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Morgan Stanley-US ETF Weekly Update
May 29, 2012--Weekly Flows: $3.1 Billion Net Inflows
ETF Assets Stand at $1.1 Trillion, up 7% YTD
Two ETF Launches Last Week
Copper ETF to Reduce Management Fee
AdvisorShares Announces Reorganization of ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows for the third consecutive week, amid volatile markets
Last week¡¦s net inflows were primarily driven by US Large-Cap ETFs; specifically the SPDR S&P 500 ETF (SPY) generated net
inflows of $2.9 bln
ETF assets stand at $1.1 tln, up 7% YTD; ETFs have posted net inflows 17 out of 21 weeks YTD ($57.8 bln in net inflows)
13-week flows were mostly positive among asset classes; combined $22.2 bln net inflows
Fixed Income ETFs have consistently generated weekly net inflows (41 straight weeks of net inflows) and account for 66% of
ETF net inflows over the past 13 weeks
Emerging Market Equity ETFs exhibited net outflows of $2.7 bln, the most out of any category over the last 13 weeks
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) generated net inflows of $2.9 bln last week, the most of any ETF
US Equity ETFs dominated the top 10 in both largest net inflows (9 of 10) and outflows (7 out of 10) last week
PowerShares QQQ (QQQ) exhibited the largest net outflows last week and over the past 13 weeks
US-Listed ETFs: Short Interest
Data Updated: Based on data as of 5/15/12
SPDR S&P 500 ETF (SPY) posted the largest increase in USD short interest
Despite an increase in USD short interest, SPY¡¦s 275 mln shares short is well below its all-time high of 536 mln shares short on
9/15/11
iShares S&P 100 Index Fund (OEF) exhibited the largest decrease in USD short interest (lowest level of shares short since
7/15/11)
The average shares short/shares outstanding for ETFs is currently 5%
Retail continues to be a heavily shorted industry with the SPDR Retail ETF (XRT) leading the way
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100%
US-Listed ETFs: Most Successful Recent Launches by Assets
Source: Bloomberg, Morgan Stanley Smith Barney Research. Data estimated as of 5/25/12 based on daily change in share counts and daily NAVs.
$6.5 billion in total market cap of ETFs less than 1-year old
Over the past 13 weeks, newly launched Active ETFs generated most net inflows at $1.0 bln (specifically the PIMCO Total Return ETF-BOND)
99 new ETF listings and 17 closures YTD; launches trail last year’s issuance (122) through the last week in May
Over the past year, many of the successful launches have an income/dividend orientation
Five different ETF sponsors and three asset classes represented in top 10 most successful launches
Northern Trust (FlexShares suite) occupies 3 out of the top 10 most successful launches over the past year
Top 10 most successful launches account for 56% of market cap of ETFs launched over the past year
request report
Source: Morgan Stanley
United States Commodity Funds LLC Lowers Fees of United States Copper Index Fund (CPER)
May 29, 2012--United States Commodity Funds LLC (USCF) announced a voluntary reduction in a portion of its management fee for the United States Copper Index Fund (CPER). As of May 29, 2012, the management fee will be reduced from 0.95% to 0.65%.
USCF anticipates that the waiver will remain in place through March 31, 2013. This reduction is voluntary, and may be terminated or modified prior to March 31, 2013, with the approval of USCF's Board of Directors.
Chief Investment Officer John Hyland states, "With CPER, we tried to design both a useful tool for investing in copper exposure over the long term, as well as a useful tool for trading copper exposure over the shorter term. We think that offering it with lower expenses will help generate economies of scale for both trading and investing."
for more info
Source: United States Commodity Funds LLC (USCF)
Precidian files with the SEC
May 29, 2012--Precidian has filed a second amended and restated application for exemptive relief with the SEC.
view filing
Source: SEC.gov
Sage Quant Management LLC files with the SEC
May 29, 2012--Sage Quant Management LLC
has filed an application for exemptive relief with the SEC.
view filing
Source: SEC.gov
Horizons ETFs Launches the World's First Black Swan ETFs
May 29, 2012--Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. ("AlphaPro") are pleased to announce the launch of two innovative exchange traded funds ("ETFs") which will seek to allow investors to gain exposure to North American stock market indices while providing protection from sudden and significant market declines.
Horizons Universa Canadian Black Swan ETF ("HUT") and the Horizons Universa US Black Swan ETF ("HUS.U") (together, the "Black Swan ETFs") are the first ETFs to be launched that pair a tail risk hedge with an equity index investment.
read more
Source: : Horizons ETFs Management (Canada) Inc.
Morningstar Annual Survey Finds Continued Strong Usage of Alternative Investments Among Institutions and Financial Advisors But Growth Slowing
May 29, 2012--Morningstar, Inc., a leading provider of independent investment research, and Barron's, the financial magazine published by Dow Jones and Co., today released highlights of their fourth-annual national survey examining the perception and usage of alternative investments among institutions and financial advisors.
“Institutional investors and financial advisors have significantly expanded their alternative holdings since the 2008 crash, and continue to view alternative investments as an important part of their portfolios,” Scott Burns, director of ETF, closed-end fund, and alternative research for Morningstar, said. "Growth has begun to slow, though, as investors have ramped up their allocations, and excitement may be cooling with the lackluster performance of alternatives relative to the overall market over the last few years."
read more
Source: Morningstar
Invesco Canada announces change of name and index provider for underlying fund of PowerShares Golden Dragon China Class
May 28, 2012--Invesco Canada Ltd. announced today that the NASDAQ OMX Group, Inc. has replaced the Halter Financial Group, Inc. as the index provider for PowerShares Golden Dragon Halter USX China Portfolio
(the "Underlying ETF"). Changes to the holdings of the Underlying ETF will begin to be made effective on or about June 15th, 2012, due to changes in the methodology of the underlying index. Also, the name of the Underlying ETF has changed to PowerShares Golden Dragon China Portfolio.
Created by the NASDAQ OMX Group, Inc., the NASDAQ Golden Dragon China Index is designed to track the performance of leading companies that derive a majority of their revenues from China and have accessed the U.S. capital markets.
read more
Source: Invesco Canada Ltd.
Facebook launch drives ETF interest
May 25, 2012--The Global X Social Media ETF, known by its ticker SOCL, is the first ETF to invest after an accelerated entry into the underlying index was agreed.
As a result, Facebook stock became a constituent in SOCL five trading sessions after the IPO
read more
Source: FT.com
JPMorgan Gave Risk Oversight to Museum Head With AIG Role
May 25, 2012--The three directors who oversee risk at JPMorgan Chase & Co. (JPM) include a museum head who sat on American International Group Inc.'s governance committee in 2008, the grandson of a billionaire and the chief executive officer of a company that makes flight controls and work boots.
What the risk committee of the biggest U.S. lender lacks, and what the five next largest competitors have, are directors who worked at a bank or as financial risk managers. The only member with any Wall Street experience, James Crown, hasn’t been employed in the industry for more than 25 years.
read more
Source: Bloomberg
Treasury Releases Semi-Annual Report to Congress on International Economic and Exchange Rate Policies
May 25, 2012--The U.S. Department of the Treasury today released the Semi-Annual Report to Congress on International Economic and Exchange Rate Policies that is required under Sections 3004 and 3005 of the Omnibus Trade and Competitiveness Act of 1988. The Report covers international economic and foreign exchange developments in the second half of 2011.
Where pertinent and available, data and developments through mid-May 2012 are included.
The Report highlights that conditions in Europe continue to pose a risk to the U.S. recovery, that global growth has been hindered by insufficient demand rebalancing, and that greater exchange rate flexibility is needed – most notably in China. Based on the appreciation of the RMB against the dollar since June 2010, the decline in China's current account surplus, and China's commitments in the G-20 and the U.S.-China Strategic & Economic Dialogue to move more rapidly to a more market-determined exchange rate system, Treasury has concluded that the standards identified in Section 3004 of the Act during the period covered in this Report have not been met with respect to China. Nonetheless, the available evidence suggest the RMB remains significantly undervalued, and we believe further appreciation of the RMB against the dollar and other major currencies is warranted. Treasury will continue to closely monitor the pace of RMB appreciation and press for policy changes that yield greater exchange rate flexibility, a level playing field, and a sustained shift to domestic demand-led growth.
view the Report to Congress on International Economic and Exchange Rate Policies
Source: US Department of the Treasury
