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Deutsche Bank - Equity Research - North America:US ETF Market Monthly Review : March inflows of $11.6bn help ETPs reach Q1 inflows record
April 4, 2012--US ETP assets recorded 0.7% MoM and 14.1% YTD growth in March
ETP assets in the US rose by $7.9bn to $1.19 trillion last month, accumulating an increase of 14.1% YTD after the first quarter of the year.
Global ETP industry assets edged higher to $1.63 trillion, or 13.3% up YTD.
Investors are still hungry for risk, but more selective
US ETP flows experienced sturdy inflows of $11.6bn during March, recording the strongest Q1 ever (+$52.0bn, 5.0% of last year’s AUM).
Within long-only ETPs, total flows were +$11.2bn in Mar. vs. +$11.6bn in Feb.
Equity, Fixed Income, and Commodity long-only ETPs experienced cash flows of +$7.5bn, +$4.2bn, and -$0.4bn, respectively.
March was overall a favorable month for risk. However, we observed that the main theme played by market participants was to invest in the safest bets among risk-on trades, signaling a certain degree of concern on their part.
According to long-only ETP flows, investors’ equity preferences in March were: (1) region wise, US (+$5.9bn) over other regions or countries. (2) Within the US, Large Caps (+$6.6bn) over Small Caps (-$2.1bn). (3) Among US Sectors, Domestic Cyclicals (+$1.1bn) over Global Cyclicals (-$0.6bn) and Defensives (+$0.5bn). Within domestic cyclicals, Financials (+$1.6bn) and Technology (+$0.6bn). (4) Style wise, dividend funds (+$1.6bn) were again the way to go. (5) And finally, outside the US, there was still some interest in broad EM (+$1.3bn) and Japan (+$0.6bn) products.
While preferences in the fixed income space were: (1) Credit over Rates, but this time with a tilt towards IG (+$2.2bn) over HY (+$1.0bn). (2) Corporates (+$2.7bn) and Sub-Sovereign (+$0.7bn) (e.g. EM Sov. Debt) over US Sovereign debt (-$0.3bn).
ETFs continued to grow faster than Mutual Funds. At the end of February, ETF inflows ($37bn) contributed 3.9% to the YTD ETF AUM growth; while only 0.9% ($76bn) of the YTD Mutual Fund AUM growth was attributable to new cash.
New Launch Calendar: corporate debt and income generation set the tone
There were 13 new ETPs and 1 new ETN listed during the previous month.
The new product offering was dominated by Fixed Income ETFs with focus mostly on the corporate sector; the following group was represented by Equity products with a tilt towards income-generating investments, and one Commodity ETV with focus in Agriculture.
Floor activity improved, but is still on low levels consistent with volatility
Total monthly turnover increased by 9.3% to $1.31 trillion vs. $1.19 trillion in the previous month.
US ETP trading made up 27.3% of all US cash equity trading in March, down from both its recent peak of 37.5% last August and its 3-year monthly average of 30.3%.
The largest increase was on Equity ETP turnover, which rose by $102bn or 9.9% to $1.13 trillion, followed by Fixed Income products turnover which grew by $7.4bn, totaling $76bn at the end of March. Meanwhile, Commodity ETP turnover rose by $973m to $86bn last month.
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Source: Deutsche Bank-Equity Research-North America
Scottrade's FocusShares Celebrates One-Year Anniversary of Focus Morningstar ETFs
April 3, 2012--FocusShares LLC, an affiliate of online investing services firm Scottrade Inc., today announced the one-year anniversary of its Focus Morningstar exchange-traded funds (ETFs), a family of 15 diverse, low-cost domestic equity ETFs benchmarked to Morningstar Indexes.
During the 12-month period ending March 30, 2012, six Focus Morningstar ETFs had total returns of greater than 10 percent: Focus Morningstar Consumer Cyclical Index ETF (FCL), Focus Morningstar Consumer Defensive Index ETF (FCD), Focus Morningstar Health Care Index ETF (FHC), Focus Morningstar Real Estate Index ETF (FRL), Focus Morningstar Technology Index ETF (FTQ) and Focus Morningstar Utilities Index ETF (FUI). In addition, FLG rose 9.5 percent, compared to 8.5 percent for the S&P 500, while Focus™ Morningstar Mid Cap Index ETF (FMM) increased 3.3 percent, compared to 2 percent for the S&P MidCap 400.
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Source: FocusShares, LLC
Minutes Of The Federal Open Market Committee, March 13, 2012
April 3, 2012--The Federal Reserve Board and the Federal Open Market Committee on Tuesday released the attached minutes of the Committee meeting held on March 13, 2012.
The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. The descriptions of economic and financial conditions contained in these minutes are based solely on the information that was available to the Committee at the time of the meeting.
view the Minutes of the Federal Open Market Committee-March 13, 2012
Source: FBR
iShares Launches New Income Focused ETFs
"First-to-market" funds deliver comprehensive access to global high yield markets, from developed to emerging
April 3, 2012--BlackRock, Inc. (NYSE:BLK - News) announced that its iShares Exchange Traded Funds (ETFs) business, the world's largest manager of ETFs, launched two new funds today with two more scheduled to launch on April 5.
The new funds include three "first to market" products designed to offer exposure to high yield securities across the global developed and emerging markets. The fourth new fund is an “ETF of iShares ETFs” that seeks to provide single-trade access to a diversified set of income sources.
"Market conditions – in particular, an unprecedented low rate environment – continue to make it vital for investors of all kinds to identify new sources of yield and income," said Darek Wojnar, Head of U.S. iShares Product Development and Management at BlackRock. “In many cases, they need ready access to a broader range of global solutions for yield and income.
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Source: BlackRock
Financial Stability Oversight Council Approves Rule To Designate Nonbank Financial Companies For Enhanced Oversight, Help Prevent Future Financial Crises
April 3, 2012--The Financial Stability Oversight Council ("the Council") today took another key step toward increasing oversight and addressing risks to U.S. financial stability by issuing the final rule and guidance that details the analysis and process the Council intends to use when determining which nonbank financial companies should be subject to enhanced prudential standards and to supervision by the Board of Governors of the Federal Reserve System.
This authority is an important component of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("the Dodd-Frank Act") and is one of a number of tools now available to constrain risk and help prevent future financial crises.
With this vote, the Council will begin a three-stage designations process. Secretary Geithner, the chairperson of the Council, has indicated that the Council will work to make the first of these designations this year.
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Source: US Department of the Treasury
Horizons ETFs launches innovative Managed Futures ETF
March 3, 2012--Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. ("AlphaPro") are pleased to announce the launch of the Horizons Auspice Managed Futures Index ETF ("Horizons HMF"), an innovative alternative strategy exchange traded fund that offers investors an opportunity to get exposure to a managed futures strategy.
Horizons HMF will offer investors exposure to the Auspice Managed Futures Excess Return Index (the "Auspice Index"), which is a managed futures index developed by Calgary-based Auspice Capital Advisors Ltd. ("Auspice").
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Source: Horizons Exchange Traded Funds Inc
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
April 3, 2012--Standard & Poor's will make the following changes in the S&P/TSX Canadian Indices:
The shareholders of Provident Energy Ltd. (TSX:PVE) have accepted the share exchange offer from Pembina Pipeline Corporation (TSX:PPL).
Provident Energy will be removed from the S&P/TSX Composite and Capped Composite, the S&P/TSX Equity and Capped Equity, the S&P/TSX Completion and Equity Completion, the S&P/TSX Composite Dividend, the S&P/TSX Equity Income and the S&P/TSX Composite Equal Weight Indices effective after the close on Thursday, April 5, 2012.
Pembina Pipeline Corporation (TSX:PPL) has announced the closing of the acquisition of Provident Energy Ltd. As a result of the issuance of shares, the relative weight of Pembina Pipeline will increase in the S&P/TSX Composite and Capped Composite, the S&P/TSX Equity and Capped Equity, the S&P/TSX Equity Income, the S&P/TSX Completion and Equity Completion and the S&P/TSX Composite Dividend indices. These changes will be effective after close on Thursday, April 5, 2012.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Statement Before the Financial Stability Oversight Council-Chairman Gary Gensler
April 3, 2012--Good afternoon. I thank Secretary Geithner for calling today's meeting of the Financial Stability Oversight Council (FSOC). I also thank my fellow regulators and FSOC members for their coordination and consultation on the rule-writing process to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
Lastly, I want to thank the staffs of all the agencies for their efforts in coordinating amongst eight agencies.
I support the final rule and guidance on designations of nonbank financial companies.
Title I of the Dodd-Frank Act authorizes the FSOC to determine whether certain financial companies that are not banks could pose a threat to the financial stability of the United States.
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Source: CFTC.gov
Morgan Stanley-ETF Fund Flows-Preliminary 1Q 2012 ETF Net Cash Flow
April 3, 2012--We estimate that net cash inflows into US-listed ETFs were
$51.6 billion during the first quarter of 2012. This report contains our estimates and analysis of 1Q 2012 ETF flows for the US market. Once official data are released, we will publish our more comprehensive flow analysis
Net inflows into US-listed ETFs were $51.6 billion during 1Q 2012. The 1Q 2012 net cash inflows is the highest quarterly inflow since the fourth quarter of 2009 ($54.6 billion) and is the largest first quarter measured since we began calculating quarterly flows in 2004. US-listed ETF assets are now almost $1.2 trillion, which is up
14% year to date.
The largest net cash inflows went into ETFs tracking fixed income indices. This asset class had net cash inflows of $16.4 billion in 1Q 2012, bringing total assets in Fixed Income ETFs to $203.9 billion (17% of US-listed ETF assets). Emerging Market equity ETFs rebounded from a weak 2011 ($2.1 billion in net outflows) to post the second highest net cash inflows at $11.4 billion in 1Q 2012. Currency ETFs had the largest net cash outflows at $1.4 billion, which is 30% of the segment’s assets as of 3/30/12.
Vanguard’s net cash inflows of $17.3 billion in 1Q 2012 were the largest of any provider. BlackRock had the next highest net cash inflows at $12.2 billion. As of 3/30/11, BlackRock, State Street and Vanguard accounted for over 78% of ETF assets.
There were 76 new ETFs launched and 16 liquidated in the US during 1Q 2012. Of note, BlackRock accounted for 35 of the new launches. As of 3/30/12, there were 34 issuers with 1,226 ETFs. Roughly $9 billion in the total market cap of ETFs is from ETFs issued over the past year. The most successful of these (by total market cap) provide exposure to US stocks exhibiting lower volatility over the prior year and to US dividend-paying stocks.
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Source: Morgan Stanley
SEC Seeks Comment on Investor Testing Regarding Target Date Retirement Funds
April 3, 201-- The Securities and Exchange Commission today said it is seeking comment on the results of investor testing regarding target date retirement funds. The Commission will consider the comments before acting on a proposal it issued in 2010 intended to enhance the information provided to individuals investing in such funds
That proposed rule would generally require target date retirement funds to more prominently disclose the fund's asset allocation at the target date. Under the proposal, the disclosure would have to be placed adjacent to the fund's name the first time the name appears in marketing materials. The proposal also would require marketing materials for target date retirement funds to include a table, chart, or graph depicting the fund's asset allocation over time.
view the Proposed Rule, Reopening of Comment Period
Source: SEC.gov
