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Fees, indexes take center stage in ETF competition
December 24, 2012--Liquidity and cost trump all other benefits of exchange-traded funds for institutional investors.
Yet the basic attributes of this rapidly growing category of products also have large investors shying away from most areas of index and asset class innovation — where costs are higher and trading is lower.
But those areas are where ETF sponsors have focused in recent years.
Horizons ETFs Announces Unit Consolidation
December 24, 2012--Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate Horizons ETFs Management ( Canada ) Inc., the manager and trustee of the Horizons U.S. Dollar ETF (the "ETF"), listed on the Toronto Stock Exchange ("TSX") under the symbols DLR and DLR.U, has announced today that it intends to consolidate the units of the ETF,
as outlined below:
Unit Consolidation
After the TSX has closed for trading on Friday, January 4, 2013 , the units of the ETF will be consolidated on the basis of a ratio (the "Consolidation Ratio") yet to be determined, such that the net asset value ("NAV") of the units of the ETF traded on the TSX under the ticker symbol DLR.U will equal $10.00 USD upon such consolidation. The units of the ETF will begin trading on a consolidated basis on Monday January 7, 2013 , the effective date of the consolidation.
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Source: Horizons Exchange Traded Funds Inc.
Morgan Stanley-US ETF Weekly Update
December 24, 2012--US ETF Weekly Update
Weekly Flows: $9.9 Billion Net Inflows
ETF Assets Stand at $1.3 Trillion, up 27% YTD
Eight ETF Launches Last Week
Invesco PowerShares Announces 13 ETF Closures
Direxion to Close Three ETFs
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $9.9 bln last week, the 5th consecutive week of net inflows
Net inflows were led by US Large-Cap and Emerging Market Equity ETFs, which posted combined net inflows of $9.0 bln
Despite large net inflows as a whole last week, seven of the 15 ETF categories we measured exhibited modest net outflows
Fixed Income ETFs have posted net outflows for two straight weeks, but have posted net inflows of $9.8 bln over the last 13 weeks
ETF assets stand at $1.3 tln (up 27% YTD) and have posted net inflows 40 out of 51 weeks in 2012 ($174.4 bln YTD)
13-week flows were mostly positive among asset classes; combined $52.3 bln net inflows
International Equity ETFs have exhibited net inflows of $23.0 bln over the past 13 weeks
Interestingly, US Small- & Micro-Cap ETFs have posted net outflows of $1.2 bln over the past 13 weeks
US-Listed ETFs: Estimated Largest Flows by Individual ETF
The SPDR S&P 500 ETF (SPY) posted net inflows of $4.4 bln last week, the most of any ETF
SPY has now posted net inflows for five consecutive weeks; over this time period, the fund has posted net inflows of $18.1 bln as investors position for year-end (i.e. tax planning and locking in returns), in our opinion
The iShares MSCI Emerging Markets Index Fund (EEM) had another impressive week, posting net inflows of $1.3 bln; over the last 13 weeks, EEM has exhibited net inflows of $8.0 bln, the most of any ETF
The Technology Select Sector SPDR (XLK) has posted net outflows of $1.6 bln over the last 13 weeks, the most of any ETF
US-Listed ETFs: Short Interest
Data Unchanged:
Based on data as of 11/30/12
iShares Russell 2000 Index Fund (IWM) had the largest increase in USD short interest at $625 mln
IWM’s shares short climbed for the 4th period in a row, however, remain 13% below their 52-week average
Aggregate ETF USD short interest decreased by $154 mln over the past two weeks ended 11/30/12
The average shares short/shares outstanding for ETFs is currently 4.4%
Smaller ETFs by market cap may skew results (three of the top 10 with the highest % of shares short have market caps <$25 mln)
The CurrencyShares Euro Trust (FXE) is the most heavily shorted ETF at 232%; based on recent FXE performance, shorting the euro has not been a good trade
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 12/21/12 based on daily change in share counts and daily NAVs.
$8.7 billion in total market cap of ETFs less than 1-year old
Newly launched Active ETFs account for 50% of the market cap of ETFs launched over the past year; PIMCO Total Return ETF (BOND) is the largest actively managed ETF with a market cap of $3.9 bln
155 new ETF listings and 80 closures YTD (already 16 announced closures to occur in 2013)
The top 10 most successful launches make up 71% of the market cap of ETFs launched over the past year
Five different ETF sponsors and two asset classes represented in top 10 most successful launches
The iShares Core MSCI EAFE ETF (IEFA), part of a series of recently launched low cost, retail-focused ETFs by iShares, generated net inflows of $204 mln last week, the most of any ETF launched over the past year
The four iShares Core ETFs launched this past October have a combined market cap of $601 mln
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Source: Morgan Stanley
CFTC.gov Commitments of Traders Reports Update
December 21, 2012--The current reports for the week of December 18, 2012 are now available.
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Source: CFTC.gov
CFTC's Division of Swap Dealer and Intermediary Oversight Issues No-Action Letter for Certain Persons Required to Register Pursuant
to Recent Changes to Commission Regulations
December 21, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a letter providing that DSIO
will not recommend that the CFTC take enforcement action against certain commodity pool operators(“CPOs”), commodity trading advisors (“CTAs”) or any principal or associated person (“AP”) thereof who will be required to register with the CFTC pursuant to the recent amendment to Commission Regulation 4.5 or the rescission of Commission Regulation 4.13(a)(4).
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Source: CFTC.gov
CFTC's Division of Market Oversight Provides Swap Dealers With Swap Data Reporting Relief
December 21, 2012--The Division of Market Oversight (DMO) of the Commodity Futures Trading Commission (CFTC) today announced the issuance of a letter providing swap dealers with time-limited no-action
relief from certain swap data reporting obligations under Parts 43, 45, and 46 of the Commission’s regulations.
view more CFTC's Office of the General Counsel Issues Time-Limited, No-Action Relief for Compo Equity Total Return Swaps view more CFTC Approves Exemptive Order on Cross-Border Application of the Swaps Provisions of Dodd-Frank view more CFTC's Division of Swap Dealer and Intermediary Oversight Issues No-Action Relief Regarding the Treatment of Swap Transactions Arising from Multilateral Portfolio
Pursuant to Parts 45 and 46
December 21, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Market Oversight (Division) today issued a letter providing reporting parties under Parts 45 and
46 of the Commission’s regulations with time-limited no-action relief from requirements to report certain identifying information regarding their non-reporting counterparties.
Source: CFTC.gov
December 21, 2012--The Commodity Futures Trading Commission's (Commission) Office of the General Counsel (OGC) today issued a no-action letter providing time-limited relief from requirements arising from the
Commission's joint interpretation with the Securities and Exchange Commission that compo equity total return swaps are mixed swaps.
Source: CFTC.gov
December 21, 2012--The Commodity Futures Trading Commission (Commission) today approved an exemptive order providing time-limited relief from certain cross-
border applications of the swaps provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the Commission’s regulations.
Source: CFTC.gov
Compression Exercises for Purposes of Making Calculations Under the Swap Dealer Definition
December 21, 2012--The Commodity Futures Trading Commission's (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a no-action letter that provides relief for persons engaging in multilateral portfolio compression exercises.
The Division will not recommend that the Commission take enforcement action against any person for failure to include in its calculation of the aggregate gross notional amount of swaps connected with its swap dealing activity for purposes of Commission Regulation 1.3(ggg)(4), terminations of swaps view more
Source: CFTC.gov