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DB-Synthetic Equity & Index Strategy-North America- US ETPs experienced $8.4bn outflows led by Equity products
August 26, 2013--Data in this report is as of Fri, Aug 23
Market and Net Cash Flows Review
Markets were mixed during last week. The US (S&P 500) edged higher by 0.46%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) dropped by 0.54% and 2.61%, respectively.
In the meantime, performance was mostly positive across US sectors. Real Estate (+2.39%) and Materials (+1.05%) recorded the biggest gains; The DB Liquid Commodity Index rose by 0.43%. In the meantime, the Agriculture sector (DB Diversified Agriculture Index) and the WTI Crude Oil fell by 0.91% and 0.97%, respectively; while Gold and Silver prices rose by 1.52% and 3.50%, respectively. Moving into other asset classes, the 10Y US Treasury Yield dropped 2bps ending at 2.82%. Last but not least, Volatility (VIX) dropped by 2.71% during the same period.
The total US ETP flows from all products registered $8.4bn (-0.6% of AUM) of outflows during last week vs. $6.5bn (-0.4%) of outflows the previous week, setting the YTD weekly flows average at +$2.9bn (+$98.8bn YTD in total cash flows).
Equity, Fixed Income and Commodity ETPs experienced flows of -$6.0bn (-0.5%), -$2.6bn (-1.0%) and +$0.3bn (+0.4%) last week vs. -$5.6bn (-0.5%), -$1.1bn (-0.4%) and +$0.2bn (+0.3%) in the previous week, respectively.
Among US sectors, Financials (+$0.6bn, +1.1%) and Materials (+$0.2bn, +2.0%) received the top inflows, while Energy (-$1.1bn, -4.7%) and Consumer Discretionary (-$0.1bn, -1.3%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: IYR (+$0.9bn), IWM (+$0.9bn), VGK (+$0.5bn)
Top 3 ETPs & ETNs by outflows: SPY (-$5.3bn), XLE (-$1.1bn), SHV (-$0.8bn)
New Launch Calendar: Income and Diversification
There was one new ETF listed during the previous week on the NASDAQ. The new product offers international exposure to a mix of asset classes with focus on income generation and diversification.
Turnover Review: Floor activity decreased by 1.3%
Total weekly turnover decreased by 1.3% to $270.7bn vs. $274.2bn from the previous week. However, last week's turnover level was 0.4% over last year's weekly average. Fixed Income ETPs turnover increased by $1.9bn (+8.6%); while Equity and Commodity ETPs turnover decreased by $2.8bn (-1.2%) and $2.3bn (-18.5%), respectively.
Assets under Management (AUM) Review: assets dropped by $6.4bn
US ETP assets dropped by $6.4bn (-0.4%) totaling $1.495 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +12.1% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$4.1bn, -$2.9bn and +$0.7bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
ETF Securities Precious Metals Weekly-Have Gold and Silver Prices Already Discounted
August 26, 2013--Fed Tapering?
Gold and silver rise despite spike in US bond yields and stronger dollar.
The silver price rose 1.0% last week, bringing gains over the past 8 weeks to
27%. The gold price also rose, bringing the total increase to 14% since its 5 July low.
While the spike in US bond yields is pressuring many financial assets,
precious metals took the latest release of the Fed's FOMC minutes in stride,
ignoring the Fed's statement that it is “broadly comfortable” with moving ahead with reductions in bond buying in the near future. The fact that both gold and silver prices ended the week higher indicates that the start of Fed tapering has largely been priced in to precious metals prices. U.S. 10yr yields and the gold
price are now trading more or less around the same levels they were in November of 2010, when QEII was first announced.
The 2013 correction in precious metals prices has attracted substantial physical demand, notably strategic buying by China. This demand surge, combined with a sharp decline in recycled gold supply and diminishing mining productivity, appears to be forming a solid foundation for the gold price.
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Source: ETF Securities Research
Horizons ETFs announces new name for HAF
August 26, 2013--Horizons ETFs Management ( Canada ) Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. (the "Manager") announced today that it will change the name of the Horizons Active Advantage Yield ETF ("HAF" or the "ETF") to the Horizons Active Yield Matched Duration ETF.
This name change is intended to emphasize the risk-mitigation strategy employed by the ETF to attempt to limit the negative impact that future interest rate increases could have on the value of the ETF. The name change is expected to take effect on September 6, 2013 .
HAF's investment objective and sub-advisor, Fiera Capital Corporation ("Fiera"), will remain the same.
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Source: Horizons ETFs Management (Canada) Inc.
Horizons ETFs announces final valuation for terminated ETF
August 26, 2013--Horizons ETFs Management ( Canada ) Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. (the "Manager") previously announced, by way of a press release dated June 25, 2013 , that the Horizons S&P/TSX 60 130/30(TM) Index ETF (the "ETF") would be terminated effective upon the close of business today, August 26, 2013.
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Source: Horizons ETFs Management (Canada) Inc.
NYSE to temporarily lift limit rules on 530 ETFs
August 26, 2013--NYSE Euronext said it will temporarily lift volatility curbs on hundreds of lightly traded exchange-traded funds after a slew of halts in low volume shares over the past week.
The exchange operator will temporarily roll back so-called limit-up/limit-down rules on certain ETFs that trade on the electronic Arca exchange starting on Wednesday, according to an alert sent Monday afternoon by the exchange operator.
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Source: MarketWatch
Lew Tells Congress Treasury to Hit Debt Limit in Mid-October
August 26, 2013--The U.S. will hit the $16.7 trillion debt ceiling in mid-October, Treasury Secretary Jacob J. Lew said in a letter urging Congress to raise the limit "as soon as possible."
"Extraordinary measures are projected to be exhausted in the middle of October," Lew said in the letter today to House Speaker John Boehner and other lawmakers.
"At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day," he said. The cash balance at that time is forecast to be about $50 billion, "insufficient to cover net expenditures for an extended period of time," according to Lew.
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Source: Bloomberg
Indictments Expected in Alleged Trading Code Theft
Criminal Complaint Targets Three, Including Two Former Flow Traders Employees
August 25, 2013--The top prosecutor in Manhattan is seeking to indict three men for allegedly stealing valuable computer source code from an automated trading firm, according to people familiar with the matter.
A criminal complaint filed by Manhattan District Attorney Cyrus Vance Jr. in New York and seen by The Wall Street Journal alleges that Glen Cressman and Jason Vuu, who worked as traders at Flow Traders US LLC in New York, emailed themselves lines of code that contained secret algorithms at the heart of the firm's high-frequency trading strategy.
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Source: Wall Street Journal
CFTC Issues Interpretation Concerning Retail Commodity Transactions
August 23, 2013--The U.S. Commodity Futures Trading Commission (CFTC) today announced an Interpretation concerning its authority over retail commodity transactions, as provided by Section 2(c)(2)(D) of the Commodity Exchange Act (CEA).
Today's Interpretation clarifies the CFTC’s view of the meaning of “actual delivery” under Section 2(c)(2)(D).
Section 742(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the CEA to add Section 2(c)(2)(D), entitled "Retail Commodity Transactions." Section 2(c)(2)(D) broadly applies to any agreement, contract, or transaction in any commodity that is entered into with, or offered to, a non-eligible contract participant or non-eligible commercial entity on a leveraged, margined, or financed basis. The Section requires such agreements, contracts, and transactions to be conducted on a regulated exchange and subjects them to the CFTC’s anti-fraud authority. However, the Section does not apply if “actual delivery" of the commodity is made within 28 days.
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Source: CFTC.gov
CFTC's Division of Swap Dealer and Intermediary Oversight Issues Time-Limited No-Action Relief Regarding Regulation 23.502 for Swap Dealers and Major Swap Participants in Connection with Swaps Subject to Risk Mitigation Techniques under E
August 23, 2013-- The Commodity Futures Trading Commission's Division of Swap Dealer and Intermediary Oversight (DSIO) today announced the issuance of a no-action letter providing time-limited relief to SDs and MSPs from compliance with Regulation 23.502,
provided that the SD or MSP intends to rely upon, and be compliant with, the EMIR portfolio reconciliation rules and otherwise satisfies the conditions set forth in CFTC Letter No. 13-45 Corrected
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Source: CFTC.gov
BATS, Direct Edge in Talks to Merge
Deal Would Create Second-Largest U.S. Stock-Market Operator
August 23, 2013--Electronic-exchange group BATS Global Markets Inc. is in advanced discussions to merge with rival stock-exchange company Direct Edge Holdings LLC, people close to the talks said, in a deal that would unseat Nasdaq OMX Group Inc.as the second-largest U.S. stock-exchange operator by volume.
The combination would unite two companies built by trading firms and banks to challenge the dominance of the New York Stock Exchange and Nasdaq Stock Market, using technology geared toward rapid, electronic trading.
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Source: Wall Street Journal
