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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
August VIX Futures Trading Volume Rises 5% From August 2011
Year-To-Date VIX Futures Average Daily Volume 58% Ahead of Same Period One Year Ago
September 4, 2012--The CBOE Futures Exchange, LLC (CFE(R)) today announced that trading volume in futures on the CBOE Volatility Index(R) (the VIX(R) Index) during August 2012 totaled nearly two million contracts, five percent ahead of August 2011 and nearly even with July 2012.
August 2012 average daily volume (ADV) in VIX futures was 83,016 contracts, an increase of five percent from 79,402 contracts ADV in August 2011. August 2012 average daily volume decreased by nine percent when compared to ADV of 91,140 contracts in July 2012.
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Source: CBOE Futures Exchange, LLC
ISE Reports Business Activity for August 2012
September 4, 2012--ISE was the second largest equity options exchange in August with market share of 17.9%,excluding dividend trades.
Dividend trades made up 5.1% of industry volume in August 2012.
The International Securities Exchange (ISE) today reported average daily volume of 2.1 million contracts in August 2012. This represents a decrease of 48.2% compared to August 2011, which was a month of exceptionally high volatility. Total options volume for the month was 49.1 million contracts. ISE was the second largest U.S. equity options exchange in August with market share of 17.9%*.
Business highlights for the month of August include:
On August 14, 2012, ISE completed the roll out of Implied Order functionality for all products in its complex order book. Implied Orders significantly enhance ISE’s industry-leading complex order book by enabling greater interaction of multi-legged orders with the regular order book.
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Source: International Securities Exchange (ISE)
Russell flop sparks fear of ETF malaise
September 3, 2012--In early 2010, Russell Investments, the fund manager and compiler of market indices, hired two stars of the exchange-traded fund industry who had pioneered the cheap index tracking products at the iShares franchise.
Following the likes of BlackRock and State Street, Russell was betting that investors would seek nimble strategies to trade in and out of markets after the financial crisis. Barely two years later, Russell has announced the closure of its passive funds business.
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Source: FT.com
ISE Weekly Listings August 31, 2012
August 31, 2012--The International Securities Exchange listed new options classes during the week beginning August 27, 2012 as described below.
Effective Monday, August 27, 2012, the ISE listed options on the following product(s) along with their related symbol(s):
Bin 10 - Morgan Stanley & Co. LLC
Equity
MEMC Electronic Materials Inc. (Symbol: WFR, Trading Symbol(s): WFR) will trade on a January expiration cycle with exercise and position limits of 250000.
Source: International Securities Exchange (ISE)
