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DB-Synthetic Equity & Index Strategy-North America-US ETF Market Monthly Review-Market sell-off and strong outflows removed 3.4% from US ETP assets
February 6, 2014--Data in this report is as of Friday, January 31st,2014
US ETP assets dropped by $57.5bn
ETP assets in the US dropped by $57.5bn to $1.620 trillion (YTD -3.4%) last month. Global ETP industry assets closed at $2.193 trillion (YTD -3.0%)
Flows Review: International DM equity allocations remain resilient
US ETPs experienced outflows of $15.2bn during January (-0.9% of last month's AUM).
Within long-only ETPs,total flows were -$16.1bn in January vs. +$19.6bn in December. Equity,Fixed Income,and Commodity long-only ETPs experienced flows of -$15.4bn,+$0.4bn and -$0.7bn,respectively.
Long-only equity products were highly influenced by US (-$14.2bn) and EM focused ETPs (-$9bn); however,based on the products that experienced the majority of the outflows we believe that most of the US outflows were driven by short term repositioning rather than a reallocation away from the US; while in the case of EM,market stress just exacerbated the preexisting flight of assets the segment was already experiencing. On the other hand,international DM ETPs (especially the European-focused ones) remained resilient and managed to gather healthy inflows of $7.3bn; furthermore,ETPs benchmarked to the Japanese market have yet again captured the largest flows among single country exposures (+$0.6bn). Meanwhile,on the Fixed Income space,we saw allocations favoring Short Duration with $1.0bn in net creations,and broad exposure (+$1.2bn) ETPs; Lastly,Gold ETPs experienced another month of net redemptions (-$0.7bn) despite recording a positive performance during last month; however the outflow trend did slow down.
New Launch Calendar: beta,smart-beta and active strategies
There were twenty-five new ETFs listed during the previous month. Twenty-one of them were listed in the NYSE Arca and the remaining four were listed in NASDAQ. The new products offer exposure to beta,smart-beta and active strategies covering the two major asset classes; within equities,new offerings include currency-hedged,leveraged,MLPs,US,dividend,growth and value; meanwhile,the new fixed income offering includes short,mid and long term allocation,global credit and municipals.
Turnover Review: Floor activity increased by 17.8% in January
ETP turnover totaled $1.416 trillion last month,17.8% (+$213.9bn) higher than the previous month figure of $1.202 trillion,and 14.2% above last year's monthly average of $1.240 trillion. Equity,Fixed Income and Commodity ETPs turnover increased by $208.4bn (+19.5%),$2.4bn (+3.0%) and $0.5bn (+1.3%) during January,respectively.
ETP trading made up 24.8% of all US cash equity trading in January,down from last year's peak of 32.0% in June,and still below its 3-year monthly average of 28.0%.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
BATS Global Markets Announces Combined Executive Team
Chris Isaacson Named EVP, Global CIO; Bryan Harkins Named EVP, Head of U.S. Markets
February 5, 2014-- BATS Global Markets, Inc. (BATS) today announced its combined executive team, effective with the January 31st close of the company's merger with Direct Edge Holdings.
As previously announced, Joe Ratterman will remain BATS Global Markets CEO with William O’Brien joining as President. Mr. Ratterman, a co-founder of the company, and Mr. O’Brien, who joined Direct Edge as CEO in 2007, will remain based in Kansas City and New York, respectively. They will also serve as two members of the recently formed BATS Executive Committee, a group which will also include (in alphabetical order):
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Source: BATS
CFTC's Weekly Swaps Report Update
February 5, 2014--CFTC's Weekly Swaps Report has been updated, and is now available
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Source: CFTC.gov
UPDATE 2-Moody's upgrades Mexico to coveted A grade sovereign rating
February 5, 2014--Mexico became only the second country in Latin America to earn a coveted "A" grade sovereign rating as Moody's upgraded it on Wednesday, citing a raft of economic reforms that President Enrique Pena Nieto has pushed through Congress.
Mexico's peso and leading share index both turned positive after the upgrade, which should help lower the country's borrowing costs.
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Source: Reuters
Banks urge US Treasury to take bigger role in debt sales
February 5, 2014--Wall Street banks are urging the US Treasury to play a more active role in how the country's debt is sold, encroaching on the turf of the Federal Reserve Bank of New York.
Since the demise of MF Global in 2011, the Fed has not approved any new primary dealers to help underwrite debt sales io the world's biggest bond market.
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Source: FT.com
CFTC's Division of Swap Dealer and Intermediary Oversight Provides Additional Guidance to Futures Commission Merchants and Depositories Regarding Procedures for New Filing Requirements
February 5, 2014--The U.S. Commodity Futures Trading Commission's (Commission or CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) issued a notice today to provide market participants with additional guidance regarding the procedures for submitting to the Commission
the notices and reports required under new and amended regulations the Commission adopted November 1, 2013.
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Source: CFTC.gov
NASDAQ OMX Monthly Index Performance Report-
February 5, 2014--The NASDAQ OMX Index Monthly Performance Report (as of 01/29/13)is now available.
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Source: NASDAQ OMX
Schwab rolls out 401(k) platform using exchange-traded funds
February 5, 2014--Charles Schwab Corp is taking broader aim at the retirement market with a new 401(k) platform that will allow participants to invest 100 percent of their plan in low-cost exchange-traded funds.
Schwab, which already has 401(k) programs using traditional mutual funds, said the new all-ETF platform is designed to reduce investment expenses for investors. An ETF on the new platform, for example, would cost roughly $7 to $10 for every $10,000 invested, while an index mutual fund might cost $14 to $15 for every $10,000 invested and an actively managed mutual fund might cost $70 for every $10,000 invested.
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Source: Reuters
Morgan Stanley-ETF Fund Flows-ETFs Exhibited Net Inflows of $59.6 Billion in 4Q13
February 4, 2014--ETFs Exhibited Net Inflows of $59.6 Billion in 4Q13
There were 48 new ETFs listed in the US in the fourth quarter of
2013 and three new providers entered the market.
For 2013, there
were 143 ETF launches compared to 50 liquidations. An additional 25
ETFs have been launched since the end of 2013 and, as of 1/28/14, there
were 43 issuers with 1,357 ETFs listed in the US.
Net inflows into US-listed ETFs were $59.6 billion during 4Q13. This
is well above the average quarterly rate of net inflows over the past three
years of $40.4 billion, but is comparable to the $59.4 billion of net
inflows in the fourth quarter of 2012.
For 2013, net inflows were $180.8 billion in assets falling short of 2012's net inflows of $192.8 billion, but a strong year nonetheless.
The largest net cash inflows this past quarter went into US Large- Cap ETFs. These ETFs had net cash inflows of $29.5 billion this past quarter, bringing net inflows for 2013 to $44.8 billion. International - Developed ETFs had the next highest inflows this past quarter at $23.4 billion, bringing net inflows in 2013 to $62.8 billion, the most of any segment. Interest in broad Europe and Japan were a driver of the flows within this segment.
Commodity ETFs had the largest net outflows in the fourth quarter of 2013. Net cash outflows from these ETFs were $7.1 billion this past quarter. Notably, one ETF providing exposure to gold had net outflows of $4.4 billion and was the main driver of the weakness in this segment. For 2013, net outflows were $31.1 billion for the segment. The only other segment to post net outflows for the full year was International- Emerging, which had net outflows of $10.5 billion. US ETF industry assets of over $1.6 trillion. Despite the growth of the ETF market, it remains concentrated with three providers and 20 ETFs accounting for over 80% and 41% of industry assets, respectively.
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Source: Morgan Stanley
Treasury Announces Marketable Borrowing Estimates
February 4, 2014--The U.S. Department of the Treasury today announced its current estimates of net marketable borrowing for the January - March 2014 and April - June 2014 quarters:
During the January -March 2014 quarter, Treasury expects to issue $284 billion in net marketable debt, assuming an end-of-March cash balance of $130 billion.
This borrowing estimate is $19 billion higher than announced in October 2013. The increase in borrowing relates primarily to changes in cash balance assumptions [[1] offset by higher receipts.
During the April -June 2014 quarter, Treasury expects to pay down $40 billion in net marketable debt, assuming an end-of-June cash balance of $150 billion.
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Source: US Department of the Treasury
