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Morgan Stanley -ETF Weekly Update
July 25, 2011-Weekly Flows: $4.2 Billion Net Inflows
ETF Assets at $1.1 Trillion, Up 12% YTD
No ETF Launches
FaithShares to Close Christian Values ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETFs rebounded last week generating net inflows of $4.2 bln
US Equity ETFs experienced aggregate net inflows of $3.7 bln last week
Conversely, EM Equity ETFs posted net outflows of $465 mln last week, but still exhibited net inflows of $1.2 bln
over the past 13 weeks
ETF assets stand at $1.1 trillion, up 12% YTD; we estimate from both net new money and market appreciation
13-week flows remained mostly positive among asset classes; combined $30.4 bln net inflows
Fixed Income up $10.5 bln versus Commodities down $1.9 bln over the past 13 weeks
We estimate ETFs have generated net inflows 18 out of 29 weeks YTD; YTD net inflows of $70.8 bln
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares Russell 2000 Fund (IWM) generated net inflows of $1.3 bln last week, the most of any ETF
Seven of the top 10 ETFs to post net inflows last week were US equity focused (four broad market ETFs, three
sector/industry ETFs)
Despite posting net outflows of $463 mln last week, the Vanguard MSCI Emerging Markets ETF (VWO) has
exhibited net inflows of $3.3 bln over the past 13 weeks (second largest of any ETF)
US-Listed ETFs: Change in Short Interest
Data Unchanged: Based on data as of 6/30/11
XLE exhibited the largest increase in USD short interest since last updated
Roughly $485 million in additional short interest
Highest level of shares short for XLE since 10/31/08
SPY exhibited the largest decline in USD short interest since last updated
Roughly $4.1 billion in reduced short interest
We note that two broad emerging market ETFs (EEM & VWO) exhibited $1.3 bln in reduced short interest
request report
Source: Morgan Stanley
Fundamentals: Equity Allocations: Thinking Outside of the Box
July 25, 2011-Investors typically use one of three "standard" strategies to construct their equity portfolios. But none of them is optimal. In the July issue of Fundamentals, we suggest an alternative approach of achieving superior equity performance. But it requires some "out-of-the-box" type thinking.
The phrase “thinking outside of the box” has become so overused in recent years as to become trite. And yet, how many investors actually deviate from the
norm with their equity allocations?
Indeed, most investors follow the
pack, implementing one of three
“standard” strategies.
read more
Source: Research Affiliates,
Faithshares Pulls Plug on Final Christian Values Fund
July 25, 2011--Faithshares is getting out of the Christian values exchange-traded fund business, confirming this week it will shutter its last remaining religious values-based ETF, the Christian Values Fund ETF (FOC), sometime next month.
Four other funds aimed at specific religious denominations -- including Catholics, Baptists, Lutherans and Methodists -- were closed in July.
“Partly it was a problem with a lack of marketing,” Faithshares CEO Garrett Stevens told On Wall Street. “We didn’t get out there as aggressively as we should have.”
read more
Source: On Wall Street
ETF Securities Marks Two-Year Anniversary in the U.S
July 25, 2011--ETF Securities has offered U.S. physically-backed precious metal exchange traded products (ETPs) since July 2009. In two years, the firm has grown its U.S. assets under management (AUM) to $4.2 billion as of July 19, 2011.
ETF Securities (ETFS), the leading global provider of commodity ETFs, celebrates its two-year anniversary as a U.S. exchange traded product (ETP) provider in July 2011. Its first product listed on the NYSE Arca, ETFS Physical Silver Shares (SIVR), has seen assets grow to $725M as of July 19, 2011, and offers the lowest management fee of any physically-backed silver ETF in the market.
read more
Source: ETF Securities
NYSE Liffe gains approval to offer direct access in Brazil
July 25, 2011--NYSE Liffe, the Europe-based derivatives business of NYSE Euronext (NYX), has received regulatory approval from Brazil’s Securities and Exchange Commission, the Comissão de Valores Mobiliários (CVM), to offer direct electronic access to its London market with immediate effect.
The CVM’s decision to grant approval enables enables customers in Brazil to benefit from direct access to NYSE Liffe’s Short Term Interest Rate, Bond, Swapnote, Equity and Commodities Futures and Options. Alternatively, Brazilian firms can continue to make use of non-direct (intermediated) access for the execution of their NYSE Liffe business.
Garry Jones, Group Executive Vice President and Head of Global Derivatives, NYSE Euronext, said: “I would like to thank the Comissão de Valores Mobiliários for giving us its approval. In Brazil NYSE Liffe is best-known for commodities. Now that we have gained approval from the CVM, we are delighted to have the opportunity to promote our wider product range: the array of global currency interest rates and blue chip European equity derivatives that we offer, as well as the range of commodity contracts with which many investors are already familiar.”
Source: NYSE Euronext
Collateral Rules Criticized
July 25, 2011--Some lawmakers and financial firms are resisting rules being written to implement last year's Dodd-Frank law that could require banks to set aside more collateral when they make certain trades in the derivatives market.
The law requires that much of the collateral be held in cash or high-quality government securities, such as Treasury bonds. But some critics claim such a requirement could steer more money into U.S. securities just when many investors are getting nervous about the nation's debt load.
Source: Wall Street Journal
AdvisorShares files with the SEC
July 25, 2011--AdvisorShares has filed a post-effective amendment, registration statement with the SEC for the Accuvest Global Opportunities ETF
NYSE Arca Ticker: ACCU.
view filing
Source: SEC.gov
Van Eck files with the SEC
July 25, 2011--Van Eck has filed a post-effective amendment, registration statement with the SEC for the Market Vectors CEF Municipal Income ETF.
view filing
Source: SEC.gov
FINRA Warns Investors About Chasing Returns in Structured Products, High-Yield Bonds and Floating-Rate Loan Funds
July 25, 2011- The Financial Industry Regulatory Authority (FINRA) today issued an Investor Alert warning investors about putting their assets into riskier and sometimes complex products that promise higher returns than more traditional investments. With yields on many fixed-income investments at historically low levels and a volatile stock market, investors may be tempted to chase returns by investing in structured notes with principal protection, high-yield bonds, floating-rate loan funds and leveraged products.
FINRA's Investor Alert, The Grass Isn't Always Greener—Chasing Return in a Challenging Investment Environment, was prompted by significant recent inflows into investments like high-yield bond funds, floating-rate loan funds and structured retail products. High-yield bond funds had $75 billion in new sales in 2010. Floating-rate funds grew from $15 billion in 2008 to $60 billion in April 2011, and sales of structured products increased from $33 billion in 2009 to $54 billion in 2010.
view the The Grass Isn’t Always Greener—Chasing Return in a Challenging Investment Environment
Source: FINRA
Cost of Treasury futures set to rise
July 25, 2011--The cost of trading US Treasury futures was set to rise on Monday, as the CME Group adopted defensive measures given the impasse in Washington over raising the Federal debt ceiling.
The operator of the US’s largest futures exchange said it had raised margin requirements on US government debt futures and its other products linked to US Treasuries after a “normal review of market volatility to ensure adequate collateral coverage”.
read more
Source: FT.com
