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BlackRock-February 2018 Case Study: ETF Trading in a High-Velocity Market March 2018
April 17, 2018--The sharp equity market sell-off and volatility spike during the week ended February 9, 2018 served as a market-wide stress test, especially for exchange-traded products (ETPs). During this week, exchange traded funds (ETFs) experienced more than $1 trillion in US-listed exchange trading volume, roughly double normal trading volumes (Source: Bloomberg).
While much of the media attention focused on losses in certain complex exchange-traded products (that are not ETFs), this episode underscored stability and liquidity of ETF trading amidst historic trading volumes. In fact, BlackRock observed some of the highest on-exchange volumes ever in its US-listed ETFs during this period.
We view this case study as a powerful counterpoint to questions that have been raised about the resilience of the ETF product structure and ecosystem in stressed markets. Not only was ETF trading orderly, an upswing in trading volume showed that investors again turned to ETFs in times of turbulence. Importantly, even with heavy trading of ETF shares on exchange, the funds experienced minimal outflows. In other words, buys and sells on exchange largely cancelled each other out, with the outflows representing minimal demand imbalance. In effect, ETFs acted as "shock-absorbers" in choppy markets.
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Source: BlackRock
ETFGI reports that US-listed ETFs and ETPs suffered US$2.96 Bn US dollars net outflows during March 2018, the second consecutive monthly outflows in 2018
April 17, 2018--ETFGI, a leading independent research and consultancy firm on trends in the global ETF/ETP ecosystem, reported today that US-listed ETFs and ETPs suffered US$2.96 Bn net outflows during March 2018, the second consecutive monthly outflows in 2018 and the largest monthly amount since February 2018, when net outflows were US$10.60 Bn.
Year-to-date net inflows reached US$65.22 Bn at the end of March which is significantly less than the US$133.62 compare to this point last year. (All dollar values in USD unless otherwise noted.)
Highlights
US-listed ETFs/ETPs suffered $2.96 Bn net outflows during March 2018, the largest since February 2018, which saw $10.60 Bn in net outflows
March 2018 marked the 2nd consecutive month of net outflows into ETFs/ETPs listed in the US
Due to market moves assets invested in ETFs/ETPs listed in the US decreased by 1.58%, or $55.28 Bn, during March, to $3.441 Tn
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Source: ETFGI
SEC-Fee Rate Advisory #3 for Fiscal Year 2018
April 17, 2018--The Securities and Exchange Commission today announced that starting on May 22, 2018, the fee rates applicable to most securities transactions will be set at $13.00 per million dollars.
Consequentl,, each SRO will continue to pay the Commission a rate of $23.10 per million for covered sales occurring on charge dates through May 21, 2018, and a rate of $13.00 per million for covered sales occurring on charge dates on or after May 22, 2018.
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Source: SEC.gov
Global X Funds Announces Listing of the Global X Autonomous & Electric Vehicles ETF (DRIV)
April 17, 2018--DRIV Offers Access to Transformative Technological Innovations in Transportation
Global X Funds, the New York-based provider of exchange traded funds (ETFs), announced today the listing of the Global X Autonomous & Electric Vehicles ETF (Nasdaq: DRIV).
Designed to track the Solactive Autonomous & Electric Vehicles Index, the fund holds a basket of companies involved in the production or development of electric vehicles (EVs) and autonomous vehicles (AVs). This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt.
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Source: Global X
CBO's Projections of Spending for the 2018-2028 Period
April 17, 2018--Last Monday, the Congressional Budget Office released The Budget and Economic Outlook: 2018 to 2028, the latest installment of an annual report explaining the agency's budget and economic projections. This week, CBO is publishing daily blog posts to share key excerpts from the report, and today's post is about the agency's projections of federal spending.
Under current law, federal outlays in 2018 will total $4.1 trillion, CBO estimates-$160 billion, or 4 percent, more than the amount spent in 2017. Spending is projected to grow at an average annual rate of 5.5 percent over the coming decade, reaching $7.0 trillion in 2028. Social Security, Medicare, and net interest account for more than two-thirds of that increase.
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Source: Congressional Budget Office (CBO)
CBO's Economic Forecast for the 2018-2028 Period
April 16, 2018--Last Monday, the Congressional Budget Office released The Budget and Economic Outlook: 2018 to 2028, the latest installment of an annual report explaining the agency's budget and economic projections.
This week, CBO is publishing daily blog posts to share key excerpts from the report, and today's post is about the agency's economic projections. (CBO has also posted a series of slides about those projections.)
In CBO's projections for 2018 through 2028, the economy follows a marked cyclical path: Economic growth rises notably this year, slows during the next few years, and then rises to match the growth of potential output-the maximum sustainable output of the economy-in the last years of the projection period. Over the next few years, the demand for output exceeds the sustainable supply of output (that is, there is excess demand in the economy).
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Source: Congressional Budget Office (CBO)
Treasury International Capital Data For February
April 16, 2018--The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for February 2018. The next release, which will report on data for March 2018, is scheduled for May 15, 2018.
The sum total in February of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $44.7 billion. Of this, net foreign private inflows were $26.9 billion, and net foreign official inflows were $17.8 billion.
Foreign residents increased their holdings of long-term U.S. securities in February; net purchases were $57.9 billion. Net purchases by private foreign investors were $31.6 billion, while net purchases by foreign official institutions were $26.3 billion.
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Source: treasury.gov
Republicans to Work With Democrats, in New Policy ETF Anyway
April 13, 2018--EventShares to broaden tax reform fund, cut partisan focus
GOP, DEMS ETFs to be shut after just 6 months on the market
An ETF startup is trying to do what Congress can't: get Democrats and Republicans to work well together.
Active Weighting Advisors is shutting down two EventShares-branded exchange-traded funds that focus on Republican and Democratic policies, it said in a press statement. Meanwhile, the firm, which was founded by a Goldman Sachs alum, is broadening the strategy of a third product to invest in companies affected by a range of political themes, regardless of party affiliation. The ETFs all began trading six months ago.
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Source: Bloomberg
U.S. Again Declines to Designate China as a Currency Manipulator
April 13, 2018--China remains on Treasury monitoring list, while India is added.
The U.S. Treasury passed up a formal opportunity to designate China a currency manipulator, though it faulted Beijing for doing too little to open its economy and retained China on a formal monitoring list for possibly receiving the designation in the future.
"The increasingly non-market direction of China's economic development poses growing risks to its major trading partners and the long-term global growth outlook," the department said of China in its semiannual report on international exchange rates.
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Source: Wall Street Journal
Evolve Active Core Fixed Income ETF Launches on NEO
April 12, 2018--The Aequitas NEO Exchange ("NEO") is pleased to announce that Evolve Funds Group Inc. ("Evolve ETFs") launched the Evolve Active Core Fixed Income ETF (NEO:FIXD) on NEO.
When the fund launched on March 29, 2018, Evolve ETFs became the tenth ETF provider to list products on NEO. FIXD invests primarily in domestic and international fixed income securities.
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Source: NEO Exchange
