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SEC Grants Exchange Traded Concepts Exemptive Relief for Actively Managed ETF Products
ETC is First White Label ETF Platform with Both Active and Passive Relief
April 23, 2013--The Securities and Exchange Commission (SEC) has granted exemptive relief to Exchange Traded Concepts, LLC (ETC) to allow the white-label exchange-traded fund sponsor to bring actively managed ETF products to market.
The application for exemptive relief was filed 18 months ago and comes at a time when the marketplace demand for actively managed ETF offerings is on the rise.
The active relief will apply to all three of ETC’s existing trusts created through partnerships with SEI, US Bancorp Fund Services and Citigroup/Foreside Fund Services respectively.
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Source: Exchange Traded Concepts
ProShares Switches Euro ETF Index to FTSE
April 23, 2013--EPV will switch away from MSCI indexes to FTSE based benchmarks. As of today, UPV now aims for 2x or 200% daily performance to the FTSE Developed Europe Index, while EPV aims for -2x or 200% daily opposite performance to the same index.
The board of directors for both funds approved the index changes. The annual expense ratios for UPV and EPV are currently 0.95% and will remain unchanged. At the end of March, ProShares managed $23.5 billion in 140 ETFs.
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Source: Los Angeles Herald
Morgan Stanley-US ETF Weekly Update
April 23, 2013--US ETF Weekly Update
Weekly Flows: $8.5 Billion Net Outflows
ETF Assets Stand at $1.4 Trillion, up 7% YTD
12 ETF Launches
Van Eck to Change Benchmark on Two ETFs
Vanguard Transitions Indices on Eight ETFs
US-Listed ETFs: Estimated Flows by Market Segment
For the first time in eight weeks, ETFs posted net outflows ($8.5 bln in net outflows)
Last week’s net outflows were led by US Large-Cap ETFs ($3.2 bln); conversely, Fixed Income ETFs generated net inflows of
$829 mln, the most of any category we measured
ETF assets stand at $1.4 tln, up 7% YTD; $54.6 bln net inflows YTD
13-week flows were mostly positive among asset classes; combined $33.6 bln in net inflows
International – Developed Equity ETFs have posted material net inflows over the last 13 weeks ($10.5 bln); the category’s ETF
market share has risen by 2 percentage points as assets are up 42% over the past 52 weeks
Commodity ETFs have posted net outflows of $12.4 bln over the last 13 weeks; in particular, one ETF, the SPDR Gold Trust
(GLD), has exhibited net outflows of $10.4 bln over this period (GLD accounts for 60% of Commodity market cap)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
For the second consecutive week, the iShares MSCI Japan Index Fund (EWJ) posted the most net inflows
EWJ generated net inflows of $448 mln last week and, for the last 13 weeks, posted net inflows of $3.1 bln; expected policy actions
have resulted in a weaker yen and higher Japanese equity prices
Despite continued net outflows in the physical gold ETFs (GLD, IAU), the Market Vectors Gold Miners ETF (GDX) posted net
inflows of $238 mln last week; since gold’s peak in 10/12, gold miners have significantly underperformed the spot price of gold
Notably, the two largest EM equity ETFs, the iShares MSCI Emerging Markets Index Fund (EEM) and the Vanguard FTSE
Emerging Markets ETF (VWO) posted combined net outflows of $1.2 bln last week; over the last 13 weeks EEM and VWO have
exhibited net outflows of $8.0 bln (equivalent to the total International - Emerging net outflows)
US-Listed ETFs: Short Interest
Data Unchanged: Based on data as of 3/28/13
SPDR S&P 500 ETF (SPY) had the largest increases in USD short interest at $1.9 bln
SPY’s shares short are at their highest level since 5/31/12
SPY is up more than 23% on a total return basis since 5/31/12
Aggregate ETF USD short interest decreased by $4.1 bln over the period ended 3/28/13, coming off four consecutive periods during
which ETF short interest increased
The average shares short/shares outstanding for ETFs is currently 4.2%
The SPDR Oil & Gas Exploration & Production ETF (XOP) had the most shares short as a % of shares outstanding at 219% for the
period ended 3/28/13
Retail, currency, and financial ETFs seem to consistently make the list as the most heavily shorted ETFs
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 4/19/13 based on daily change in share counts and daily NAVs.
$6.4 bln in total market cap of ETFs less than 1-year old
Newly launched Fixed Income ETFs accounted for 24% of the market cap of ETFs launched over the past year, the most of any
category, including $806 mln in net inflows over the last 13 weeks
Issuance picked up last week with 12 launches; 39 new ETF listings and 27 closures/delistings YTD
The top 10 most successful launches make up 57% of the market cap of ETFs launched over the past year
Six different ETF sponsors and two asset classes represented in top 10 most successful launches
Seven out of the 10 most successful launches over the past year have an income orientation
Despite not cracking the top 10 most successful launches over the past year, the SPDR BlackStone/GSO Senior Loan ETF
(SRLN) generated net inflows of $60 mln last week, the most of any recently launched fund; SRLN is an actively managed
floating rate senior loan ETF that was launched on 4/4/13 and currently has a market cap of $140 mln
request report
Source: Morgan Stanley
SEI Study: Active Exchange Traded Funds Will Help Fuel Sector's Next Growth Phase
April 22, 2013--While actively managed exchange traded funds (ETFs) currently make up less than 1 percent of the global ETF market, a new paper released by SEI predicts the vehicles will be a major contributor to the next phase of ETF expansion, ultimately competing with traditional active mutual funds for market share.
The paper, "Getting a Grasp on Actively Managed ETFs Before the Boom," contends that the benefits of ETF products - low cost, transparency, and the potential liquidity, and tax efficiency - make them attractive vehicles for bringing more active management strategies to financial advisors and individual investors via an easy-to-trade, single-ticker investment vehicle.
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Source: SEI
BlackRock Launches iSharesBondsTM Corporate ex-Financials Term ETFs
Matures like a bond, trades like a stock, diversified like a fund
Supported by BlackRock Solutions(R) analytics
April 19, 2013--BlackRock, Inc. (NYSE: BLK) announced today that its iShares Exchange Traded Funds (ETFs) business, the world's largest manager of ETFs, has launched four iSharesBondsTM Corporate ex-Financials Term ETFs.
These new products (with defined maturity dates in 2016, 2018, 2020 and 2023) are designed to offer investors “bond-like” features in addition to the benefits of an iShares ETF including exchange traded liquidity, transparency and diversification.
The iSharesBonds Corporate ex-Financial Term ETFs will provide efficient access to a diversified pool of investment grade corporate credit with a defined maturity date. While relevant to all investors the products are expected to appeal to institutional clients such as bank treasurers.
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Source: iShares
TREASURIES-TIPS prices fall as inflation not a concern
Resistance cited at 1.671 percent on 10-year yield
Economic data points to 'soft patch,' supports bonds
TIPS auction comes in weak
April 18, 2013--Prices of Treasuries designed to protect investors from inflation dived on Thursday as a weak auction and a spate of disappointing economic data reflected dwindling fears of inflation.
Yields on the 5-year TIPS, or Treasury Inflation-Protected Security, hit their highest since late January after investor interest proved soft in the government's auction of $18 billion in the notes in the afternoon.
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Source: CNBC
Northern Trust Enters the Foreign Dividend ETF Market
April 17, 2013--The new FlexShares International Quality Dividend Defensive Index Fund (IQDE) hopes to bring something new to the burgeoning field of broad, international dividend exchange-traded funds.
he word "quality" in the name of this ETF refers to a qualitative scoring method related to fundamental health of the constituent holdings. The word "defensive" in the name of the fund relates to the holdings, which have betas of 0.50-1.00. (Beta is commonly a measure of volatility, and the lower the beta the lower the volatility should be.)
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Source: The Street
Bloomberg sues CFTC over cleared swaps margin rule
April 16, 2013--Data vendor Bloomberg L.P. filed a lawsuit on Tuesday against the top derivatives regulator to fight a new rule that would make the trading of swaps more expensive and hurt its business.
Bloomberg is one of a dozen or so providers that plan to launch platforms on which to trade swaps, as regulators globally crack down on the $650 trillion market to prevent a repeat of the 2008 financial crisis.
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Source: CFTC.gov
Morgan Stanley-US ETF Weekly Update
April 16, 2013--US ETF Weekly Update
Weekly Flows: $8.8 Billion Net Inflows
Seventh Consecutive Week of Net Inflows
ETF Assets Stand at $1.5 Trillion, up 9% YTD
Five ETF Launches
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $8.8 bln last week, the seventh consecutive week of net inflows
Last week’s net inflows were the second largest of 2013
US Sector & Industry ETFs led net inflows last week ($2.7 bln); we note that the nine Select Sector SPDRs each posted net
inflows combining for $1.8 bln in net inflows
Conversely, Commodity ETFs exhibited net outflows of $2.6 bln, the most of any category we measured
ETF assets stand at $1.5 tln, up 9% YTD; $63.2 bln net inflows YTD
13-week flows were mostly positive among asset classes; combined $45.0 bln in net inflows
International – Developed Equity ETFs have posted material net inflows over the last 13 weeks ($12.8 bln), 17% more net inflows
than the next highest category
Despite recent rumblings regarding a rotation from fixed income to equities, we have yet to see it in the ETF industry; Fixed
Income ETFs have generated $9.8 bln in net inflows over the last 13 weeks, trailing only two categories
US-Listed ETFs: Estimated Largest Flows by Individual ETF
iShares MSCI Japan Index Fund (EWJ) generated net inflows of $1.4 bln last week, the most of any ETF
Interestingly, for the third straight week, EWJ took in more new net money than the WisdomTree Japan Hedged Equity Fund
(DXJ) despite yen exposure detracting from USD returns in EWJ over this period
Notably, the iShares Floating Rate Note Fund (FLOT) has posted net inflows of $1.1 bln over the last 13 weeks, accounting for 68%
of its current market cap
The SPDR Gold Trust (GLD) has continued to bleed money, exhibiting net outflows of $2.3 bln last week and $9.1 bln over the last
13 weeks, the most of any ETF over both time periods
US-Listed ETFs: Short Interest Data Updated: Based on data as of 3/28/13
SPDR S&P 500 ETF (SPY) had the largest increases in USD short interest at $1.9 bln
SPY’s shares short are at their highest level since 5/31/12
SPY is up more than 23% on a total return basis since 5/31/12
Aggregate ETF USD short interest decreased by $4.1 bln over the period ended 3/28/13, coming off four consecutive periods
during which ETF short interest increased
The average shares short/shares outstanding for ETFs is currently 4.2%
The SPDR Oil & Gas Exploration & Production ETF (XOP) had the most shares short as a % of shares outstanding at 219% for the
period ended 3/28/13
Retail, currency, and financial ETFs seem to consistently make the list as the most heavily shorted ETFs
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 Smith Barney Research. Data estimated as of 4/12/13 based on daily change in share counts and daily NAVs.
$5.7 bln in total market cap of ETFs less than 1-year old
Newly launched Fixed Income ETFs accounted for 24% of the market cap of ETFs launched over the past year, the most of any
category, including $800 mln in net inflows over the last 13 weeks
27 new ETF listings and 27 closures/delistings YTD
The top 10 most successful launches make up 61% of the market cap of ETFs launched over the past year
Six different ETF sponsors and two asset classes represented in top 10 most successful launches
Seven out of the 10 most successful launches over the past year have an income orientation
For the second consecutive week, the Market Vectors Emerging Markets High Yield Bond ETF (HYEM) generated strong net
inflows, including $134 mln last week, the most of any recently launched ETF
Over the past year, State Street has launched the most new products (10 ETFs with $445 mln in assets); however, BlackRock’s
nine new launches have gathered the most assets ($1.8 bln)
request report
Source: Morgan Stanley
Treasury International Data Capital Data for February
April 15, 2013--The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for February 2013. The next release, which will report on data for March 2013, is scheduled for May 15, 2013.
The sum total in February of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $53.6 billion. Of this, net foreign private inflows were $44.4 billion, and net foreign official inflows were $9.2 billion.
Foreign residents increased their holdings of long-term U.S. securities in February – net purchases were $7.6 billion. Net purchases by private foreign investors were $9.1 billion, and net purchases by foreign official institutions were negative $1.5 billion.
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Source: US Department of the Treasury
