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DB-Synthetic Equity & Index Strategy-North America-US ETF Market Monthly Review-Risk-on trade continued despite headwinds, ETP AUM added $4bn
March 6, 2013--US ETP assets slightly higher by $4bn
ETP assets in the US rose by $3.8bn to $1.409 trillion (YTD ↑5.7%) last month. Global ETP industry assets closed at $1.927 trillion (YTD ↑4.8%)
Flows Review: risk-on continued, but finding resistance
US ETP flows experienced inflows of $7.7bn during February (2.8% of last year’s AUM).
Within long-only ETPs, total flows were +$6.3bn in February vs. +$28.6bn in January. Equity, Fixed Income, and Commodity long-only ETPs experienced cash flows of +$8.2bn, +$1.6bn, and -$3.8bn, respectively.
Flows and markets support the prevalence of the risk-on trade, but some mixed readings raise warning signs.
Interest in equities continued in February, but it became more selective. US (+$3.4bn) and international DM (+$3.5) ETPs dominated the flows. Within DM products, Japan had an outstanding month (+$2.2bn); while the EM counterparts lost some momentum (-$0.2bn).
Fixed income ETPs also experienced positive flows (+$1.6bn), with flows favoring credit over rates and a clear focus on short duration (+$2.2bn) and quality (IG +$1.2bn)
Finally, commodity products flows had their worst month on-record (-$3.8bn) driven mostly by Gold (-$4.1bn) ETPs which continued to show weakness.
New Launch Calendar: income, currency, private equity, and low volatility
There were twelve new ETPs listed during the previous month. Ten of them were listed in the NYSE Arca, one on the Nasdaq and the remaining one was listed in BATS. The new products offer exposure to currencies, private equity, low volatility strategies and access to income through MLPs, BDCs, high yield debt and preferred shares
Turnover Review: Floor activity decreased by 3% in February
ETP turnover totaled $1.087 trillion last month, down 3.0% (-$33.7bn) from the previous month figure of $1.121 trillion, and 7.0% below last year’s monthly average of $1.168 trillion.
ETP trading made up 25.2% of all US cash equity trading in February, down from last year’s peak of 28.8% in June, and still below its 3-year monthly average of 29.8%request report
Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
CFTC Approves Request from the Chicago Mercantile Exchange Inc. to Adopt New Chapter 10 ("Regulatory Reporting of Swap Data") and New Rule 1001 ("Regulatory Reporting of Swap Data") of CME's Rulebook
March 6, 2013--The Commodity Futures Trading Commission (Commission) has approved a request from the Chicago Mercantile Exchange Inc. (CME) to adopt new Chapter 10 and new Rule 1001 of CME's rulebook.
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Source: CFTC.gov
Morgan Stanley-Quarterly Report: $1.4 Trillion in 1,235 ETFs
March 6, 2013--The following publication is our quarterly report on US-listed ETFs. It includes a summary of investment applications, excerpts
from our strategy reports, our outlook for related markets, index
data, and individual profiles for the 317 ETFs in our coverage
universe, which represents 92% of US-listed ETF assets.
ETFs attracted $192.8 billion in net new money during 2012, the biggest year on record. There are currently $1.4 trillion in ETF assets spread among 1,235 products. In 2012, 155 ETFs were issued and four new providers entered the market. Notably, 82 ETFs
liquidated in 2012. Despite strong growth and flows, the ETF
market remains concentrated with three providers and 20 ETFs,
accounting for almost 80% and 47% of industry assets, respectively.
ETFs provide access to favored market segments. Morgan Stanley & Co.’s global strategy team favors the Asia/Pacific region for equities and the firm maintains an overweight recommendation to credit. We believe long-term structural challenges in the G10 economies will lead to a muddle-through growth scenario in 2013, while structural reforms are necessary to move emerging markets from export-led to domestic demand driven growth models. We list favored areas in the report and ways to implement these ideas via ETFs.
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Source: Morgan Stanley
8.7 billion net inflows into ETFs and ETPs listed in the United States in February 2013 show a continuation of the rotation into equities
March 6, 2013--In February 2013, Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) listed in the United States had net inflows of $8.7 billion, according to new research published in the latest ETFGI Global ETF and ETP industry insights.
ETFGI won the Best ETF Research award in 2012 in the ETF Express awards announced on February 28th in London.
Equity ETFs and ETPs gathered the largest net inflows with $9.9 billion, followed by leveraged inverse ETFs and ETPs with $989 million, and active ETFs and ETPs with $656 million, while commodity ETFs and ETPs experienced net outflows with $3.6 billion.
Year to date through end of February 2013, ETFs and ETPs have seen net inflows of $37.9 billion. Equity ETFs and ETPs gathered the largest net inflows year to date with $38.1 billion, followed by leveraged inverse ETFs and ETPs with $2.1 billion, and active ETFs and ETPs with $1.7 billion, while commodity ETFs and ETPs experienced net outflows year to date of $4.2 billion.
“The flows into equity ETFs and ETPs show investors are rotating out of cash and fixed income into equities as investor confidence continues to improve,” says Deborah Fuhr, Managing Partner at London-based ETFGI.
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Source: ETFGI
ETF Investors Are Dumping Gold as if the 12-Year Bull is Dead
March 6, 2013--How big are the recent outflows from gold exchange-traded funds? Let us count the ways.
South Korea’s central bank bought 20 tons of gold in February, which sounds like a lot. But it’s less than one-fifth what exchange-traded fund investors sold over the same time frame, according to Commerzbank’sstrategists.
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Source: Barron's
DB-Synthetic Equity & Index Strategy -North America-House View Update as of March 6th, 2013
March 6, 2013--House View Update as of March 6th, 2013
Positioning for USD strength comeback, removing EUR and Gold
Market Performance
Since the launch of our House View portfolio (HVP) on October 2, 2012, the US equity market (SPY) is up by 7.8%, while the US Fixed Income market (BND) and the Commodity market (DBC) have lost 0.44% and 6.2%, respectively.
Model Performance
Our HVP is up by 3.62% since its launch, and 1.09% higher since the last rebalancing on Feb 7, 2013. In the meantime, the equity market and our multi asset class benchmark are also up by 7.8% and 2.5% since the launch of our HVP, respectively.
Portfolio Updates and New Membership
We added a new FX position focusing on the strengthening of the USD. We decided to allocate 10% to this new position funded by eliminating our previous FX (EURUSD, 5%) and commodity (Gold, 5%) positions.
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Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
ISE Launching Second Options Exchange
March 5, 2013--International Securities Exchange Holdings plans to start a second options market, to be called Topaz Exchange, according to filings with the Securities and Exchange Commission. If approved it will be the twelfth U.S. exchange for equity derivatives.
The operator of the third-largest individual exchange for U.S. options will own the Topaz venue, according to a filing with the Securities and Exchange Commission published on March 1.
Gary Katz, president and chief executive officer of the International Securities Exchange, said it would start a second market to compete with rivals CBOE Holdings Inc., Nasdaq OMX Group Inc. and NYSE Euronext a year ago, according to Bloomberg News, which first reported the base filing.
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Source: Traders Magazine
SEC Publishes ISE's Form 1 Application for a Second Options Exchange
March, 5, 2013--International Securities Exchange Holdings, Inc. (ISE) announced that the U.S. Securities and Exchange Commission (SEC) has published for comment a Form 1 application for ISE's second options exchange.
The new options Exchange is anticipated to be launched in Q2 2013, pending SEC approval. The publication of the Form 1 application represents an important milestone in the process of launching ISE’s second options exchange, which will leverage the existing technology backbone and established member connectivity of ISE’s existing options exchange.
“We are grateful that the SEC has moved forward with the publication of the Form 1 application and we look forward to launching our second exchange soon,” said Gary Katz, President and Chief Executive Officer of ISE. “The new Exchange will enable us to build upon our strong, well-established technology foundation and offer our members a choice in fee and market structure.”
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Source: International Securities Exchange (ISE)
CBOE And C2 Plan To Launch Mini-Options On March 18 For AAPL, AMZN, GOOG, GLD And SPY
March 5, 2013--CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that Chicago Board Options Exchange, Incorporated (CBOE) and C2 Options Exchange (C2) plan to launch trading in "mini-options" that are one-tenth the size of standard options on five popular stocks and exchange traded funds (ETFs).
Mini-options on Apple (AAPL), Amazon (AMZN), Google (GOOG), the SPDR Gold Trust ETF (GLD), and the SPDR S&P 500 ETF Trust (SPY) will begin trading on Monday, March 18.
"Many retail customers hold less than 100 shares of these higher-priced stocks in their portfolios," CBOE Chairman and CEO William J. Brodsky said. "We're excited to begin offering mini-options, which will give investors the ability to hedge their positions and trade options on these stocks more economically than with standard-sized options."
Mini-options contracts feature specifications identical to those of standard-sized options contracts on the above securities, except:
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Source: CBOE
Market Vectors Emerging Markets Local Currency Bond ETF (EMLC) Passes $1.5 Billion Mark
Strong emerging market fundamentals coupled with perceived weakness in developed market currencies have driven interest in EMLC, the first U.S.-listed ETF to provide exposure to local currency EM bonds
March 5, 2013-Market Vectors Emerging Markets Local Currency Bond ETF (NYSE Arca: EMLC), has surpassed $1.5 billion in assets under management (AUM), it was announced today.
EMLC has seen an increase of more than $500 million in AUM in the last three months.
“Many local currency-denominated emerging market bonds are currently delivering more attractive yields than traditional fixed income investments, while at the same time offering currency and credit fundamentals that appear to be on more solid footing than fixed income investments denominated in U.S. Dollars, Euros or the Yen,” said Fran Rodilosso, fixed income portfolio manager at Market Vectors ETFs and one of two EMLC portfolio managers. “EMLC offers an excellent way to gain exposure to this space and the list of constituent countries in the Fund’s underlying index has been growing, with Romania and Nigeria having been recently added.”
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Source: Market Vectors ETFs
