Americas ETP News
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BNY Mellon Clearing Joins CME Group for OTC Clearing
August 23, 2011--BNY Mellon Clearing, LLC announced today that it has joined CME Group as a clearing member firm in order to clear over-the-counter interest rate swaps on behalf of its institutional clients.
As a result of recent regulatory changes, it is expected that a large percentage of derivatives transactions will be cleared through central clearinghouses. The Dodd-Frank Act passed in the United States last year mandated clearing of "standardized" OTC derivatives.
"The standardization of OTC derivatives and migration to central clearing should reduce counterparty credit risk and allow better regulatory oversight," said Sanjay Kannambadi, CEO of BNY Mellon Clearing. "By joining CME Group as a clearing member for OTC interest rate derivatives, we have partnered with one of the leading and most respected derivatives clearinghouses and expanded the options available to our clients."
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Source: BNY Mellon
ETFs: Growing Up
August 23, 2011--Exchange-traded funds have been lauded for their efficiency and cost effectiveness over traditional fund structures. As their global and market expansion quickens—assets are on pace to exceed $2 trillion by 2015, according to a new study— Joe Keenan, head of Global Exchange Traded Fund Services at BNY Mellon Asset Servicing, speaks with Global Custodian about what is behind the growth and what the world’s largest global custodian can do for ETFs as they evolve
GC: What are the major reasons behind the rapid growth of exchange-traded funds and related products?
JK: The primary reason is that the exchange-traded fund product structure simply offers a better mousetrap. It is a fundamental en-hancement over more traditional fund struc-tures. Depending on the market, some of the inherent costs have been either addressed, or improved upon, by ETFs. For instance, with most traditional funds investors buy or sell their shares at the end of day net asset value. Inevitably, you get the price that reflects the impact of all the market decisions that have happened throughout the day. So that is one fundamental restriction that ETFs address, be-cause you can buy and sell them throughout the day based upon the quoted price on the exchange. This offers a real advantage.
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Source: BNY Mellon
PowerShares files with the SEC
August 23, 2011-PowerShares has filed a post-effective amendment, registration statement with the SEC for the
PowerShares KBW Bank Portfolio
(KBWB)
PowerShares KBW Capital Markets Portfolio (KBWC)
PowerShares KBW Insurance Portfolio (KBWI)
PowerShares KBW Regional Banking Portfolio (KBWR)
view filing
Source: SEC.gov
DB Global Equity Research: US ETF Market Weekly Review : GLD overtakes SPY as the largest ETP due to risk off trade
August 23, 2011-Risk off trade continues expanding amidst glooming economic outlook
This week's title says it all. Market sentiment kept wearing down throughout last week, especially after the Philly Fed Survey results came out significantly lower-than-expected increasing the likelihood of recession thus taking a toll on the equity markets. Equity markets in the US (S&P 500) plunged by 4.69% by the end of last week, while Gold prices advanced 6.02%. Market movements and flows have crowned a new king among ETPs: GLD.
The total US ETP flows from all products were $1.1bn of inflows last week vs $7.5bn of outflows the previous week, setting the YTD weekly flows avg. at +$1.7bn.
As weeks go by we just see signs of expansion for the risk off trade. Within long only US ETPs, Equity products added another round of outflows (-$3.1bn) last week and completed 4 weeks of straight negative flows for a total of -$18.7bn in such period. At the same time, we have seen increasing and consistent inflows to Fixed Income and Commodity ETPs. Last week Fixed Income funds received $2.0bn of inflows, lead by IG funds with $1.6bn; similarly Commodity ETPs also received $2.0bn in inflows, driven almost exclusively by Gold products with $1.9bn. On a quarter to date basis, Equity, Fixed Income, and Commodity products have recorded flows of -$8.7bn, +$4.5bn, and +$6.2bn (Figure 1).
Recently, another face of the risk off trade has been most notable among long only US-focused Sector ETPs. Flows pattern among sectors grouped by business cycle sensitivity suggest that fears about a US recession have increased. In the risk off trades earlier this year we had seen outflows from Global Cyclicals, inflows to Defensives, and flat flows to Domestic Cyclicals, suggesting that most of the defensive trade was being fueled by global growth concerns; however sector allocations took a clear shift during last week with Domestic Cyclicals experiencing massive outflows of $2.9bn, while Global Cyclicals recorded $1.6bn of outflows and Defensives received $518m in inflows (Figure 2).
New Launch Calendar: Multiple Asset Class choices joined the ETF offering
There were four new ETPs and one ETN launched in the NYSE Arca during the last week. The new products offer access to US Mortgage REITs, Target Date funds, Emerging Markets Small Cap stocks and Volatility exposure
Turnover Review: floor activity pulls back after record highs
Total weekly turnover decreased by 40.8% to $516bn vs. $872bn in the previous week. The largest decrease was on Equity ETP turnover which fell by $308bn or 40.3% to $456bn. Commodity ETPs turnover decreased by $26bn to $33.9bn last week, mainly driven by Precious Metals ETPs. Finally, Fixed Income products turnover decreased by 47.1% totaling $21.9bn at the end of last Friday.
Assets Under Management (AUM) Review: AUM "recession"
The economy may not be in recession yet, but ETP AUM growth already entered into negative territory for 2011. Assets dropped by $20.5bn or 2.1% falling to $982bn as of the end of last Friday. On a YTD basis ETPs have recorded negative growth of 1.3% or a $13.4bn slip.
to request report
Source: Deutsche Bank - Equity Research
Vanguard to launch six ETFs in Canada
August 23, 2011--U.S. investment fund goliath Vanguard Group Inc. has filed a preliminary prospectus to launch six exchange-traded funds (ETFs) in Canada.
The stock ETFs include Vanguard MSCI Canada and the Vanguard MSCI Emerging Markets, as well as the Vanguard MSCI U.S. Broad Market and Vanguard MSCI EAFE, which will both be hedged to Canadian dollars. The bond category includes Vanguard Canadian Aggregate Bond and Vanguard Canadian Short-Term Bond ETFs.
Vanguard, founded by index-investing champion John Bogle and known for its rock-bottom fees, is the latest player to jump into the Canadian ETF market that is dominated by the iShares Canada division of U.S.-based Blackrock Inc.
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Source: Globe and Mail
FlexShares files with the SEC
August 22, 2011--FlexShares has filed a third amended and restated application for exemptive relief with the SEC.
view filing
Source: SEC.gov
Pimco files with the SEC
August 22, 2011--Pimco has filed a post-effective amendment, registration statement with the SEC for the PIMCO Foreign Currency Strategy Exchange-Traded Fund (FORX), an actively-managed ETF.
view filing
Source: SEC.gov
Deutsche Bank to Repurchase Three ELEMENTS(SM) Exchange Traded Notes
August 22, 2011--Deutsche Bank announced today the repurchase of all outstanding securities in three ELEMENTSSM Exchange Traded Notes (ETNs) linked to the Benjamin GrahamSM indexes, pursuant to its repurchase right under the terms of the ETNs.
The ETNs are:
ELEMENTSSM Benjamin Graham Total Market Value Index-Total Return ETN (NYSE Arca:BVT)
ELEMENTSSM Benjamin Graham Large Cap Value Index-Total Return ETN (NYSE Arca:BVL)
ELEMENTSSM Benjamin Graham Small Cap Value Index-Total Return ETN (NYSE Arca:BSC)
Holders of the ETNs as of August 23, 2011 (the “repurchase valuation date”) will receive a cash payment in an amount equal to the daily repurchase value on such date. The payment of the repurchase value is expected to be made on August 26, 2011 (the “repurchase date”), the third business day following the repurchase valuation date. The repurchase valuation date and the repurchase date are subject to postponement for certain market disruptions events. The daily repurchase value on the repurchase valuation date will be made available on the product website at www.elementsetn.com as soon as practicable after August 23, 2011. The ETNs are expected to be suspended from trading on August 25, 2011.
Source: Deutsche Bank
EGA Emerging Global Shares files with the SEC
August 19, 2011--EGA Emerging Global Shares has filed a post-effective amendment no.15, registration statement with the SEC for the EGShares China Mid Cap ETF.
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Source: SEC.gov
CFTC.gov Commitments of Traders Reports Update
August 19, 2011--The current reports for the week of August 16, 2011 are now available.
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Source: CFTC.gov
