Global ETF News Older than One Year
BlackRock New Report: ETP Landscape Industry Highlights, H1 2012 ETPs Post Strongest H1 Inflows in History
July 10, 2012--Global ETP YTD overview
First Half 2012 (H1) flows highlights (US$):
Inflows for the first half of 2012 were the largest ever for the global ETP Industry. ETPs attracted net new assets of more than $100bn during the first half of 2012, with particularly strong demand for exposure to income-producing assets
Inflows of $105.0bn during H1 represent a 16% increase on the $90.6bn of flows posted during H1 2011 which held the previous record for the largest flows in H1
As global markets continue to be volatile, investors are using ETPs to capture new and diversified sources of income. Fixed income ETPs attracted $42.0bn in net new assets during H1 in this context, with investment grade corporate bond ETPs seeing inflows of $15.5bn
Fixed income was the main driver of growth attracting 41% of all inflows with $42.0bn on the year, or 114% above 2011’s comparable YTD figure of $19.6bn. Flows into European domiciled fixed income ETPs represented 39% of all EMEA ETP inflows
June was the eighteenth consecutive month in which global fixed income ETPs have attracted net inflows
Other income-focused ETPs, including those providing exposure to high dividend equities, real estate and preferred stocks drew in $17.9bn on a year to date basis in contrast to H1 2011 when the category captured $12.4bn Q2 2012 inflows of $39.6bn were down from Q1 inflows of $65.4bn primarily due to lower equity inflows
June 2012 monthly flow highlights (US$bn)
Equity inflows of $11.9bn in June were on par with May, but composition shifted more toward developed equity. US large-cap equity inflows surged to $5.2 billion after tepid to negative flows in the prior two months
Gold inflows made a comeback in June gathering $2.2bn after two months of outflows. On the flip side, US Treasury ETP (listed globally) inflows surged in May 2012 to $4.5bn and then fell back in June to have outflows of ($132 million). Both asset classes offer some perceived safe haven attributes, but flow trends often diverge
Income-focused ETPs, including those providing exposure to high dividend equities, real estate and preferred stocks drew in $2.3bn in June led by real estate ETPs with $1.2bn
Bond ETP inflows of $5.6 billion in June were driven by investment grade corporate and govt/corp bond funds which gathered $3.2bn and $1.1bn, respectively.
Source: BlackRock Investment Institute
ETFS Precious Metals Weekly: Global Gold ETP Assets Hit Record High on Rising Expectations of QE3
July 9, 2012--Gold ETP holdings hit record high of 77 million ounces as ETP investors anticipate another round of quantitative easing from the
Fed. Although futures market optimism remains weak-net long speculative
positions are hovering near the lowest levels in 3 years- ETP investors
appear to be preparing for gold price performance later this year.
According to Bloomberg data, global ETP gold holdings reached a record high 77mn oz last week, as investors appear to be taking advantage of lower prices to position themselves for another round of Federal Reserve stimulus. Looser monetary policy likely to be dominant driver of gold price in 2012. The US Dollar hit a 2-year high last week versus the Euro, as the deteriorating outlook, particularly for the Eurozone, prompted continued investor deleveraging. US dollar strength has hampered the performance of gold since September 2011, making it less reactive to systemic risk. While politicians have been slow to act, central banks have played a crucial role providing support for the ailing global economy.
This dynamic was highlighted illustrated last week with the ECB cutting interest rates and the BOE increasing its asset purchase scheme in an effort to offset continued policy paralysis at the European government level.
Increasing likelihood of another round of Quantitative Easing from the Fed. Disappointing manufacturing and jobs data in the US last week showed that US economic activity is losing momentum, boosting the likelihood that the US Federal Reserve will introduce with a further round of quantitative easing (QE). While the relationship between gold and the US dollar is not straightforward, following previous episodes of quantitative easing, the gold price has strengthened (and the US Dollar has weakened) when the Federal Reserve has injected liquidity into the financial system.
Gold is likely to be the primary beneficiary of rising expectations of additional liquidity support, as investors have historically looked to gold to help offset the negative effect of rising money supply on a country’s currency. Additionally, with evidence indicating that interest rates will remain at record lows for an extended period, the opportunity cost of holding bullion compared to interest-bearing assets becomes substantially less, increasing gold’s appeal.
visit www.etfsecurities.com for more info
Source: ETF Securities
DCGX Academy: Jul: Risk Return : US Jobs 80,000 Vs 100,000 forecast, joblessness stays at 8.2 %
July 9, 2012--HIGHLIGHTS
COMMODITIES
Oil recovers after two weeks slide as Norway Concerns Linger
Gold Declines as US Jobs data revives risk concerns
Copper rises as China comments on stimulus
Copper Declines 1.2% in Shanghai to 55,040 Yuan per Metric Ton
FOREIGN EXCHANGE
Euro Touches 2-Year Low.
Analysts see Euro decline , effecting Options
Asians decline as US Jobs data less than forecast
Spanish Banks Need to Be Re-Capitalized Moscovici
AUD, NZD at one month low Versus Yen
Source: DCGX Academy
A decent kick down the road
July 9, 2012--In this issue of Macro Matters, we view the results of the EU summit through the prism of our LSE (Liquidity, Surprises, Events) framework for determining risk on/risk off. In short, the expectations for the EU summit were so low that the outcome, a substantial reduction in EU fragmentation risk, can be viewed as positive in the short run.
Indeed, if the summit had failed to achieve any progress, the implications for the length and depth of the current global economic slowdown would no doubt have been dire. In this scenario, we think slowdown would have worsened despite already extremely modest expectations for economic activity around the world. While we are still far away from a complete plan to hold the EU together (forget implementation), and at least a few months away from the end of the soft patch in global growth, downside risks to the economic outlook have fallen as has the risk of Euro fragmentation. The potential failure of the ECB to reinforce this progress at its meeting this Friday is our main concern.
1. What exactly did the EU summit accomplish?
At last week’s summit, the EU needed to relieve the intensifying financial market volatility reflected in rising yields on Spanish and Italian bonds. To achieve this, it had to present credible short-term measures, as well as a medium-term plan, to convince investors there is a credible way out of debt and deficits in the EU. To cut a long story short, there were three broad areas in which progress was urgent going into the summit: 1) a convincing backstop for countries in crisis involving the provision of sufficient liquidity to sovereigns and banks; 2) a plan for at least a Euro Area banking union; and 3) measures designed to boost medium-term growth (i.e. potential GDP so the ability to pay improves).
view the report-A decent kick down the road
Source: Mirae Asset Management
Dow Jones-UBS Commodity Indexes June 2012 Performance Report
July 9, 2012--The Dow Jones-UBS Commodity Index was up 5.49% for the month of June. The
Dow Jones-UBS Single Commodity Indexes for corn, soybean meal and wheat had the strongest gains with
month-end returns of 25.40%, 15.52% and 14.39%, respectively.
The three most significant downside performing single commodity indexes were aluminum, tin and feeder cattle, which ended the month down 4.59%, 4.07%, and 3.41% respectively. Year to date, the Dow Jones-UBS Commodity Index is down 3.74% with the Dow Jones-UBS Soybean Meal Subindex posting the highest gain of 43.75% so far in 2012. Dow Jones-UBS Natural Gas Subindex has the most significant downside YTD performance, down 28.17%.
Source: Mondovisione
Dow Jones Islamic Market Titans 100 Index Closed Up 4.66% In June-Index Measures Performance Of 100 Of World's Leading Shari'ah-Compliant Stocks
Dow Jones Islamic Market Asia/Pacific Titans 25 Index, Dow Jones Islamic Market Europe Titans 25 Index End June In Positive Territory -Dow Jones Islamic Market U.S. Titans 50 Index Gained 4.21%
July 9, 2012--The Dow Jones Islamic Market Titans 100 Index finished June up 4.66%, according to data compiled by S&P Dow Jones Indices. The index measures the performance of 100 of the world's leading Shari'ah-compliant stocks.
The Dow Jones Global Titans 50 Index, which measures the world’s 50 largest companies, posted a June gain of 5.65%.
Regionally, the Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah-compliant stocks in the Asia/Pacific region, increased 2.63% in June; the Dow Jones Asian Titans 50 Index advanced 5.20%.
In Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 the leading Shari’ah-compliant stocks in Europe, rose 7.08% in June; the Dow Jones Europe Titans 80 Index, which measures the performance of 80 blue-chip stocks traded in the developed markets of Europe, gained 8.31%.
Source: Mondovisione
EPFR Global Fund Data News Release-Data, earnings reports, central banks and Europe keep investor compasses spinning
July 6, 2012--Those investors hoping for a more communal approach to underwriting Eurozone debts and further monetary easing got at least some of what they were looking for in early July.
But those steps came against a backdrop of profit warnings and dour macroeconomic data that kept any animal spirits firmly in check. Flows into all EPFR Global-tracked Bond Funds during the week ending July 4 were about a fifth of their year-to-date weekly average while US Exchange Traded Funds (ETFs) accounted for nearly all of the net $8.93 billion absorbed by Equity Funds.
Visit http://www.epfr.com for more info.
Source: EPFR Global
IMF Working paper-The (Other) Deleveraging
July 6, 2012--Summary: Deleveraging has two components--shrinking of balance sheets due to increased haircuts/shedding of assets, and the reduction in the interconnectedness of the financial system.
We focus on the second aspect and show that post-Lehman there has been a significant decline in the interconnectedness in the pledged collateral market between banks and nonbanks. We find that both the collateral and its associated velocity are not rebounding as of end-2011 and still about $4-5 trillion lower than the peak of $10 trillion as of end-2007. This paper updates Singh (2011) and we use this data to compare with the monetary aggregates (largely due to QE efforts in US, Euro area and UK), and discuss the overall financial lubrication that likely impacts the conduct of global monetary policy.
view the IMF Working paper-The (Other) Deleveraging
Source: IMF
IMF Working paper-Intertwined Sovereign and Bank Solvencies in a Model of Self-Fulfilling Crisis
July 6, 2012--Summary: Large fiscal financing needs, both in advanced and emerging market economies, have often been met by borrowing heavily from domestic banks.
As public debt approached sustainability limits in a number of countries, however, high bank exposure to sovereign risk created a fragile inter-dependence between fiscal and bank solvency. This paper presents a simple model of twin (sovereign and banking) crisis that stresses how this interdependence creates conditions conducive to a self-fulfilling crisis.
Source: IMF
BCBS and IOSCO issue consultative paper on margin requirements for non-centrally-cleared derivatives
July 6, 2012--The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) have today published a consultative paper on margin requirements for non-centrally-cleared derivatives.
The paper is available on the websites of the Bank for International Settlements and IOSCO.
In 2009, the G20 Leaders initiated a reform programme to reduce the systemic risk of over-the-counter (OTC) derivatives markets. In particular, a number of measures were agreed to enhance the transparency and regulation of OTC derivatives, including mandatory central clearing. However, mandatory clearing requirements will capture only standardised OTC derivatives. Non-standardised products will thus continue to be non-centrally cleared and will remain subject to bilateral counterparty risk management. In 2011, the G20 Leaders agreed to add margin requirements on non-centrally-cleared derivatives to the reform programme. These requirements can further mitigate systemic risk in the derivatives markets. In addition, they can encourage standardisation and promote central clearing of derivatives by reflecting the generally higher risk of non-centrally-cleared derivatives. The consultative paper published today lays out a set of high-level principles on margining practices and treatment of collateral, and proposes margin requirements for non-centrally-cleared derivatives.
view the Consultative Document-Margin requirements for non-centrally-cleared derivatives
Source: IOSCO
