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Fed eyes first rate rise after end to QE
October 29, 2014--The US Federal Reserve is shifting its focus to its first interest rate rise after ending an era of unprecedented asset purchases.
In a marked change of language, the rate-setting Federal Open Market Committee highlighted an improvement in the US labour market. Dropping its previous view that there was "significant underutilisation" of labour resources it said instead that this was "gradually diminishing".
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Source: FT.com
iShares Launches Beyond BRIC ETF
October 29, 2014--Given the ongoing concerns in most of the popular emerging market nations, investors are increasingly looking for funds that provide exposure to countries outside the BRIC (Brazil, Russia, India and China) group of nations.
Having sensed that, iShares, the world's biggest exchange-traded fund company,
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Source: Nasdaq.com
First Trust Enhanced Short Maturity ETF Approves Investment Management Fee Waiver and Reverse Share Split
October 29, 2014--First Trust Advisors L.P. ("First Trust") announced today that the Board of Trustees ("Board") of First Trust Exchange-Traded Fund IV (the "Trust"), on behalf of First Trust Enhanced Short Maturity ETF (the "Fund"), an actively-managed exchange-traded fund (NASDAQ: FTSM), has approved an additional waiver of the Fund's management fees in the amount of 0.10% of the Fund's average daily net assets for a period of one year beginning October 29, 2014.
First Trust serves as the investment advisor to the Fund. The Board has also approved a one-for-two reverse share split for the Fund.
With the additional fee waiver, the Fund's total annual fund operating expenses after fee waivers and offsets will be 0.25% of the Fund's average daily net assets. The Fund's annual unitary management fee is 0.45% of the Fund's average daily net assets.
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Source: First Trust Advisors L.P.
US Federal Reserve Issues FOMC Statement
October 29, 2014--Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace. Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing.
Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee's longer-run objective. Market-based measures of inflation compensation have declined somewhat; survey-based measures of longer-term inflation expectations have remained stable.
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Source: FRB
Schwab to offer free 'robo-advise' plan in first quarter 2015
October 28, 2014--Charles Schwab Corp confirmed on Monday that it will introduce free automated investment plans picked by computer algorithms in the first quarter of 2015.
The program, which will be marketed as Schwab Intelligent Portfolios to retail investors and independent investment advisers, will create portfolios of exchange-traded funds managed by Schwab and other providers.
viuew filing
Source: Reuters
SIGTARP Report: October 2014 Quarterly Report to Congress on TARP
October 28, 2014--This morning, SIGTARP issued its October 2014 Quarterly Report to Congress on the Status of TARP.
view the SIGTARP Report: October 2014 Quarterly Report to Congress on TARP
Source: Office of the Special Inspector General for the Troubled Asset Relief Program
U.S. Bancorp Fund Services' ETF Series Trust Exceeds $1 Billion in Assets
October 28, 2014--U.S. Bancorp Fund Services (USBFS) announced today that its Exchanged Traded Funds Series Solution (ESS) multiple series trust (MST) has exceeded $1 billion in assets.
"We're proud to share with our clients and partners across the industry that our ESS MST has achieved this important milestone," said Joe Redwine, president of U.S. Bancorp Fund Services.
"Reaching more than $1 billion in assets is a testament to the opportunities ESS series trusts offer investment management firms entering the exchange traded funds arena,"
The unique structure of ESS allows participants to select from multiple methods of securing required passive and/or active exemptive relief, Advisers may use their own exemptive relief, request that U,S, Bancorp Fund Services file for it on their behalf, or leverage a third party's existing exemptive relief provided through USBFS, Whichever option they select, the investment manager can benefit from the same comprehensive support services offered by U,S, Bancorp Fund Services.
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Source: U.S. Bancorp Fund Services (USBFS)
Fed revises risk management policy for clearing, settlement firms
October 28, 2014--The U.S. Federal Reserve said on Tuesday it has revised its policy which sets the risk management standards for the country's largest clearing, payment and settlement firms.
The policy change brings the Fed's standards in line with international rules for clearing agencies, such as rules on governance, credit risk and collateral.
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Source: Reuters
Treasury Liquidity Squeezed as Dealers Shut Off Machines
October 27, 2014--As soon as Charles Comiskey saw what was coming, he turned off his machines.
It was still early in the New York trading day on Oct. 15 and investors were already pouring into U.S. government bonds as global financial markets from Asia to Europe buckled.
Because yields were falling so fast, Comiskey, the head Treasury dealer at Bank of Nova Scotia (BNS), realized that he ran the risk of being stuck with losses or unwanted inventory if his computers automatically generated quotes to buy and sell with customers.
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Source: Bloomberg
Morgan Stanley-US ETF Weekly Update
October 27, 2014--US ETF Weekly Update
Weekly Flows: $7.2 Billion Net Inflows
High-conviction ETF Recommendations Slide
ETFs Have Generated Net Inflows 32 of 43 Weeks YTD
ETF Assets Stand at $1.8 Trillion, Up 10% YTD
Five ETF Launches Last Week
SEC Rejects Non-transparent Actively Managed ETFs
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $7.2 bln last week; ETFs have generated net inflows 11 of the last 13 weeks
Last week's net inflows were led by US Large-Cap ETFs at $6.0 bln; conversely, US Sector & Industry ETFs posted net outflows of $3.6 bln, the most of any category we measured
Fixed Income ETFs have posted net inflows for four consecutive weeks, totaling $18.6 bln
Eleven of the 15 categories we measured posted net inflows last week; ETFs have generated net inflows 32 of the 43 weeks YTD
ETF assets stand at $1.8 tln, up 10% YTD
13-week flows remain positive among most asset classes; combined $52.4 bln in net inflows
Fixed Income ETFs generated net inflows of $23.3 bln over the last 13 weeks, the most of any category
Trailing only Fixed Income ETFs, US Large-Cap ETFs have exhibited net inflows of $19.1 bln over the last 13 weeks
Commodity ETFs continue to struggle and over the last 13 weeks have posted net outflows of $1.8 bln; notably, Commodity ETF market share has declined to 3% from 9% over the last two years
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) posted net inflows of $3.3 bln last week, the most of any ETF
The three ETFs to mirror the S&P 500 Index (SPY, IVV, VOO) generated a combined $5.1 bln in net inflows last week
The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the SPDR Barclays High Yield Bond ETF (JNK) posted a combined $1.1 bln in net inflows last week
Despite a risk-on environment last week, the iShares Short Treasury Bond ETF (SHV) had net inflows of $1.0 bln, accounting for 32% of SHV's current market cap
After posting net inflows of $2.5 bln two weeks ago, the iShares Russell 2000 ETF (IWM) had net outflows of $2.2 bln last week, giving most of it back
The PowerShares QQQ (QQQ) continues to bleed money and over the last 13 weeks has exhibited net outflows of $8.4 bln, the most of any ETF
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume remained flat in September relative to August at 25%; over the last 5 years, ETF monthly $ volume as a % of listed trading volume averaged 28%
Over the last five years, ETF monthly $ volume as a % of listed trading volume peaked in August 2011 at 36%
ETF $ volume declined by $277 bln last week compared to the prior week, but is still 15%above its 13-week average
US Sector & Industry ETFs accounted for 16% of ETF $ volume last week compared to their 13-week average of 14% and market capitalization share of 12%
US-Listed ETFs: Short Interest Data Updated: Based on data as of 10/15/14
SPDR S&P 500 ETF (SPY) had the largest increase in USD short interest at $6.8 bln
SPY's shares short at 292 mln are at their highest level since 5/31/12
Notably, the SPDR Barclays High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) exhibited meaningful declines in short interest last period; shares short in JNK are at their second lowest level of 2014 and HYG's shares short are at their lowest level of the year
694 ETFs exhibited short interest increases while 646 experienced short interest declines over the last period
Aggregate ETF USD short interest increased by $12.2 bln over the period ended 10/15/14
The average shares short/shares outstanding for ETFs is currently 3.9%, down from 4.2% last period
For the third consecutive period, the SPDR Retail ETF (XRT) was the most heavily shorted ETF as a % of shares outstanding at 267%
Seven of the 10 most heavily shorted ETFs as a % of shares outstanding are sector/industry based (XRT, SMH, XOP, IYR, XBI, OIH, DRV)
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only seven ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
$8.3 bln in total market cap of ETFs less than 1-year old
Active ETFs account for 22% of recently launched ETF market share and 35% of net inflows over the last 13 weeks, the most of any category
The International - Emerging ETF category was the only recently launched ETF segment to exhibit net outflows last week
163 new ETF listings and 57 closures YTD
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Source: Morgan Stanley
