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Morgan Stanley-US ETF Weekly Update
July 16, 2012--US ETF Weekly Update
Weekly Flows: $854 Million Net Inflows
ETF Assets Stand at $1.2 Trillion, up 12% YTD
Three ETF Launches Last Week
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US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $854 mln last week, second straight week of net inflows
Last week’s net inflows were led by US Small- & Micro-Cap ETFs ($1.3 bln in net inflows)
ETF assets stand at $1.2 tln, up 12% YTD; ETFs have posted net inflows 21 out of 28 weeks YTD ($79.1 bln in net inflows YTD)
13-week flows were mostly positive among asset classes; combined $32.6 bln net inflows
Fixed Income ETFs have generated net inflows 47 out of the past 48 weeks ($14.7 bln net inflows over the last 13 weeks)
Emerging Market Equity ETFs exhibited net outflows of $2.7 bln the past 13 weeks, the most of any ETF category
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares Russell 2000 Index Fund (IWM) generated net inflows of $1.2 bln last week, the most of any ETF
IWM has posted net inflows five out the past six weeks (combined $2.3 bln over the six-week period); YTD net flows have been a less impressive +$939 mln
Despite exhibiting net outflows of $1.5 bln last week, the SPDR S&P 500 ETF (SPY) has posted net inflows of $7.2 bln over the past 13 weeks, the most of any ETF
US-Listed ETFs: Short Interest
Data Updated: Based on data as of 6/29/12
Industrial Select Sector SPDR (XLI) posted the largest increase in USD short interest at $447 mln
Aggregate ETF USD short interest declined $8.7 bln over the past two weeks ended 6/29/12
For the second consecutive period, SPDR S&P 500 ETF (SPY) short interest declined; SPY’s 228.1 mln shares short is its lowest level since 1/15/10
The average shares short/shares outstanding for ETFs is currently 5%
Interestingly, two ETFs out of the top 10 to exhibit the highest level of shares short as a % of shares outstanding are 3x leveraged
and 3x leveraged inverse ETFs; by shorting them, investors may be trying to take advantage of the daily compounding issues
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 7/13/12 based on daily change in share counts and daily NAVs.
$7.5 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 $1.6 bln (specifically the PIMCO Total
Return ETF-BOND)
113 new ETF listings and 17 closures YTD
Over the past year, many of the successful launches have an income/dividend orientation
Five different ETF sponsors and three asset classes represented in top 10 most successful launches
BlackRock’s recently launched minimum volatility suite (four ETFs) has a combined market cap of $1.0 bln; some of the more impressive launches over the past year
Top 10 most successful launches account for 66% of market cap of ETFs launched over the past year
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Source: Morgan Stanley
Invesco PowerShares to Expand Suite of DWA Technical Leader ETFs
DWAS-The First US SmallCap ETF Based on Relative Strength Ranking
July 16, 2012--Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs), announced today the anticipated listing of the PowerShares DWA SmallCap Technical Leaders(TM) Portfolio on July 19, 2012 on the NYSE Arca.
The new Fund is expected to trade under the ticker DWAS and represents the first US small-cap ETF based on the concept of relative strength ranking.
The PowerShares DWA SmallCap Technical Leaders Portfolio (DWAS) will be the fourth ETF that Invesco PowerShares has listed based on the DWA Technical Leaders strategy since 2007. Technical Leaders are companies identified by the DWA selection methodology that possess strong relative strength characteristics compared to their peers and industry benchmarks. The existing products have attracted $750 million in assets under management as of June 30, 2012.
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Source: Invesco PowerShares
iShares files with the SEC
July 16, 2012--iShares files with the SEC.
view filing
Source: SEC.gov
HSBC Exposed U.S. Financial System to Money Laundering, Drug, Terrorist Financing Risks
Senate Subcommittee Holds Hearing and Releases Report
July 16, 2012 --Global banking giant HSBC and its U.S. affiliate exposed the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering (AML) controls, a Senate Permanent Subcommittee on Investigations probe has found.
“In an age of international terrorism, drug violence in our streets and on our borders, and organized crime, stopping illicit money flows that support those atrocities is a national security imperative,” said Sen. Carl Levin, D-Mich., subcommittee Chairman. “HSBC used its U.S. bank as a gateway into the U.S. financial system for some HSBC affiliates around the world to provide U.S. dollar services to clients while playing fast and loose with U.S. banking rules.
view the report-U.S. Vulnerabilities to Money Laundering,
Drugs, and Terrorist Financing:
HSBC Case History
Source: U.S. Senate Committee on Homeland Security & Governmental Affairs
Market Vectors Changing Underlying Indexes of Its Coal ETF (KOL) And Gaming ETF (BJK)
Largest U.S. Coal-Focused ETF and the Only U.S.-Listed Global Gaming Equity ETF Will Track Benchmarks Providing Pure-Play Approach to Indexing and Sophisticated Liquidity Screens
July 16, 2012--Effective on or about September 21, 2012, the Market Vectors Coal ETF (NYSE Arca: KOL) will begin tracking a new benchmark, the Market Vectors Global Coal Index (MVKOL).
At the same time, the Market Vectors Gaming ETF (NYSE Arca: BJK) will also begin tracking a new benchmark, the Market Vectors Global Gaming Index (MVBJK). Both indexes employ the Market Vectors index methodology that focuses on investability. This methodology is shared by the benchmark indexes of several other Market Vector ETFs, including Brazil Small-Cap (BRF), Indonesia (IDX), Junior Gold Miners (GDXJ), Oil Services (OIH), Russia (RSX), Semiconductor (SMH), and Vietnam (VNM).
“We expect that KOL and BJK will become more diversified as a result of these changes,” said Ed Lopez, Marketing Director at Van Eck Global. “They will continue, however, to offer pure play global exposure. Consistent with the Market Vectors index methodology, these indexes have limits on individual holdings which help to avoid overconcentration in a few large holdings.”
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Source: Market Vectors
ETF War of the Goliaths
July 13, 2012--The battles of the Goliaths that is playing out in the ETF Industry and the impact that they will have on the overall trillion dollar asset management industry certainly has the potential to keep many Business Schools busy writing case studies.
Future growth of the ETF market place within the next 3 years is clearly dependent upon many uncontrollable variables so it should not surprise to anyone that the range of growth estimates is so broad (13-25%), but that does not mean that strategic business decisions will not be made.
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Source: Global Economic Intersection
CFTC.gov Commitments of Traders Reports Update
July 13, 2012--The current reports for the week of July 10, 2012 are now available.
view updates
Source: CFTC.gov
Haywire ETN pricing draws regulatory red flag
July 13, 2012--The self-regulatory body for US brokers has issued an investor alert for exchange traded notes, warning of trading imbalances that have warped prices for the products recently.
The alarm from the Financial Industry Regulatory Authority seems to stem from deviations between ETNs’ market price and their indicative, or calculated, value.
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Source: FT.com
SEC Staff Publishes Final Report on Work Plan for Global Accounting Standards
July 13, 2012-- The Securities and Exchange Commission's Office of the Chief Accountant today published its final staff report on the Work Plan related to global accounting standards.
The Commission directed the staff in February 2010 to develop and execute the work plan. The Commission issued a statement at the time indicating that the information obtained through the Work Plan would aid the Commission in evaluating the implications of incorporating International Financial Reporting Standards (IFRS) into the financial reporting system for U.S. companies.
The SEC staff welcomes feedback on the final staff report. Submissions to the Commission may be made either on paper or electronically; please use only one method.
S&P Dow Jones Indices Announces Quarterly Index Reviews
July 13, 2012--S&P Dow Jones Indices Canadian Index Operations announces the following index changes as a result of the quarterly S&P/TSX Preferred
Share Index and S&P/TSX Venture Select Index Reviews. These changes will be effective at the open on Monday, July 23, 2012.
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Source: Standard & Poor's
