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"Where Are We? And Where Should We Be? Thoughts On MF Global And High Frequency Trading”
Address By CFTC Commissioner Scott D. O’Malia At The Center On Financial Services Law Of New York Law School
January 31, 2012--Introduction
Ron, thanks for that introduction and thanks for inviting me to speak today.
I am honored to be here at New York Law School, near the heart of the Financial District. Recently, all of my speaking engagements involve the Dodd-Frank Act. But, here, just two subway stops from the post-bankruptcy headquarters of MF Global, Inc.1 (“MF Global”), I thought it apropos to do something that unfortunately seems radical. I am going to focus on futures markets and futures customers.
It has been exactly three months since the Securities Investor Protection Corporation (“SIPC”) began insolvency proceedings against MF Global.2 Despite reams of releases and presentations from the SIPC trustee, futures customers have about the same information regarding the recovery of their funds today as on Day 1. Which is not much. Futures customers – including farmers, ranchers, and manufacturers – have been suspended in excruciating limbo, wondering when they will receive their funds. All they can do is to meekly fill out the claims forms presented by the SIPC trustee, all of which are due today. This situation is intolerable and unacceptable.
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Source: CFTC.gov
Select Sector SPDRs' Average Monthly Assets Soar 32 Percent in 2011
2011 Year-End Assets Top $44 Billion
January 31, 2012--Expense Ratio Cut
The Select Sector SPDR Trust, which offers a family of exchange-traded funds (ETFs) that divide the S&P 500 into nine individual sector funds, saw its average monthly assets climb 32 percent, or $10.5 billion, in 2011, further entrenching its position as the largest sector ETF family. Launched in 1998, Select Sector SPDRs is the oldest brand name in sector ETFs.
"The economy notwithstanding, 2011 was a banner year for us, both in terms of the increase in our average assets and the growth in our overall year-end assets," said Dan Dolan, Director -- Wealth Management Strategies for the Select Sector SPDR Trust. "With the markets especially choppy last year, investors sought safe havens in defensive sectors like Utilities, Consumer Staples, and Health Care, using the Select Sector SPDRs as equity substitutes to reduce single stock exposure."
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Source: Select Sector SPDRs
PowerShares files with the SEC
January 30, 2012--Invesco PowerShares has filed a post-effective amendment no. 11 to Form S-6 with the SEC for the BLDRS INDEX FUNDS TRUST
BLDRS ASIA 50 ADR INDEX FUND
BLDRS DEVELOPED MARKETS 100 ADR INDEX FUND
BLDRS EMERGING MARKETS 50 ADR INDEX FUND
BLDRS EUROPE SELECT ADR INDEX FUND
view filing
Source: SEC.gov
PowerShares files with the SEC
January 30, 2012-Invesco PowerShares has filed a post-effective amendment no. 19 to Form S-6 with the SEC for the POWERSHARES QQQ.
view filing
Source: SEC.gov
Knight Announces Astor Long/Short ETF Mutual Fund Added to Paychex 401(k) Platform
January 30, 2012--Knight Capital Group, Inc. (NYSE Euronext: KCG) today announced that subsidiary Astor Asset Management's mutual fund, the Astor Long/Short ETF Fund (ASTIX), was recently added to the 401(k) platform at Paychex, Inc. (NASDAQ: PAYX).
"We are very excited about having the Astor Long/Short ETF Fund added to Paychex's platform and offering an absolute return-style product to the company's many 401(k) participants," said Robert N. Stein, Astor's founder and Senior Managing Director and Head of Global Asset Management at Knight. "I believe that individuals investing for retirement are looking for further diversification in their portfolios and want the ability to choose from more than just the traditional 'buy-and-hold' funds. We believe Astor's tactical asset allocation and active management strategies fill this need."
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Source: Knight
Treasury Announces Marketable Borrowing Estimates
January 30, 2012--The U.S. Department of the Treasury today announced its current estimates of net marketable borrowing for the January – March 2012 and the April - June 2012 quarters:
During the January – March 2012 quarter, Treasury expects to issue $444 billion in net marketable debt, assuming an end-of-March cash balance of $30 billion. This borrowing estimate is $97 billion lower than announced in October 2011. More than half of the decrease is due to relative changes in the opening and end-of-quarter balances; the actual end-of-December balance was $26 billion higher, while the estimated end-of-March balance is $30 billion lower. Higher receipts and lower outlays account for the majority of the remaining decrease.
During the April - June 2012 quarter, Treasury expects to issue $200 billion in net marketable debt, assuming an end-of-June cash balance of $90 billion.
During the October - December 2011 quarter, Treasury issued $310 billion in net marketable debt, and ended the quarter with a cash balance of $86 billion. In October 2011, Treasury estimated $305 billion in net marketable borrowing and assumed an end-of-December cash balance of $60 billion. The higher cash balance was driven primarily by higher-than-projected receipts and lower outlays.
Additional financing details relating to Treasury’s Quarterly Refunding will be released at 9:00 a.m. on Wednesday, February 1, 2012.
view Sources and Uses Reconciliation Table
Source: US Department of the Treasury
ETF Research Center Reporting Monitor:Reporting Monitor: 4Q11 Week Two
January 30, 2012--Highlights
With about 40% of firms having reported results, it looks as if Q4 2011 S&P500 earnings will grow about 6.7% to $23.72 per share. Tech (XLK) likely replaced Energy (XLE) as the largest contributor to profit growth, as the latter dropped to third place behind Industrials (XLI). Three sectors--Financials (XLF), Materials (XLB) and Utilities (XLU)--were a drag on overall index earnings growth.
Sales probably grew only about 4.4% YoY due to considerable drag from Financials. Margins were mixed versus Q4 2010, but results were far less encouraging on a sequential basis with all but the Tech sector seeing slimmer profit margins...
Were it not for the Tech sector, earnings "surprises" would be negative for the index as a whole, and even including it the upside is much smaller than usual, suggesting firms are having a difficult time meeting expectations...
visit www.etfresearchcenter.com for more info.
Source: AltaVista Research
DB Global Equity Research: US ETF Market Weekly Review:Strong inflows continue – another $6.7bn added last week
January 30, 2012--Net Cash Flows Review
Equity markets were able to maintain their winning streak during last week. The US (S&P 500) was slightly positive (0.07%); while other developed and emerging markets outside the US did much better (mostly aided by USD weakness); the MSCI EAFE (in USD), and the MSCI EM (in USD) were up by 1.6% and 2.2% during the week, respectively.
Moving on to other asset classes, the 10Y Treasury yield dropped by 12bps last week, while the DB Liquid Commodity Index increased by 2.88%. Other sectors followed the same trend. The Agriculture sector (DB Diversified Agriculture Index), WTI Crude Oil, Gold, and Silver prices rose by 1.47%, 1.12%, 4.35%, and 5.39%, respectively. Last but not least, Volatility (VIX) inched higher rising by 1.37% and remained at a sub-twenty reading again.
ETP inflows saw another strong week during last week taking the YTD cash flow figure to almost $29bn. The total US ETP flows from all products registered $6.7bn of inflows during last week vs $10.0bn of inflows the previous week, setting the YTD weekly flows average at +$7.2bn.
ETP markets experienced positive flows across all asset classes, with the exception of Currency, during last week. Equity, Fixed Income, and Commodity ETPs all experienced strong flows of +$3.4bn, +$2.5bn, and +$1.2bn last week vs. +$8.1bn, +$1.6bn, and +$0.3bn the previous week, respectively.
Within Equity ETPs, Emerging Markets regional products experienced the largest inflows (+$1.5bn), followed by Mid Cap ETPs (+$0.7bn); while Leveraged vehicles experienced the largest outflows (-$0.5bn). Within Fixed Income ETPs, Corporate products experienced the largest inflows (+$1.8bn) followed by Sovereign ETPs (+0.4bn). Within Commodity ETPs, Precious Metals products recorded the largest inflows (+$1.0bn).
New Launch Calendar: new country and size segment exposures
There were 9 new ETFs listed during the previous week. Seven of them were the first to be listed in the BATS exchange. The new funds offer additional access to Developed Market countries with broad or size exposure, German debt, and active international equity strategy. (See Figure 18 for details)
Turnover Review: ETP trading is starting to pick up
Total weekly turnover rose by 37.6% to $304bn vs. $221bn in the previous week, still about 11% down from last year’s weekly average of $341bn. The largest increase was on Equity ETP turnover, which climbed by $68.3bn or 35.3% to $262bn. Fixed Income and Commodity ETP turnover followed with a hike of 27.2% (+$3.5bn) and 79.2% (+$10.1bn), respectively.
Assets Under Management (AUM) Review: assets kept climbing
Last week, total ETP assets increased by 2.0% to $1.14 trillion, driven by positive markets and sturdy inflows. Assets for equity, fixed income and commodity ETPs moved +$12.4bn, +$4.1bn, and +$6.3bn during last week, respectively. As of last Friday, total assets had grown by 8.7% or $91bn YTD.
to request report
Source: Deutsche Bank - Global Equity Research
Placemark Investments Launches ETF Investment Strategist Center
Financial Advisors Gain Access to Third-Party ETF Managers Listed in iShares Guide
January 30, 2012--Placemark Investments announced today that they have launched a new service to help investment advisors gain access to the broadest universe of third-party exchange-traded fund (ETF) portfolios in the marketplace.
Placemark's new ETF Investment Strategist Center provides information on almost 100 ETF investment strategists currently included in the iShares Connect Guide to ETF Investment Strategists, formerly known as the ETF Managed Solutions Guide, developed by iShares®, the world's largest ETF provider.
The ETF Investment Strategist Center was established in response to demand created by the rapidly growing market for ETFs. In recent years, as financial advisors have become more aware of the advantages of ETFs (diversity, liquidity, low cost and low tracking error, among others), they have increasingly leveraged the portfolios of investment managers specializing in ETFs.
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Source: Placemark Investments
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
January 30, 2012--Standard & Poor's will make the following changes in the S&P/TSX Canadian Indices:
The unitholders of Canmarc REIT (TSX:CMQ.UN) have approved the acquisition of the company by Cominar REIT (TSX:CUF.UN).
Canmarc REIT will be removed from the S&P/TSX SmallCap Index after the close of Monday, February 6, 2012.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
