Americas ETP News
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First Trust Readies Tail Hedge ETF
August 29, 2012--First Trust Advisors is bringing the black swan to the New York Stock Exchange.
The exchange-traded fund specialist will offer a volatility tail-risk ETF tomorrow. The First Trust CBOE S&P 500 VIX Tail Hedge Fund will invest in Standard & Poor's 500 Index and call options on the CBOE Volatility Index. The latter will serve as a hedge against big drops in the S&P.
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Source: FIN Alternatives
BMO Financial Group's ETF Business Grows by $1 Billion in Two Months
The ETF business has experienced double-digit growth since June 2012 and recently surpassed $7 billion in assets under management
Three innovative BMO ETFs capturing the attention of Canadian investors
August 29, 2012--BMO Financial Group today announced that its Exchange Traded Fund (ETF)* business has surpassed $7 billion in assets under management (AUM) and has grown by $1 billion (16 per cent) in the last two months alone.
"Our recent success has been driven by flows into ETFs which combine growth with attractive income," said Kevin Gopaul, Chief Investment Officer and Senior Vice President, BMO Asset Management Inc. (BMO AM). "We are extremely proud to have experienced such incredible growth over the last three years and will continue to build on this success by anticipating the needs of investors and delivering exceptional product offerings."
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Source: BMO Financial Group
S&P Pulls Ratings On 10 SPDR Bond ETFs, Including Popular Muni, Junk-Bond Trackers
August 29, 2012--Standard & Poor's Ratings Services said in a press release this afternoon that it withdrew fund credit-quality and volatility ratings for 10 SPDR exchange-traded funds at the request of the funds' investment adviser, State Street Global Advisors (STT).
The group includes the popular SPDR Barclays Capital High Yield Bond ETF (JNK), the SPDR Barclays Capital TIPS ETF (TIP), the SPDR Nuveen Barclays Capital Municipal Bond ETF (TFI) and the SPDR Barclays California Municipal Bond ETF (CXA). As of today, S&P will no longer undertake monthly surveillance of the funds, the release said.
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Source: Barron's
Statement at Open Meeting to Propose Rule Amendments Eliminating the Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings
by Commissioner Troy A. Paredes
U.S. Securities & Exchange Commission
August 29, 2012--Thank you, Chairman Schapiro.
When addressing a joint session of Congress last year, the President expressed his intent to "cut away the red tape that prevents too many rapidly growing startup companies from raising capital and going public."1
On April 5 of this year, the President signed into law the Jumpstart Our Business Startups (JOBS) Act to do exactly that. The goal motivating the bipartisan legislation is to spur our economy and job creation by making it easier for companies to raise the capital they need to invest and hire. In this way, the JOBS Act promotes the SEC’s own mission, which includes facilitating capital formation. In promoting capital formation, the JOBS Act also stands to benefit investors by affording them a wider range of investment opportunities.
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Source: SEC.gov
CFTC Certifies Euro STOXX 50 Ex Financials Index Futures Contract Submitted by Eurex Deutschland
Contract may be Offered to U.S. Persons Through Direct Access Effective August 28, 2012--August 28, 2012-- The Commodity Futures Trading Commission's (CFTC) Division of Market Oversight issued a letter advising Eurex Deutschland (Eurex) that its Euro STOXX 50 Ex Financials Index futures contract submitted by Eurex for review on July 12, 2012, was deemed certified.
The contract satisfies the requirements of the Commodity Exchange Act and the Commission’s Regulations and may be offered or sold to persons in the U.S. through Eurex’s direct access terminals located in the U.S.
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Source: CFTC.gov
Knight Capital head defends leadership
August 28, 2012--The head of Knight Capital defended his leadership of the electronic trading company just weeks after a trading glitch left the company on the verge of bankruptcy, adding that its finances were now as "healthy" as they had ever been.
The statements from Tom Joyce, chief executive and a well-known industry figure, came as Knight named three new directors to its board as part of a $400m bailout it agreed to this month. Investors in the bailout now own about 70 per cent of the company.
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Source: FT.com
DB-Equity Derivatives and Quantitative Strategy Research-North America-US ETF Market Weekly Review : ETP assets reach record high
August 28, 2012--Net Cash Flows Review
Equity markets moved lower last week. Stocks in the US (S&P 500) fell by-0.50%, while abroad, the MSCI EAFE and MSCI EM indices, both in USD terms, declined by -0.04% and -0.53%, respectively.
Among the other asset classes, over the same period: the 10 Yr US Treasury yield declined 13bps. Meanwhile, the DB Liquid Commodity index gained 1.08%, as Agriculture (DB Diversified Agriculture index), WTI Crude Oil, Gold, and Silver prices rose by 0.18%, 0.15%, 3.37%, and 9.59%, respectively. Finally, Volatility (VIX index) rose by 12.86%.
All US ETP products in aggregate had inflows of $2.9bn last week vs. $0.6bn of inflows in the previous week. Cash flows year-to-date total $91.4bn, for a weekly average of $2.7bn.
Equity, Fixed Income, and Commodity ETPs experienced inflows of +$1.3bn, +$0.5bn, and +$0.9bn last week vs. outflows of -$0.5bn and inflows of +$0.3bn and +$0.8bn in the previous week, respectively.
Within Equity ETPs, Large Cap products had the most inflows (+$0.8bn); while Small Cap products had the most outflows (-$0.2bn). Within Fixed Income ETPs, Corporate products had the largest inflows (+$0.5bn); while Sovereign products had the only outflows (-$0.3bn). And within Commodity ETPs, only the precious metals products had significant flows (+$0.9bn).
Top 3 ETPs & ETNs by inflows: SPY (+$0.7bn), GLD (+$0.6bn), VWO (+$0.5bn) Top 3 ETPs & ETNs by outflows: IWM (-$0.2bn), XLV (-$0.2bn), DIA (-$0.2bn)
New Launch Calendar: No New Listings There were no new product listings last week.
Turnover Review: Floor Activity Increased by 16%
Total weekly turnover increased by 16% to $218bn vs. $188bn from the previous week. However, last week’s turnover level was 42% below last year’s weekly average. Equity ETP turnover increased by $21.6bn, or 13.3%, to $184bn. Concurrently, Fixed Income and Commodity ETPs turnover rose by 0.7% ($0.1bn) and 82.9% ($7.6bn), respectively.
Assets under Management (AUM) Review: Assets Rose by 0.3%
Last week, total US ETP AUM reached a new all-time high of $1.219 trillion. Although Equity ETP assets declined by -$2.3bn, Fixed Income and Commodity ETP assets gained $1.8bn and $4.5bn, respectively. As of last Friday, total assets, year-to-date, had grown by 16.6% or $173.4bn.
The following link will be available for 90 days. For more information, please click on the link for the full PDF. If you have any trouble viewing the link, copy and paste the link in a browser.
http://pull.db-gmresearch.com/p/632-744E/64203527/US_ETF_Market_Weekly_Review_08282012.pdf
Source: Deutsche Bank - Equity Derivatives and Quantitative Strategy Research - North America
BlackRock First ETP Landscape Thematic Report Published on Fixed Income
August 28, 2012--The Fixed Income Special Report provides key highlights on the global Fixed Income Exchange Traded Products (ETPs) industry, as of July 2012.
This report is the first in a new series of thematic reports that offer an in-depth analysis of specific segments and/or significant market trends emerging within the global ETP industry.
Global Fixed Income ETP assets have rapidly grown to $309 billion, delivering a 10 year compound annual growth rate (CAGR) of 57%.1
Global Fixed Income ETP assets could exceed $1 trillion in five years and $2 trillion over the next decade. We believe investor appetite for Bond ETPs will continue over the coming decade spurred by the income needs of aging populations resulting in a larger allocation to Fixed Income assets.2
The Fixed Income ETP market accounts for a mere 0.3% of the $98 trillion global bond market leaving ample room for future growth.
request report
Source: BlackRock Investment Institute
Wall Street Granted Another Brief Reprieve
August 28, 2012--Wall Street received a brief but important reprieve on Monday, as federal regulators quietly postponed another set of new rules.
At first, when regulators announced their action, the delay went undetected. In a statement on Monday, the Commodity Futures Trading Commission instead highlighted how it approved a package of reforms that would bring clarity to derivatives trading, one of the foggiest corners of Wall Street.
But buried in the 254-page document, the agency also granted a separate extension for some rules. The agency’s decision was reached behind closed doors rather than at a public meeting in Washington.
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Source: NY Times
Statement of Support-Internal Business Conduct Standards
Chairman Gary Gensler
August 27, 2012--I support the final rule implementing Congress' direction that the Commission adopt rules for "timely and accurate confirmation, processing, netting, documentation, and valuation of all swaps."
This direction was included in the swaps market reform provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
Each of these requirements promotes crucial back office standards that will reduce risk and increase efficiency in the swaps market. These final rules are critical to the risk management of swap dealers and major swap participants and lowering their risk to the public.
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Source: CFTC.gov
