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Morgan Stanley-US ETF Weekly Update
July 21, 2014--US ETF Weekly Update
Weekly Flows: $321 Million Net Outflows
First Net Outflows in 10 Weeks
ETFs Have Generated Net Inflows 21 of 29 Weeks YTD
ETF Assets Stand at $1.8 Trillion, Up 10% YTD
Two ETF Launches Last Week
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net outflows of $321 mln last week, the first net outflows in 10 weeks
Last week's net outflows were led by US Small- & Micro-Cap ETFs at $1.3 bln; conversely, Fixed Income ETFs posted net inflows of $1.1 bln, the most of any category we measured
Nine of the 15 categories we measured posted net inflows last week; ETFs have generated net inflows 21 of the 29 weeks YTD
ETF assets stand at $1.8 tln, up 10% YTD
13-week flows remain positive among asset classes; combined $49.4 bln in net inflows
International - Developed ETFs generated $12.9 bln in net inflows over the last 13 weeks, the most of any category we measured and easily beating Fixed Income ETFs, the second largest asset gatherer from a flows perspective
US Small- & Micro-Cap ETFs exhibited net outflows of $3.1 bln over the last 13 weeks and was one of three categories to post net outflows
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares 7-10 Year Treasury Bond ETF (IEF) posted net inflows of $1.6 bln this past week, the most of any ETF
Prior to last week, IEF has posted seven consecutive weeks of net outflows totaling $5.3 bln
Despite posting net outflows of $2.2 bln last week, over the last 13 weeks, SPY has generated net inflows of $3.4 bln, the most of any ETF
Notably, two high yield bond ETFs exhibited large net outflows last week; the PIMCO 0-5 Year High Yield Corporate Bond Index Fund (HYS) had net outflows of $607 mln and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) had net outflows of $508 mln
Over the last 13 weeks, the iShares Russell 2000 ETF (IWM) has posted net outflows of $2.0 bln, the most of any ETF; US small-cap equities have drastically underperformed their larger cap counterparts over this time period from a performance standpoint
US-Listed ETFs: ETF Dollar Volume
ETF monthly $ volume as a % of listed trading volume decreased in June to 22%, down from 24% the prior month; over the last 5 years, ETF monthly $ volume as a % of listed trading volume averaged 28%; June's 22% is the lowest level since May 2007
Over the last five years, ETF monthly $ volume as a % of listed trading volume peaked in August 2011 at 36%
ETF $ volume was $47 bln more last week compared to the prior week and is 20% above its 13-week average
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Source: Morgan Stanley
Fund managers on alert over money market shake-up
July 21, 2014--Fund managers are jostling to keep hold of $900bn of assets that could be
shaken loose by new US rules on money markets funds due to be unveiled this week...
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Source: FT.com
iShares Adds Low-Cost Access to Short Duration, High Quality Bonds to the Core Series for Canadian Investors with XSQ
The iShares Core Series for Canadian Investors Leads in Market Flows Since Launch
For Even Greater Simplicity iShares Cores Series Funds to Include 'Core" in Names
July 21, 2014--iShares, the industry-leading exchange-traded fund (ETF) business at BlackRock Asset Management Canada Limited (BlackRock Canada), an indirect, wholly-owned subsidiary of BlackRock, Inc. (BlackRock), announced the addition of the iShares Core Short Term High Quality Canadian Bond Index ETF (XSQ) to its Core Series.
On the heels of the successful launch of the iShares Core Series for Canadian investors earlier this year, this new fund will deepen the fixed income opportunities within the Core Series by offering investors low-cost exposure to high quality, liquid, short duration Canadian bonds (1-5 years), with a credit rating of A or higher. XSQ has an annual management fee of 0.12%. XSQ has now closed the initial offering of its units which will be available for trading on the TSX when the market opens today.
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Source: BlackRock
Exchange Traded Concepts files with the SEC
July 17, 2014--Exchange Traded Concepts has filed a application for exemptive relief with the SEC.
view filing
Source: SEC.gov
Credit Suisse replaces Barclays as biggest swaps clearer
July 17, 2014--Credit Suisse has leapfrogged Barclays to become the biggest over-the-counter derivatives clearer in the US, as measured by the amount of client margin its futures commission merchant (FCM) is required to hold.
As of June 30, the Swiss bank faced a requirement of at least $7.2 billion for cleared swaps-a figure that has shot up 83% in the past eight months- according to data compiled by the National Futures Association (NFA).
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Source: Risk.net
Exclusive: SEC targets 10 firms in high frequency trading probe-SEC document
July 17, 2014--The U.S. Securities and Exchange Commission has been seeking information on 10 registered broker dealers as part of an ongoing investigation into high-frequency trading strategies, according to an internal SEC document reviewed by Reuters.
The regulator told its staff in late March that it was interested in seeing any tips, complaints, or referrals that they receive concerning the brokers and high frequency trading.
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Source: Reuters
Bond Fee Disclosures Sought by SEC to End 38-Year Debate
July 17, 2014--After a 38-year debate on how to make trading costs for corporate and municipal debt transparent, regulators are making another attempt at forcing dealers to disclose how much they earn on the transactions.
The Municipal Securities Rulemaking Board will discuss a proposal at the end of the month, Executive Director Lynnette Kelly said yesterday, after U.S. Securities and Exchange Commission Chair Mary Jo White asked the regulator to come up with a plan by year end.
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Source: Bloomberg
Semiannual Monetary Policy Report to the Congress-
July 15, 2014--Chairman Johnson, Ranking Member Crapo, and members of the Committee, I am pleased to present the Federal Reserve's semiannual Monetary Policy Report to the Congress.
In my remarks today, I will discuss the current economic situation and outlook before turning to monetary policy. I will conclude with a few words about financial stability.
Current Economic Situation and Outlook The economy is continuing to make progress toward the Federal Reserve's objectives of maximum employment and price stability.
view the Monetary Policy Report-Current Report: July 15, 2014
Source: FBR
The 2014 Long-Term Budget Outlook
July 15, 2014--Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing its debt to soar. The total amount of federal debt held by the public is now equivalent to about 74 percent of the economy's annual output, or gross domestic product (GDP)-a higher percentage than at any point in U.S. history except a brief period around World War II and almost twice the percentage at the end of 2008.
If current laws remained generally unchanged in the future, federal debt held by the public would decline slightly relative to GDP over the next few years, CBO projects. After that, however, growing budget deficits would push debt back to and above its current high level. Twenty-five years from now, in 2039, federal debt held by the public would exceed 100 percent of GDP, CBO projects. Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely.
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Source: Source: Congressional Budget Office (CBO)
DB-Synthetic Equity & Index Strategy-North AmericaUS ETF Market Weekly Review -US ETP assets dropped by $12.4bn, but gathered $6.1bn in new cash
July 15, 2014--Data in this report is as of Friday, July 11
Market and Net Cash Flows Review
The US (S&P 500) fell by 0.90%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) dropped by 2.40% and 0.30%, respectively. Performance was mostly negative across US sectors. The Utilities (+0.79%) and the Consumer Staples (+0.28%) sectors recorded the only increases; meanwhile, Energy (-1.95%) and Financials (-1.59%) were the worst performing sectors.
The DB Liquid Commodity Index fell by 2.37%; similarly, the Agriculture sector (DB Diversified Agriculture Index), and the WTI Crude Oil fell by 4.31% and 3.10%, respectively; while, Gold and Silver prices rose by 1.37% and 1.31%, respectively. Moving into other asset classes, the 10Y US Treasury Yield dropped by 12bps ending at 2.53%. Last but not least, Volatility (VIX) rose by 17.05% during the same period.
The total US ETP flows from all products registered $6.1bn (+0.3% of AUM) of inflows during last week vs. $0.1bn (+0.0%) of inflows the previous week, setting the YTD weekly flows average at +$2.8bn (+$79.2bn YTD in total cash flows). Equity, Fixed Income and Commodity ETPs experienced flows of +$5.6bn (+0.4%), -$45mn (-0.0%), and +$0.6bn (+0.9%) last week vs. +$1.2bn (+0.1%), -$1.8bn (-0.6%), and +$0.7bn (+1.1%) in the previous week, respectively.
Among US sectors, Consumer Discretionary (+$0.5bn, +5.3%) and Consumer Staples (+$0.1bn, +1.0%) received the top inflows, while Industrials (-$0.9bn, -4.9%) and Financials (-$0.5bn, -0.7%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: SPY (+$4.0bn), QQQ (+$1.0bn), IVV (+$0.6bn)
Top 3 ETPs & ETNs by outflows: IWM (-$1.8bn), DXJ (-$0.5bn), IYR (-$0.5bn)
New Launch Calendar: REITs, Euro Zone, Multi-Assets & Women in Leadership
There were three new ETFs and one new ETN listed during the previous week. AdvisorShares listed one new actively managed multi-asset ETF; meanwhile, BlackRock added one new ETF focusing on Global REITs, in addition to expanding its currency-hedged lineup with one new Euro Zone focused ETF; last but not least, Barclays listed one new thematic ETN offering exposure to US companies with gender-diverse executive leadership and governance.
Turnover Review: Floor activity increased by 34%
Total weekly turnover increased by 34.0% to $264.6bn vs. $197.5bn from the previous week. However, last week's turnover level was 7.6% below last year's weekly average. Equity ETPs turnover increased by $67.2bn (+38.9%); while Fixed Income and Commodity ETPs turnover decreased by $0.1bn (-0.5%) and $0.6bn (-8.1%), respectively.
Assets under Management (AUM) Review: Assets decreased by $12.4bn
US ETP assets dropped by $12.4bn (-0.7%) totaling $1.837 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +9.5% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$14.0bn, +$0.7bn, and +$0.9bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
