Will JPMorgan's planned physical copper exchange-traded fund "wreak havoc" on the global economy?
For the first time since a group of US copper consumers, a large copper trader, and Senator Carl Levin launched a fierce attack on the product in May, JPMorgan has responded. Unsurprisingly, the bank argues that the new copper ETF would have no untoward effects on the global economy; more surprisingly, it says that physical metal ETFs have no impact on prices at all.
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Source: FT.com
Global X Funds, the New York based provider of exchange traded funds launches the Global X Junior Miners ETF
September 6, 2012--Global X Funds, the New York based provider of exchange traded funds, today launched the Global X Junior Miners ETF (NYSE Arca: JUNR).
It is the first ETF to provide access to junior mining companies globally, and adds diversification across resources by including companies involved in the production of coal, copper, gold, iron, nickel, silver, titanium and other materials.
The mining industry relies on junior mining companies to provide additional supply of key commodities – as large miners exhaust existing resources, junior miners are often poised to explore, develop, and monetize new mines to bring additional supply to the market. While junior miners typically have a higher risk/reward profile than large-cap miners, JUNR helps reduce company-specific risk by diversifying investments across 96 junior mining companies.
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Source: Global X
Morgan Stanley-Quarterly Report: $1.2 Trillion in 1.255 ETFs
September 5, 2012--The following publication is the quarterly report on US-listed
ETFs. It includes a summary of investment applications, excerpts
from strategy reports, the outlook for related markets, index
data, and individual profiles for the 313 ETFs in the coverage
universe, which represents 92% of US-listed ETF assets.
ETF assets are up 17% YTD amid solid flows and strong equity
markets. Through the first six months of the year, ETFs posted net
inflows of $77.6 billion and are on track for their best year since
2008. Historically, ETFs post their largest net inflows during the
fourth quarter of the year. We currently stand at $1.2 trillion in
assets spread among 1,255 products. New issuance has been robust
this year with 124 ETFs coming to market, 30 of them fixed income.
Notably, 35 ETFs have closed so far this year and an additional 34
have announced liquidation dates.
ETFs provide access to many favored market segments. Morgan
Stanley & Co.’s global strategy team believes the risk rally is in its
final stage amid tepid macro data, declining growth forecasts,
mediocre corporate profits, and falling earnings expectations.
Longer term, the team maintains a preference for emerging markets
over developed markets. We list favored areas in the report and
ways to implement these ideas via ETFs.
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Source: Morgan Stanley
BlackRock stock undervalued even if ETF fees cut, analyst says
September 5, 2012--Shares of BlackRock, the world's largest money manager, are undervalued by about 20 percent even if the firm has to cut fees on its popular iShares line of exchange-traded funds, according to an analyst report issued on Wednesday.
New York-based BlackRock has been losing ETF market share to lower-priced funds from Vanguard Group for several years. Chief Executive Laurence Fink said in July that BlackRock had a plan in the works to combat Vanguard but provided no details.
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Source: Chicago Tribune
Morgan Stanley-ETF Weekly Update
September 4, 2012--Weekly Flows: $2.0 Billion Net Inflows
ETF Assets Stand at $1.2 Trillion, up 17% YTD
One ETF Launch Last Week
ProShares Announces Reverse Split on VIX ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $2.0 bln last week, the fifth consecutive week of net inflows
Fixed Income ETFs generated net inflows of $1.2 bln last week, the most of any category (Fixed Income ETFs have posted net
inflows 54 of the past 55 weeks)
ETF assets stand at $1.2 tln (up 17% YTD) and have posted net inflows 27 out of 35 weeks YTD ($92.5 bln in net inflows)
13-week flows were mostly positive among asset classes; combined $35.6 bln net inflows
All but two categories exhibited net inflows over the past 13 weeks (US Mid-Cap and Currency ETFs had net outflows of merely $486 mln combined)
Over the last 13 weeks, 41% of ETFs had net inflows/35% had net outflows/24% had no net flows
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares Barclays TIPS Bond Fund (TIP) generated net inflows of $314 mln last week, the most of any ETF
The iShares Russell 2000 Index Fund (IWM) exhibited net outflows of $416 mln last week, the most of any ETF; IWM has posted net outflows of $271 mln YTD and outflows coincide with small-cap underperformance relative to large-caps
Fixed Income ETFs have benefitted as investors have continued to search for yield; in particular, the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD) and the iShares iBoxx $ High Yield Corporate Bond Fund (HYG) have posted a combined $3.8
bln in net inflows over the last 13 weeks
US-Listed ETFs: Short Interest Data Unchanged: Based on data as of 8/15/12
SPDR S&P 500 ETF (SPY) had the largest increase in USD short interest at $1.6 bln
SPY’s short interest increased for the first time since 5/31/12, however its 213 mln shares short is well below its 52-week average of 335 mln shares short
Aggregate ETF USD short interest increased $104 mln over the past two weeks ended 8/15/12
The average shares short/shares outstanding for ETFs is currently 5.2%
Out of the 10 ETFs with the highest % of shares short, five of them have market caps less than $20 mln, and in our view skewing the impact of the exhibit
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only six 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 8/31/12 based on daily change in share counts and daily NAVs.
$9.1 billion in total market cap of ETFs less than 1-year old
Over the past 13 weeks, newly launched Active ETFs generated most net inflows at $1.3 bln (specifically the PIMCO Total Return ETF-BOND)
125 new ETF listings and 35 closures YTD (additional 34 liquidations have been announced)
Notably, nine out of the 37 ETF sponsors have liquidated/slated to liquidate ETFs this year; one issuer (FocusShares) shuttered its entire line-up
Over the past year, many of the successful launches have an income/defensive orientation
Five different ETF sponsors and three asset classes represented in top 10 most successful launches
Top 10 most successful launches account for 69% of market cap of ETFs launched over the past year
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Source: Morgan Stanley
