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CFTC Adopts Harmonization Rules for Registered Investment Companies
August 13, 2013--The Commodity Futures Trading Commission (CFTC) today issued a final rule with respect to certain compliance obligations for commodity pool operators (CPOs) of investment companies registered under the Investment Company Act of 1940 that are required to register due to the recent changes to Commission Regulation 4.5.
For entities that are registered with both the CFTC and Securities and Exchange Commission (SEC), the CFTC will accept the SEC’s disclosure, reporting, and recordkeeping regime as substituted compliance for substantially all of Part 4 of the CFTC’s regulations, so long as they comply with comparable requirements under the SEC’s statutory and regulatory compliance regime. Thus, the final rule allows dually registered entities to meet certain CFTC regulatory requirements for CPOs by complying with SEC rules to which they are already subject.
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Source: CFTC.gov
Nasdaq to take on greater policing role on its stock exchange
August 13, 2013--Nasdaq OMX Group Inc plans to assume a greater role in the policing of its U.S. stock exchange, according to a regulatory filing, in a move that follows calls by Wall Street for an end to the self-regulatory status of exchanges.
As self-regulatory organizations (SROs), exchanges are responsible for monitoring and enforcing their members' compliance with securities laws and exchange rules.
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Source: Reuters
DB-Synthetic Equity & Index Strategy-North America-US ETF Handbook Series - ETF investments for a European recovery
August 13, 2013--A Comprehensive Guide for European ETF Investing
Full coverage of US-listed equity ETFs featuring 47 different regional and country products with details, analytics, comparisons, and commentaries.
Europe holds positive surprise potential and opportunities
Deutsche Bank strategists and economists see developed economies accelerating. Within the developed world, they see the Eurozone entering a cyclical recovery which should help Europe to emerge from recession during H2 2013. In addition, DB strategists see greater positive surprise potential in Europe than in the US, economically as well as earnings-wise.
The House View is strategically bullish on Europe
Broad European exposure or selective country exposure including Germany, France, Italy, and Spain are attractive on Europe recovery hopes and impressive sequentially developing PMIs. Sector-wise, domestic cyclical sectors such as banks, insurance, construction, media, and autos continue to seem more attractive than defensive sectors such as food & beverages. Sell-offs would provide attractive entry points.
ETF flows support fundamental bullish views on Europe
Recent flows into US-listed long-only European-focused ETFs have exhibited the strongest trend momentum from among all major regional exposures. Moreover, this trend has been strong at both broad and single-country benchmarked-ETFs, and has attracted inflows of $2.4bn and $3.0bn in the last 3 months, respectively.
Seven ETF ideas to engage in a European recovery
We provide seven specific ETF ideas to implement DB's views for Europe (Figure 1). In addition, we provide details and analysis for all 47 ETFs offering European regional and country exposure. Products offer access to broad markets, strategies (e.g. currency hedged, dividends, factors), sectors (Financials and Real Estate), and size segments. Content is organized in a way that facilitates peer-to-peer comparisons.
Visit https://eqindex.db.com/etf/ for report
Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
NYSE Euronext the EGShares EM Dividend HighIncome ETFwill be listed on August 15, 2013
August 13, 2013--Summary:
NYSE Euronext (NYSE:NYX) is pleased to announce that on Thursday, August 15, 2013, the following ETF will be listed on NYSE Arca and will begin trading as a new issue.
Security Name: EGShares EM Dividend High Income ETF
Short Name: EGS EM High Div ETF
CUSIP: 268461 431
Trading Symbol:EMHD
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Source: NYSE Euronext
CFTC Approves Final Regulations for Exemption from Required Clearing for Swaps Entered into by Certain Cooperatives; Division of Clearing and Risk Issues Time-Limited No-Action Relief
August 13, 2013--The Commodity Futures Trading Commission (Commission) today issued a final rule to exempt swaps entered into by qualified cooperatives from the clearing requirement under section 2(h)(1)(A) of the Commodity Exchange Act (CEA) and part 50 of the Commission's regulations, subject to certain conditions.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the CEA to require clearing of certain swaps. On December 13, 2012, the Commission issued its first clearing requirement determination, requiring that swaps meeting the specifications outlined in four classes of interest rate swaps and two classes of credit default swaps (CDS) be cleared. On March 11, 2013, swap dealers, major swap participants, and private funds active in the swaps market began clearing certain index CDS and interest rate swaps that they entered into on or after March 11, 2013.
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Source: CFTC.gov
Morgan Stanley-US ETF Weekly Update
August 12, 2013--Weekly Flows: $272 Million Net Inflows
Seventh Consecutive Week of Net Inflows
ETF Assets Stand at $1.5 Trillion, up 14% YTD
Two ETF Launches Last Week
US-Listed ETFs: Estimated Flows by Market Segment
ETFs eked out net inflows of $272 mln last week despite the S&P 500 being down four of five days
Over the last seven weeks, ETFs have generated net inflows totaling $45.5 bln
Net inflows were led by International- Developed ETFs at $1.8 bln; conversely, US Sector & Industry ETFs posted net
outflows of $1.1 bln, the most of any category we measured
Eight of the 15 categories we measured exhibited net outflows last week
ETF assets stand at $1.5 tln, up 14% YTD; $111.7 bln net inflows YTD
13-week flows remain mostly positive among asset classes; combined $33.7 bln in net inflows
Over the last 13 weeks, US Small- & Micro-Cap ETFs have posted net inflows of $6.5 bln, accounting for 9% of the category’s
current market cap (largest % of current market cap of those posting net inflows)
International – Emerging ETFs have posted net outflows of $9.3 bln over the last 13 weeks, the most of any category; the
two largest ETFs in the space account for $7.6 bln in net outflows
US-Listed ETFs: Estimated Largest Flows by Individual ETF
Vanguard FTSE Developed Markets ETF (VEA) posted net inflows of $573 mln, the most of any ETF
For the second consecutive week, ETFs with European exposure exhibited meaningful net inflows; the Vanguard FTSE Developed
Markets ETF (VEA-60% allocated to Europe), Vanguard FTSE Europe ETF (VGK), Vanguard FTSE All-World ex-US ETF (VEU-
45% allocated to Europe), and SPDR EURO STOXX 50 ETF (FEZ) posted a combined $1.3 bln in net inflows
The PowerShares Senior Loan Portfolio (BKLN) generated net inflows of $166 mln last week; YTD, BKLN has posted only one
week of net outflows as investors have flocked to short duration fixed income ETFs
The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) had net outflows of $307 mln last week and has posted net
outflows for 13 consecutive weeks totaling $4.1 bln
US-Listed ETFs: Short Interest Data Updated: Based on data as of 7/31/13
SPDR S&P 500 ETF (SPY) had the largest increase in USD short interest at $1.3 bln
SPY’s shares short are at their highest level since 3/28/13 and nearly 10% above their one-year average
The Vanguard FTSE Emerging Markets ETF (VWO) is coming off its highest level of shares short ever last period; VWO’s short
interest declined $845 mln and its shares short were down 22 mln
Aggregate ETF USD short interest increased by $187 mln over the period ended 7/31/13
The average shares short/shares outstanding for ETFs is currently 4.3%
For the third consecutive period, three of the 10 most heavily shorted ETFs as a % of shares outstanding have been currency based
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can
exceed 100% (only six ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets Source: Bloomberg, Morgan Stanley Wealth Management ETF Research. Data estimated as of 8/9/13 based on daily change in share counts and daily NAVs.
$8.8 bln in total market cap of ETFs less than 1-year old
International Equity ETFs account for 42% of market cap and 38% of total flows over the last 13 weeks of recently launched
ETFs
83 new ETF listings and 30 closures/delistings YTD
The top 10 most successful launches make up 68% of the market cap of ETFs launched over the past year
Five ETF sponsors and two asset classes represented in top 10 most successful launches; we note that the representation of
funds with an income orientation is currently six
The Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) generated net inflows of $27 mln last week, the
most of any recently launched ETF; since inception, VTIP has consistently posted net inflows, whereas longer-dated TIPS ETFs
have struggled as inflationary fears have dissipated and real rates have risen
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Source: Morgan Stanley
Vanguard Introduces Five New Equity ETFs
Firm announces lower management fees for two existing ETFs and expects to launch two new fixed income ETFs
July 12, 2013--Vanguard Investments Canada Inc. announced today that five new equity Canada-domiciled exchange-traded funds (Vanguard ETFs(TM)) will begin trading this morning on Toronto Stock Exchange (TSX).
Vanguard, which entered the Canadian market in December 2011 and saw its Canadian ETFs surpass $1 billion in assets earlier this year, now offers 16 low-cost, high-quality ETFs.
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Source: Vanguard
United States Commodity Funds-Notice of Forward Unit Split
August 12, 2013--United States Brent Oil Fund, LP ("USBO") announced today that it will execute a two-for-one forward unit split for holders of USBO units ("Unitholders").
The forward unit split will apply to all Unitholders of record as of the close of the markets on August 26, 2013, payable after the close of markets on August 28, 2013. USBO will trade at its post-split price on August 29, 2013 (the "ex-date"). USBO's ticker symbol and CUSIP, "BNO" and 91167Q100, respectively, will not change, and units of USBO will continue to trade on the NYSE Arca. John Hyland, Chief Investment Officer of United States Commodity Funds LLC (the "General Partner"), stated "Although a forward stock split will not change the basic economics of each of our investor's current holdings, we hope that a reduction in the value of each unit, and the proportionate increase in the number of units outstanding, will translate in higher daily trading volume which should be a benefit to investors."
Visit www.unitedstatesbrentoilfund.com for more info.
Source: United States Commodity Funds
nvesco Bolsters Line of Low Volatility Investing Options, Adding Mutual Funds to Line.
August 12, 2013-Invesco, a leader in low volatility investing, has expanded its innovative suite of low volatility products by introducing two mutual funds managed by its Invesco Quantitative Strategies team.
Effective July 31, 2013, the Invesco U.S. Quantitative Core Fund and Invesco Global Quantitative Core Fund were renamed and restructured, seeking to provide investors the opportunity to reduce risk and generate income without sacrificing total return. Invesco U.S. Quantitative Core Fund was renamed Invesco Low Volatility Equity Yield Fund, while the Invesco Global Quantitative Core Fund is now the Invesco Global Low Volatility Equity Yield Fund. The distribution frequency for both funds also was changed from annual to quarterly.
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Source: Invesco PowerShares
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly Review-Mild inflows of $0.3bn into US listed ETPs amid mixed markets
August 12, 2013--Data in this report is as of Fri, Aug 9
Market and Net Cash Flows Review
Markets were mixed during last week. The US (S&P 500) fell by 1.07%; while, outside the US, the MSCI EAFE (in USD) rose by 0.34% and the MSCI EM (USD) dropped by 0.34%. In the meantime, performance was mostly negative across US sectors; Materials (+0.88%) and Real Estate (+0.16%) recorded the only increases; The DB Liquid Commodity Index fell by 0.73%; similarly, the WTI Crude Oil dropped by 0.91%; meanwhile, the Agriculture sector (DB Diversified Agriculture Index), Gold and Silver prices rose by 1.59%, 0.20% and 3.27%, respectively.
Moving into other asset classes, the 10Y US Treasury Yield dropped 17bps ending at 2.57%. Meanwhile on the FX side the USD strengthened against all major currencies. The Euro, the British Pound, the Swiss Franc and the Japanese Yen depreciated 0.50%, 1.33%, 0.72% and 2.76%, respectively. Last but not least, Volatility (VIX) rose by 11.94% during the same period.
The total US ETP flows from all products registered $0.3bn (+0.0% of AUM) of inflows during last week vs. $4.2bn (+0.3%) of inflows the previous week, setting the YTD weekly flows average at +$3.6bn (+$113.7bn YTD in total cash flows). Equity, Fixed Income and Commodity ETPs experienced flows of +$1.2bn (+0.1%), -$0.8bn (-0.3%) and -$0.0bn (-0.0%) last week vs. +$7.2bn (+0.6%), -$2.5bn (-0.9%) and -$0.5bn (-0.7%) in the previous week, respectively.
Among US sectors, Healthcare (+$0.2bn, +0.9%) and Industrials (+$0.1bn, +1.0%) received the top inflows, while Financials (-$0.6bn, -1.0%) and Materials (-$0.3bn, -3.1%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: VEA (+$0.6bn), SPY (+$0.4bn), VGK (+$0.4bn)
Top 3 ETPs & ETNs by outflows: IWM (-$0.9bn), XLF (-$0.6bn), DIA (-$0.4bn)
New Launch Calendar: MLP and broad commodities
There were two new ETPs listed during the previous week on the NYSE Arca. Global X Funds listed MLPX, which offers exposure to US MLPs and Energy infrastructure corporations; meanwhile, BlackRock launched a new ETV (CMDT) which offers broad exposure to commodities while minimizing the cost of rolling each futures contract.
Turnover Review: Floor activity decreased by 20.7%
Total weekly turnover decreased by 20.7% to $215.4bn vs. $271.6bn from the previous week; Furthermore, last week's turnover level was 20.1% below last year's weekly average. Equity, Fixed Income and Commodity ETPs turnover decreased by $42.8bn (-18.3%), $12.0bn (-45.7%) and $1.4bn (-15.1%) during the same period, respectively.
Assets under Management (AUM) Review: assets dropped by $7.4bn
As of last Friday, US ETPs had accumulated an asset growth of +14.3% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$6.9bn, -$0.7bn and +$0.3bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
