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Morningstar Reports U.S. Mutual Fund and ETF Asset Flows Through June 2010
July 15, 2010-- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through June 2010. After registering outflows in May, flows into U.S. mutual funds reached $13.5 billion in June. Mutual funds saw inflows in five of the last six months, gathering $166.7 billion in the first half of 2010, which is about 24% higher than total inflows for the same period in 2009. June marked the fifth consecutive month of inflows for U.S. ETFs. Investors poured more than $9.9 billion into ETFs during the month, bringing the year-to-date total to $34.0 billion.
Additional highlights from Morningstar's report on mutual fund flows:
Investors added $17.6 billion to taxable-bond funds in June, bringing the total inflows to $119.6 billion during the first two quarters of 2010. Municipal-bond funds took in nearly $2.0 billion in June and $19.5 billion for the year-to-date period.
Despite the year-to-date losses sustained by the MSCI EAFE Index and continuing worry about the downturn in foreign stocks, year-to-date inflows for international-equity funds reached $19.6 billion, while domestic-stock funds experienced outflows of nearly $17.0 billion.
Alternative mutual funds, many of which were launched since the credit crisis, have recorded record inflows. PIMCO Fundamental Advantage Total Return has the led the way, taking in nearly $3.3 billion over the past 12 months through June.
Money market funds have lost $790.5 billion in assets over the past 12 months, with almost 80% of those outflows coming from institutional share classes.
Additional highlights from Morningstar's report on ETF flows:
In June, as well as for the year-to-date period and the trailing one-year period, taxable-bond ETFs led all ETF asset classes with more than $4.7 billion in net inflows.
Inflows of roughly $2.6 billion in June into SPDR S&P 500 SPY bolstered overall flows for domestic-stock ETFs, which reached $2.7 billion in the month. While large- and mid-cap U.S. stock ETFs had net inflows in June, small-cap ETFs saw large outflows.
While flows into iShares MSCI Germany Index EWG and iShares FTSE/Xinhua China 25 likely represent investors repositioning their international-stock exposure to include Germany and China amid the sovereign debt crisis in Europe, most single-country ETFs experienced outflows in June.
SPDR Gold Shares GLD was the second-most popular ETF in June, with inflows of $2.1 billion. Gold ETFs experienced strong inflows during the month, while funds that provide exposure to energy markets by rolling one-month futures contracts led outflows for commodities ETFs.
view Morningstar DirectSM Fund Flows Update report
Source: Morningstar
CFTC Chairman Gensler Comments on Passage of Wall Street Reform and Consumer Protection Act
April 15, 2010--Commodity Futures Trading Commission Chairman Gary Gensler today commented on the Senate passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The House of Representatives previously passed the bill, which now heads to the President’s desk.
Chairman Gensler said:
“The Wall Street reform bill passed today is historic and comprehensive. Over-the-counter derivatives dealers will – for the first time – be subject to robust oversight for their derivatives activities. Standardized derivatives will be required to trade on open platforms and be submitted for clearing to central counterparties. This will greatly improve transparency and lower risk in the marketplace. I look forward to the President signing this crucial legislation. The CFTC stands ready to implement the Dodd-Frank Act to best protect the American public.”
Source: CFTC.gov
CFTC Issues Proposed Business Continuity and Disaster Recovery Regulation for DCMs and DCOs and Conforming Amendments to the Core Principle Guidance Applicable to DCMs.
July 15, 2010--The Commodity Futures Trading Commission (CFTC) today proposed a regulation that would establish a recovery standard for designated contract markets (DCMs) and derivatives clearing organizations (DCOs) that the Commission determines to be critical financial markets in the event of a wide-scale disruption that affects such entities’ trading or clearing operations.
The proposal would require those DCMs and DCOs to maintain a business continuity and disaster recovery (BC-DR) plan and BC-DR resources sufficient to satisfy a same-day recovery time objective for trading and clearing as well as geographic dispersal of infrastructure and personnel sufficient to achieve that objective. The CFTC also has proposed conforming amendments to the application guidance and acceptable practices under the BC-DR-related core principles applicable to DCMs to harmonize the language of those provisions with parallel BC-DR-related application guidance applicable to DCOs.
Public Comment on the proposed regulation and amendments must be received within 30 days of publication in the Federal Register. Copies of the proposed regulation and amendments may be obtained by accessing the Commission’s website, www.cftc.gov.
Source: CFTC.gov
Global Equity Index & ETF Research -- US Weekly ETP Market Review
April 15, 2010--New Listings and Delistings
There were 3 listings in the previous week, all of them listed on NYSE Arca. Two of them track emerging market equity segments (size and sector) in Brazil and India, and the remaining ETF pursues an active strategy intended to create returns through a relative value investment approach.
Net Cashflows
Equity, Fixed Income and Commodity ETPs had inflows of $3.4 bn, $1.5 bn and $42 mm, respectively. Currency ETPs, on the other hand, experienced outflows of $157 mm.
Within Equity ETPs, Large Cap ETPs received the largest inflows ($3.7 bn) followed by Emerging Markets Regional ETPs, while US Sector ETPs saw the largest outflows ($697 mm)
The Fixed Income ETPs space saw strong inflows again this week, with Sovereign ETPs ($583 mm) and Corporates ETPs ($493 mm) leading the positive flows.
Commodity ETPs were almost neutral and no major trend was observed.
Turnover
After a couple of months of high turnover, Avg. Daily Turnover has dropped to pre-May levels. Turnover for this week was $74 bn, dropping 6.6% from the previous week.
Assets Under Management (AUM)
US ETPs AUM rose by 4.3% totaling $798 bn at the end of the week. Equity ETPs account for 72% of the assets with $578 bn, followed by Fixed Income funds with $136 bn and 17% of market share.
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Source: Deutsche Bank Global Equity Index & ETF Research
Horizons AlphaPro Launches Canada's First Actively Managed Corporate Bond ETF
July 15, 2010--- Jovian Capital Corporation and its subsidiary AlphaPro Management Inc. ("AlphaPro"), the manager of the Horizons AlphaPro exchange traded funds ("ETFs",) is pleased to announce the launch of Canada's first actively managed corporate bond ETF, the Horizons AlphaPro Corporate Bond ETF (the "Corporate Bond ETF"). The Corporate Bond ETF will begin trading today on the Toronto Stock Exchange under the symbol HAB.
The investment objective of the Corporate Bond ETF is to seek long-term moderate capital growth and generate high income. The Corporate Bond ETF will invest primarily in a portfolio of debt securities of Canadian and U.S. companies, directly or through investments in securities of other investment funds, including exchange trade funds.
"Corporate bonds are an often overlooked asset class by many income oriented investors. It's an asset class that has low correlation to equities and other types of bonds, offering greater diversification for an investor's portfolio and higher yield than government bonds, GICs and high interest savings accounts," said Ken McCord, President of AlphaPro.
The sub-advisor of the Corporate Bond ETF, Natcan Investment Management Inc. ("Natcan"), expects that the initial portfolio will be comprised of approximately 100 to 150 corporate bond issuers. Natcan's fixed income team, with more than $2 billion in corporate bond assets under management, will employ an active investment strategy which they expect will deliver better risk-adjusted returns than the DEX All Corporate Bond Index. Natcan's active strategy involves the use of macro-economic, fundamental and technical credit research to select the portfolio companies, together with analysis of the company's industry and growth prospects.
read more
Source: AlphaPro Management Inc,
First Trust Files with the SEC
July 15, 2010--First Trust has filed an application for exemptive relief with the SEC.
view filing
Source: SEC.gov
US Senate passes financial reform
July 15, 2010--The US Senate finally passed a landmark reform of Wall Street on Thursday, delivering President Barack Obama’s second big legislative victory and ushering in a raft of restrictions on banks.
Mr Obama will next week sign into law the Dodd-Frank Act, bringing to a close a year-long effort to overhaul the US financial system and its regulators. “The American people will never again be asked to foot the bill for Wall Street’s mistakes,” the president said.
The action on financial reform now switches to the US Treasury and regulatory agencies, which will have to decide which companies should be designated as “systemically significant” and face higher standards of capital and supervision.
read more
Source: FT.com
CFTC to formulate rules on derivatives
July 15, 2010--The US agency poised to become the world’s top derivatives regulator has started work on a mountain of new rules for Wall Street even before financial reform legislation has been signed.
US legislation that passed Congress on Thursday will give the CFTC authority to police most over-the-counter swaps, threatening profits at Wall Street derivatives desks.
The bill, which awaits President Barack Obama’s signature, requires the CFTC to write new rules within a year.
read more
Source: FT.com
Dow Jones Indexes to Launch Indexes Measuring Long-Term Inflation Expectations
July 15, 2010--?Dow Jones Indexes today announced the launch of the Dow Jones Long-Term Inflation Indexes. This family of indexes measures the market’s expectation of the future rate of U.S. inflation. The indexes are intended to serve as the underlying basis of financial products such as exchange-traded funds, swaps and structured products.
The main index in the family is the Dow Jones Long-Term Inflation Index, which tracks the difference in returns of long-term Treasury Inflation Protected Securities (TIPS) and the long-term Ultra Treasury Bond futures contract listed at the Chicago Board of Trade. Two sub-indexes individually track returns of the component instruments.
The index methodology was developed in the New York office of Credit Suisse Group AG. Dow Jones Indexes, which is 90% owned by CME Group and 10% by Dow Jones & Company, will calculate, maintain, market and license the indexes.
“This project is an exciting example of how our joint venture is able to incorporate and leverage successful CME Group products, data and relationships?—?in this case with Credit Suisse?—?to bring innovative new index products to market,” said Michael A. Petronella, president, CME Group Index Services. “These indexes track very liquid instruments in a unique way to produce a transparent measure of inflation expectations. The indexes thus become indispensable tools for market participants who want or need to take future inflation into account in their investment strategies.”
“The Dow Jones Long-Term Inflation Index is designed to closely track long-term inflation expectations as embodied in the nominal and inflation-linked Treasury market, while avoiding undue complexity,” said Tim Blake, head of the North American interest rate products group at Credit Suisse. “The elegantly simple design creates unique, powerful indicators for everyone from retail investors to the most sophisticated institutional clients.”
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Source: Dow Jones Indexes
Direxion Lists Four ETFs on NYSE Arca
July 14, 2010--NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading four ETFs sponsored by Direxion.
Direxion Daily Retail Bull 2X Shares (RETL)
The Fund seeks daily investment results, before fees and expenses, of 200% of the price performance of the Russell 1000® Retail Index. The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day. The Fund is different and much riskier than most exchange-traded funds.
Direxion Daily Retail Bear 2X Shares (RETS)
The Fund seeks daily investment results, before fees and expenses, of 200% of the inverse (or opposite) of the price performance of the Russell 1000® Retail Index. The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day. The Fund is different and much riskier than most exchange-traded funds.
Direxion Daily Natural Gas Related Bull 2X Shares (FCGL)
The Fund seeks daily investment results, before fees and expenses, of 200% of the price performance of the ISE-Revere Natural Gas IndexTM. The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day. The Fund is different and much riskier than most exchange-traded funds.
Direxion Daily Natural Gas Related Bear 2X Shares (FCGS)
The Fund seeks daily investment results, before fees and expenses, of 200% of the inverse (or opposite) of the price performance of the ISE-Revere Natural Gas IndexTM. The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day. The Fund is different and much riskier than most exchange-traded funds.
Source: NYSE Euronext
