Global ETF News Older than One Year
DB Global Equity Index & ETF Research :Migration into equities continues, with US broad equity and European sector ETF flows showing strength
February 21, 2011--Investment Outlook: US equity indices & European sectors the big equity ETF winners so far this year
The week that finished on February 11th 2011 registered €721 million of inflows, largely driven by equity (€492 million) and, to a lesser extent, commodity flows (€295 million). Fixed income continued to bleed assets, losing €142 million for the week, largely out of sovereign benchmarked ETFs.
Developed non-European equity indices (especially the US S&P 500, MSCI USA and Nasdaq 100 indices) continue to be the biggest beneficiaries of ETF equity flows. This week saw inflows into US indices totaling close to half a billion, while inflows to comparable European equity indices were roughly half of that. Year to date, non-European developed market equity indices (primarily US) have gathered €1.9 billion while comparable European country and regional indices gathered €768 million.
European sectors have also had a very good run, gathering €1.1 billion year to date. Insurance and financial services were the biggest beneficiary with €306 million. Technology and Oil and gas followed with €145 and €141 respectively. The remainder was roughly equally divided among a variety of sectors, signaling an overall sector investing bias rather than strong preference for a single sector.
Commodities received €295 million in cash inflows in the week just passed. Broad commodity benchmarks made up for the bulk of the inflows with €186 million of new capital entering the market. Year to date commodity cash flows are flat with €51 net inflows. This is primarily due to gold outflows, the European commodity ETP sector’s biggest segment lost €614 million so far this year, a theme that is consistent with the return of investors to the equity market.
New Product Launch Calendar: 10 new product launches in the last week
Ten new products were launched and three new listings were introduced into the European ETP market in the past week.
ETFLab launched four ETFs tracking the newly created Euro French government bond Deutsche Börse indices. These were listed on the Deutsche Börse.
Credit Suisse introduced two money market ETFs tracking the Credit Suisse EONIA Total Return (€) index and the Credit Suisse Fed Funds (US$) Effective Rate Total Return index. The same issuer also launched two equity ETFs tracking the MSCI World and the Credit Suisse Alternative Energy indices. All four ETFs were listed on the Swiss Stock Exchange.
UBS launched two equity ETFs, on Deutsche Börse, tracking US benchmarks, namely the S&P 500 and MSCI USA TR index. The secondary share classes of these funds were also listed on the Deutsche Börse.
Assets Under Management (AUM): Modest increase led by inflows
Total European ETP assets increased by 0.6% and ended the week at €237.1 billion.
Equity ETF assets contributed largely to the overall asset increase, adding €1.2 billion from the prior week, reaching €155.4 billion. Most of this increase (60%) is attributed to rising equity markets as most major European benchmarks ended the week on a positive note. Germany’s DAX experienced the highest increase among its peers and rose by 2.2% week on week. The French CAC index, UK’s FTSE 100 and the Euro Stoxx 50 indices were up by 1.3%, 1.1% and 0.7% respectively.
Fixed Income assets experienced a slight decline of 0.5% and closed the week at €41.6 billion. Sovereigns contributed largely to overall decline with a decrease of €203 million week on week. Year to date sovereign assets are down by €1.4 billion.
Cash inflows in broad commodity benchmarks (€186 million) and price appreciation in the precious metals sector, notably the spot price of gold (up 0.4%) and silver (up 1.8%), led to European commodity assets increasing by 1.1% and reaching €37.6 billion.
On-Exchange Total Weekly Turnover: Commodity and fixed income decline
On exchange ETP Total turnover declined by 4.2%, to € 11.3 billion for the week ended on February 11th 2011. Fixed Income and commodities together, contributed largely to the decrease by shaving off close to €600 million. Equity total turnover remained relatively flat week on week at €8.6 billion.
To request a copy of the report
Source: Source: Deutsche Bank Global Equity Index & ETF Research
Exchanges asked to crack down on 'inadequate' reporting
February 21, 2011--Institutional investors with a total of $1.6trn (€1.2trn) in assets under management have written to 30 of the world's largest stock exchanges asking them to address inadequate sustainability reporting by listed companies.
Based on Bloomberg data, the letter also ranks individual listing authorities on a sustainability league table that assesses the current level of environmental social and governance (ESG) disclosure among listed companies.
Source: IP&E
Cowen Group to acquire LaBranche for $192.8m
February 18, 2011--Diversified financial services firm Cowen Group has agreed to acquire LaBranche, a former New York Stock Exchange floor specialist, for approximately $192.8m.
As per the terms of the agreement, LaBranche shareholders will receive upon closing a fixed ratio of 0.9980 of a share of Cowen Class A common stock for each their outstanding common stock.
Source: BBR Prime Brokerages
Trade pact is 'win-win' for South Korea, EU
February 18, 2011-- A sweeping free trade agreement between South Korea and the European Union is a "win-win" deal for both parties, an EU diplomat said Friday after Europe's parliament approved the deal.
The parliament in Strasbourg voted 465-128 for the pact Thursday after securing safeguards to protect Europe's auto industry from tough South Korean rules on fuel efficiency and CO2 emissions.
Source: Eubusiness
BM&FBOVESPA: Memorandum of Understandings (MoU) with Shanghai Stock Exchange will not cover cross listing of company´s stocks
February 18, 2011--Bolsa de Valores, Mercadorias e Futuros (the "Company") announces that, on February 21st, 2011, BM&FBOVESPA and Shanghai Stock Exchange (SSE) will sign a MoU in order to start discussions regarding business opportunities and information exchange.
Unlike articles released by national and international press, this MoU will not cover cross listing of company´s stocks listed in the two exchanges.
Source: WFE
Investing in Public Investment: An Index of Public Investment Efficiency-IMF Working paper
February 17, 2011--Summary: This paper introduces a new index that captures the institutional environment underpinning public investment management across four different stages: project appraisal, selection, implementation, and evaluation.
Covering 71 countries, including 40 low-income countries, the index allows for benchmarking across regions and country groups and for nuanced policy-relevant analysis and identification of specific areas where reform efforts could be prioritized. Potential research venues are outlined.
Investing in Public Investment: An Index of Public Investment Efficiency=IMF working paper
Source: IMF
GDP growth slows to 0.4% in the fourth quarter of 2010
February 17, 2011--Gross domestic product (GDP) in the OECD area grew by 0.4% in the fourth quarter of 2010, down from the 0.6% growth recorded in the previous quarter.
GDP contracted by 0.3% in Japan and by 0.5% in the United Kingdom in the fourth quarter of 2010. In Japan the slowdown partly reflected the unwinding of stimulus measures to boost domestic demand while in the United Kingdom it partly reflected the severe weather; with services and construction being particularly affected.
Growth also slowed in Germany to 0.4% (from 0.7% in the previous quarter) and Italy to 0.1% (from 0.3%). In the United States growth accelerated to 0.8% from 0.6% in the previous quarter and in France and the euro area growth remained broadly stable at 0.3%. While in the European Union growth fell to 0.2% from 0.5% in the previous quarter.
Relative to a year earlier, GDP in the fourth quarter of 2010 expanded by 2.7% in the OECD area, down from 3.2% in the previous quarter. Among Major Seven* economies, Germany at 4.0% had the highest rate and Italy at 1.3% the lowest.
Over the whole of 2010, GDP in the OECD area expanded by 2.9%, significantly up from the sharp decline of 3.5% recorded in 2009.
Source: OECD
IOSCO publishes final report on Intermediary Internal Controls on SFP Price Verification and Regulatory Approaches to Liquidity Risk Management
February 17, 2011--Chapter 1 Background and Purpose of the Project
In May 2008, the IOSCO Technical Committee (TC) published its Report on the Subprime Crisis (Subprime Report).2 The TC noted in the Subprime Report that, among other things, many institutional investors and investment banking firms had inadequate risk modelling and internal controls in place to understand and address the risks they were assuming when buying many types of structured finance products.
The TC further noted the work of the Senior Supervisors Group (SSG) in analyzing this issue.3 As a result of its findings, the TC recommended that its Standing Committee on the Regulation of Market Intermediaries (TCSC3) ?undertake a study of the internal control systems of financial firms, including asset managers, in different IOSCO jurisdictions and develop principles to address any concerns identified.
The Subprime Report also addressed the critical importance of balance sheet liquidity for financial institutions. It observed that firms that proved more resilient during the market turmoil also appear to have more effectively managed their contingent liquidity needs. In some cases, this led firms to forego investments and business lines related to the subprime market because of the contingent liquidity risk they potentially posed. By contrast, firms that experienced greater difficulties tended to not align their treasury functions with their risk management processes, or may have based their contingency funding plans on incomplete or inaccurate information or faulty valuation practices. Indeed, the TC concluded that many institutional investors and investment banking firms had inadequate balance sheet liquidity, even when adequately capitalized.
Source: IOSCO
NYSE and Deutsche Börse set $340m break-up fee
February 17, 2011-NYSE Euronext and Deutsche Börse, who agreed a merger earlier this week, have set a price of €250m for abandoning the deal in favour of another combination.
The large break-up fee is meant to discourage rivals from attempting to break up the deal, which is being done as a stock swap with only a nominal premium being paid for NYSE Euronext shares.
Source: FT.com
Cotton prices hit record as mills scramble
February 17, 2011--Cotton prices have burst through $2 a pound for the first time, threatening sharp rises in the price of jeans, tee-shirts and other everyday clothing, as mills around the globe race to secure supplies.
The gains to record levels have been stoked by a short-term squeeze as the mills have scrambled to buy futures contracts to fix the prices of physical supplies before Friday, the last available day they can do this on the current March contract
Source: FT.com
