Americas ETP News
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NYSE, Nasdaq Join to Push for Trading Rule
March 10, 2014--Longtime rivals Nasdaq OMX Group Inc. and NYSE Euronext are joining forces in a bid to reclaim trading volumes from smaller competitors, according to people familiar with the matter.
The two firms are pushing for a controversial rule to be added to a pilot program under consideration by the Securities and Exchange Commission to widen tick sizes, or the increments between price quotes, for certain companies.
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Source: Wall Street Journal
DB-Synthetic Equity & Index Strategy- North America-US ETF Market Monthly Review-ETP assets reach $1.7 trillion amid massive FI inflows and market rally
March 7, 2014--Data in this report is as of Friday, February 28th, 2014
US ETP assets increased by $82.8bn
ETP assets in the US rose by $82.8bn to $1.703 trillion (YTD +1.5%) last month. Global ETP industry assets closed at $2.309 trillion (YTD 2.0%)
Flows Review: Risk off? Don't be deceived by fixed income ETF flows
US ETPs experienced inflows of $18.9bn during February (+1.2% of last month's AUM).
Within long-only ETPs, total flows were +$17.9bn in February vs. -$16.1bn in January. Equity, Fixed Income, and Commodity long-only ETPs experienced flows of -$0.2bn, +$17.0bn and +$0.7bn, respectively.
Despite the weak long-only equity ETP flows (-$0.2bn) and the record-breaking inflows into fixed income ETPs (+$17bn), flow trend patterns suggest a different picture than flows magnitude. Fixed Income flows seemed to have been inflated by an isolated event without which flow trend pattern would have remained somewhat weak. On the opposite side, equity ETFs seemed to have experienced a short term drag without which the trend would have remained strong. Overall, we believe that the underlying asset allocation trend still favors equity over fixed income. Equity international regional developed markets ETPs kept capturing most of the attention, gathering $4.1bn in fresh new cash; while single country DM allocations favored, once again, Japan with inflows of $0.4bn. Meanwhile, in the fixed income space, Corporates (+$4.5bn) exhibited strong magnitude and flow pattern. Last but not least, commodity (+$0.7bn) ETPs gathered their first monthly inflows since December of 2012; Gold (+$0.6bn) ETP flows bounced back in February suggesting an improvement in the investment demand of the yellow metal.
New Launch Calendar: New FRNs made its debut into the ETF market
There were fifteen new ETFs listed during the previous month. Fourteen of them were listed in the NYSE Arca, while the remaining one was listed in NASDAQ. The new products offer exposure to currency-hedged, thematic and international small and large caps equities, Municipals, Floating Rate Notes (FRNs), short term TIPS and exposure to Gold utilizing a variety of currencies other than the USD.
Turnover Review: Floor activity decreased by 2.9% in February
ETP turnover totaled $1.375 trillion last month, 2.9% (-$41.2bn) lower than the previous month figure of $1.416 trillion, however, 10.8% above last year's monthly average of $1.240 trillion. Fixed Income and Commodity ETPs turnover increased by $3.7bn (+4.5%) and $4.4bn (+10.8%), respectively; while Equity ETPs turnover decreased by $47.7bn (-3.7%) during February.
ETP trading made up 25.4% of all US cash equity trading in February, down from last year's peak of 32.0% in June, and still below its 3-year monthly average of 27.9%.
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Source: Deutsche Bank- Synthetic Equity & Index Strategy- North America
Incredible Shrinking Management Fee
Professional portfolio management has long cost too much. If a new company has its way, it could be free.
March 7, 2014--This past week, WiseBanyan, an online-only investment adviser, publicly launched a service that builds and manages diversified portfolios of exchange-traded funds for nothing.
There is no minimum account size; nor is there any fee to sign up, to buy the funds or to hold them (other than the underlying expenses of the funds, averaging less than 0.14% annually).
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Source: Wall Street Journal
CFTC.gov Commitments of Traders Reports Update
March 7, 2014--The current reports for the week of March 4, 2014 are now available.
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Source: CFTC.gov
SEC exam director warns advisers about use of alternative mutual funds
Noting surge in inflows, Bowden calls the funds 'bright, shiny objects' with sharp edges
March 6, 2014--The head of the Securities and Exchange Commission's examination program warned investment advisers on Thursday to be careful when putting their clients in alternative mutual funds.
The SEC has noticed increased use of nontraditional investments and complex trading strategies in mutual funds, said Andrew Bowden, director of the Office of Compliance Inspections and Examinations.
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Source: Investment News
CFTC.gov Swaps Report Update
March 5, 2014--CFTC's Weekly Swaps Report has been updated, and is now available.
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Source: CFTC.gov
KraneShares and Bosera Asset Management Launch First MSCI China A Share ETF Trading on the New York Stock Exchange
March 5, 2014--Krane Funds Advisors LLC ("KraneShares"), a provider of China-focused Exchange Traded Funds (ETFs), today announced the launch of the KraneShares Bosera MSCI China A Share ETF (NYSE ticker: KBA) on the New York Stock Exchange. The fund will provide investors direct access to Chinese securities listed on the Shanghai and Shenzhen Stock Exchanges. This new ETF is a collaboration between KraneShares and Bosera, one of China's largest asset managers (with $32 billion in client assets) to license the MSCI China A Index.
MSCI is the gold standard of equity index providers globally, with approximately $8 trillion benchmarked to its indexes(1) . Ninety-five percent of U.S. pension fund assets invested in international equities are benchmarked to MSCI.(2)
"KraneShares Bosera MSCI China A Share ETF is the first China A Share ETF on the NYSE to provide meaningful exposure to both large and mid cap Chinese companies. We believe mid cap Chinese companies stand to benefit the most from China's shift to a domestic consumption economy and the growth of its middle class from 300 million to 600 million people over the next 10 years," said Jonathan Krane, Chief Executive Officer of KraneShares. "KBA will provide global investors direct access to this asset class, and we are excited to be working with Bosera to offer this MSCI index-linked ETF," said Krane.
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Source: KraneShares
Zero-fee ETFs sound tempting, but read the fine print first
March 5, 2014--Zero-commission exchange-traded funds are certainly alluring for any investor, but there is a limit to the free lunch.
Several Canadian discount brokers market ETFs without trading fees, but investors need to read the fine print.
Their offerings have different wrinkles so it pays to do the homework to avoid costly surprises. For instance, some firms have a set menu of zero-fee ETFs, and charge a regular commission for the rest. Other brokers let investors buy any ETF without a fee, but have commission for selling.
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Source: The Globe and Mail
Morgan Stanley-ETF Quarterly Report: $1.7 Trillion in 1,362 ETFs
March 5, 2014--ETFs posted net inflows of $180.8 billion in 2013, of which $59.6 billion came in the fourth quarter. International developed
market equity ETFs captured 35% of net new money during the
year, the most of any category we measured, while commodity ETFs
struggled, exhibiting net outflows of $31.1 billion in 2013.
Furthermore, there were 143 ETFs launched in 2013 and there are
currently 1,362 ETFs with $1.7 trillion in assets.
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Source: Morgan Stanley
Isa guide 2014: Poor rates persist for cash Isas
March 5, 2014--Although some investors are now embracing higher-risk income investments, cash looks set to remain the most popular way to save money in an Isa.
Last year, eight out of every 10 Isa accounts opened were cash subscriptions, the highest proportion ever seen. Yet banks are offering investors some of the worst cash rates ever provided.
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Source: FT.com
