Americas ETP News
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Morgan Stanley-Quarterly Report: $1.5 Trillion in 1, 300 ETFs
September 9, 2013--Net inflows into US-listed ETFs were $17.0 billion during the
second quarter of 2013, the lowest net flows since the first quarter of 2010. For the first half of 2013,
ETFs generated net inflows of $68.6 billion, with ETFs tracking international developed market indices capturing 33% of net new money. There are currently $1.5 trillion in ETF assets spread among 1,300 products.
Despite ETF growth and flows, the market remains concentrated with three providers and 20 ETFs accounting for 81% and 43% of industry assets, respectively.
ETFs provide access to favored market segments. Morgan Stanley & Co.'s global economics team anticipates Fed tapering to commence in September and the Fed to end net purchases in June 2014. We believe uncertainty around Fed tapering and geopolitics will result in continued global market volatility. We list favored areas in the report and ways to implement these ideas via ETFs.
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Source: Morgan Stanley
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly-Equity markets push US ETP assets up by 1.0% amid outflows of $2.8bn
September 9, 2013--Data in this report is as of Fri, Sep 06
Market and Net Cash Flows Review
Global Equity markets moved higher during last week. The US (S&P 500) edged higher by 1.36%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) rose by 2.81% and 2.94%, respectively. In the meantime, performance was mostly positive across US sectors; Healthcare (+1.90%) and Financials (+1.80%) recorded the biggest gains; meanwhile, the DB Liquid Commodity Index rose by 0.39%.
Similarly, the Agriculture sector (DB Diversified Agriculture Index), the WTI Crude Oil and Silver prices rose by 0.94%, 2.68% and 1.43%, respectively; while Gold prices fell by 0.23%. Moving into other asset classes, the 10Y US Treasury Yield rose 16bps ending at 2.94%. Last but not least, Volatility (VIX) dropped by 6.82% during the same period.
The total US ETP flows from all products registered $2.8bn (-0.2% of AUM) of outflows during last week vs. $5.8bn (-0.4%) of outflows the previous week, setting the YTD weekly flows average at +$2.5bn (+$90.2bn YTD in total cash flows).
Equity, Fixed Income and Commodity ETPs experienced flows of -$5.9bn (-0.5%), +$2.9bn (+1.2%) and +$0.2bn (+0.2%) last week vs. -$5.6bn (-0.5%), -$0.2bn (-0.1%) and +$0.1bn (+0.1%) in the previous week, respectively.
Among US sectors, Energy (+$0.4bn, +1.4%) and Consumer Discretionary (+$0.2bn, +2.0%) received the top inflows, while Financials (-$0.5bn, -0.8%) and Consumer Staples (-$0.3bn, -3.3%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: IEI (+$2.4bn), UST (+$0.7bn), EZU (+$0.4bn)
Top 3 ETPs & ETNs by outflows: IJH (-$1.9bn), SPY (-$1.8bn), MVV (-$1.1bn)
New Launch Calendar: Leveraged exposure to Europe
There was one new ETN listed during the previous week on the NYSE Arca. The new product (FIEU) launched by Credit Suisse offers leveraged (2x) exposure to European companies
Turnover Review: Floor activity decreased by 18.2%
Total weekly turnover decreased by 18.2% to $237.0bn vs. $289.8bn from the previous week. Furthermore, last week's turnover level was 12.1% below last year's weekly average. Fixed Income ETPs turnover increased by $4.6bn (+26.7%); while Equity and Commodity ETPs turnover decreased by $53.1bn (-20.7%) and $3.7bn (-28.9%), respectively.
Assets under Management (AUM) Review: assets increased by 1.0%
US ETP assets rose by $15.4bn (+1.0%) totaling $1.482 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +11.2% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved +$14.2bn, +$1.4bn and -$0.3bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
CFTC Announces that the Third Phase of Mandatory Clearing of Certain Credit Default Swaps and Interest Rate Swaps Begins Today
September 9, 2013--The Commodity Futures Trading Commission's (Commission) Division of Clearing and Risk (Division) reminds all swaps market participants that the third phase of required clearing for certain credit default swaps (CDS) and interest rate swaps begins today.
Accounts managed by third-party investment managers, ERISA pension plans, and entities that were not subject to the Commission’s first two implementation deadlines are required to begin clearing CDS and interest rate swaps that are executed on or after September 9, 2013.
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Source: CFTC.gov
CFTC Publishes Concept Release on Risk Controls and System Safeguards for Automated Trading Environments
September 9, 2013--The U.S. Commodity Futures Trading Commission (Commission) today approved for publication in the Federal Register a Concept Release on Risk Controls and System Safeguards for Automated Trading Environments (Concept Release).
The Concept Release reflects the Commission's ongoing commitment to the safety and soundness of U.S. derivatives markets in a time of rapid technological change, and provides a platform for discussion and analysis of the appropriate responses to such changes.
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Source: CFTC.gov
PowerShares Canada responds to investor demand for low volatility funds
September 9, 2013--PowerShares Canada celebrated the recent launch of two new mutual funds by ringing the opening bell at the Toronto Stock Exchange this morning.
PowerShares Canadian Low Volatility Index Class and PowerShares U.S. Low Volatility Index Fund ("the Funds") provide investors with exposure to portfolios of equities that are less volatile than the broad indices.
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Source: Invesco Canada Ltd.
CBO Monthly Budget Review for August 2013
September 9, 2013--The federal government ran a budget deficit of roughly $750 billion for the first 11 months of fiscal year 2013, CBO estimates-a reduction of more than $400 billion from the shortfall recorded for the same period last year.
Revenues have risen significantly, accounting for more than two-thirds of the decline in the deficit. The deficit for all of fiscal year 2013 is expected to be smaller than the 11-month figure, as revenues are likely to outpace outlays in September.
view the CBO Monthly Budget Review for August 2013
Source: Congressional Budget Office (CBO)
CFTC.gov Commitments of Traders Reports Update
September 6, 2013--The current reports for the week of September 3, 2013 are now available.
view updates
Source: CFTC.gov
U.S. Department of the Treasury Economic Statistics-Monitoring the Economy Update
September 6, 2013--The U.S. Department of the Treasury Economic Statistics-Monitoring the Economy report has been updated.
view the US Economic Data Monthly September 2013 report
Source: US Department of the Treasury
Toronto Stock Exchange Reaches a New Exchange Traded Product Milestone
September 6, 2013--Toronto Stock Exchange (TSX) today announced that it now has more than 300 exchange traded products (ETPs) listed. Purpose Investments Inc. listed five exchange traded funds (ETFs) this week, which enabled TSX to achieve this new milestone.
There are now 284 ETFs and 17 exchange traded notes trading on TSX. The number of listed products has increased by 40% in the past two years bringing the total market cap to approximately $70 billion as of August 31 , 2013. There have been 30 new ETFs listed so far this year.
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Source: Toronto Stock Exchange
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Monthly Review-August Equity ETP outflows may not be as bearish as they look
September 6, 2013--Data in this report is as of Fri, Aug 30
Record outflows removed $47.3bn from US ETP assets
ETP assets in the US dropped by $47.3bn to $1.467 trillion (YTD +10.0%) last month. Global ETP industry assets closed at $1.994 trillion (YTD +8.4%)
Flows Review: Intl DM equities gain momentum, while the US takes a breather
US ETPs experienced outflows of $18.4bn during August (-1.2% of last month's AUM).
Within long-only ETPs, total flows were -$19.6bn in August vs. +$39.6bn in July. Equity, Fixed Income and Commodity long-only ETPs experienced outflows of $11.6bn, $7.7bn and $0.1bn, respectively
The $11.6bn equity outflows were led by US-focused ETPs, however if we exclude SPY's outflows (usually more tactical than strategic in nature), long-only Equity ETP flows would have been +$2.4bn; moreover, the latest SPY short interest data available shows that in the first half of August shorted shares declined by 18.5m (-7.6%) compared to a decline of 10.3m (-1.1%) in its shares outstanding; this suggests that the outflows from SPY (and hence equities) could well be from short covering rather than an outright sell-off. Because of this we believe that August outflows from equities are less bearish than they seem and should be short-lived. Meanwhile, investors' attention turned to Intl DM equities, where broad DM ex US ETPs captured $4.7bn in new cash with interest shifting from Japan (-$1.4bn) to Europe (+$4.1bn) during August. Fixed Income ETPs saw strong outflows of $7.7bn during August, Sovereign ETPs, offering mostly rates exposure, experienced historical outflows of $5.2bn; while short duration products continued to attract new assets (+$1.1bn). Last but not least, although Commodity ETPs experienced outflows of $0.1bn, these have slowed down suggesting that negative sentiment towards the asset class has been waning.
New Launch Calendar: income, MLPs, EM, fundamentals and thematic
There were fourteen new ETPs listed during the previous month. Eleven of them were listed in the NYSE Arca, while the remaining three where listed in the NASDAQ. The new products offer exposure to commodities, MLPs, EM high-yielding equities, fundamental and managed futures strategies, thematic exposure to China and the city of Nashville and a mix of asset classes with focus on income generation and diversification.
Turnover Review: Floor activity decreased by 1.4% in August
ETP turnover totaled $1.167 trillion last month, 1.4% (-$16.2bn) lower than the previous month figure of $1.184 trillion, and 0.1% below last year's monthly average of $1.168 trillion. Commodity ETPs turnover increased by $4.3bn (+10.1%); while Equity and Fixed Income ETPs turnover decreased by $17.4bn (-1.7%) and $2.5bn (-2.6%), respectively.
ETP trading made up 27.0% of all US cash equity trading in August, down from this year's peak of 32.0% in June, and still below its 3-year monthly average of 28.2%.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
