Americas ETP News
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Asset Manager Regulations Could Crimp Profits: Fitch
December 18, 2013--Treating large asset managers like banks- by requiring tougher capital and liquidity standards, for instance - could result in lower long-term profitability for those firms, but would also beef up balance sheets, Fitch Ratings said this morning as it weighed in on a subject of high interest to BlackRock (BLK), Vanguard Group and a handful of other massive investment managers.
The backstory to the possible treatment of asset managers as so-called "systemically important financial institutions" is a September report by the Treasury Department's Office of Financial Research arguing the use of leverage, concentration risk in certain fund types and the prospect of forced asset sales could worsen risk in the financial system.
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Source: Barron's
Invesco PowerShares Announces Changes to ETF Family
Plans to Change the Indexes and Names of Ten ETFs and Close Four ETFs
December 18, 2013--Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs) with more than $97 billion in franchise assets, announced changes to its product line.
Reflective of its ongoing commitment to place investors' interests first, Invesco PowerShares announced that it plans to change the underlying indexes and names of ten ETFs. In addition, it also announced plans to close four ETFs, which together represent less than 1% of Invesco PowerShares' total assets.
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Source: Invesco PowerShares Capital Management LLC
COO David Brierwood to Retire From MSCI
December 18, 2013--MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, announced today that its Chief Operating Officer, David Brierwood, will retire from MSCI in February 2014.
"We thank David for his valuable service to MSCI, When he joined the company as Chief Operating Officer in 2006, MSCI was a part of Morgan Stanley with a run rate of $300 million. His leadership helped us to become a standalone public company with a run rate of more than $1 billion.
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Source: MSCI
ETP Landscape-2013 Surprises: BlackRock ETP Landscape Special Report
December 18, 2013--Highlights:
The global ETP industry is closing in on another year of strong asset growth. Here are some surprising trends that have emerged in 2013.
ETPs listed in the US grew at a faster rate than in any other region
Developed Markets Equity flows drove industry growth
Emerging Markets Equity flows remain in negative territory for the year
Strategic Beta captured nearly a third of industry flows
Fixed Income experienced a duration rotation but kept growing
Demand and dollars invested in Pan European ETPs reached all-time highs
Monetary and fiscal policy heavily influenced ETP flows
The pace of new launches moderated, yet these funds attracted meaningful assets
US individual investors amped up their ETP usage
Gold outflows were a consistent and significant drag on industry growth
request report
Source: BlackRock ETP Landscape Research
S&P has bad news for this year's top-performing funds
December 17, 2013--S&P Dow Jones Indexes are playing the Grinch for this year's top-performing mutual funds.
In its newly released Persistence Scorecard, the index company reports that the odds of the top-performing funds repeating that success are low at best and only get worse the longer the time frame. The bottom line: If you were thinking about buying new funds that have done well lately, you may want to think again.
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Source: Investment News
High-Speed Trading, Interest Rates Pose Risks, Treasury Says
December 17, 2013--The U.S. financial system's vulnerabilities include a sudden spike in interest rates amid greater risk-taking and high-frequency trading, the Treasury Department said.
While threats to stability have "generally abated" from a year ago, they remain in markets for short-term funding and credit, interest rates and volatility, and in automated, high-speed trading that represents a significant portion of daily equity and foreign exchange volumes, the Treasury's Office of Financial Research said in its annual report released today in Washington.
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Source: Bloomberg
BNY Mellon's latest Product & Policy Newsletter
December 17, 2013---BNY Mellon's latest Product & Policy Newsletter is now available.
Topics covered in this edition:
BNY Mellon's enhanced FX reporting capability
A global market & regulatory update
An exploration of BNY Mellon’s Collateral UniverseSM
A "What If" Equity Characteristic Analysis
An overview of our new Pensioner Website
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Source: BNY Mellon
Treasury International Capital Data for October
December 16, 2013--The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for October 2013. The next release, which will report on data for November 2013, is scheduled for January 16, 2014.
The sum total in October of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $194.9 billion.
Of this, net foreign private inflows were $185.1 billion, and net foreign official inflows were $9.8 billion.
Foreign residents increased their holdings of long-term U.S. securities in October; net purchases were $54.7 billion. Net purchases by private foreign investors were $59.4 billion, while net sales by foreign official institutions were $4.7 billion.
U.S. residents increased their holdings of long-term foreign securities, with net purchases of $19.2 billion.
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Source: US Department of the Treasury
DB-Synthetic Equity & Index Strategy- North America-US ETF Market Weekly Review-Markets push assets lower by $12.6bn amid $7.6bn inflows
December 16, 2013--Data in this report is as of Fri, Dec 13
Market and Net Cash Flows Review
The US (S&P 500) fell by 1.65%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (in USD) dropped by 1.57% and 1.15%, respectively. In the meantime, performance was negative across all US sectors. Healthcare (-2.62%) and Utilities (-2.41%) were the worst performing sectors; The DB Liquid Commodity Index fell by 1.03%; Similarly, the Agriculture sector (DB Diversified Agriculture Index) and the WTI Crude Oil fell by 0.12% and 1.08%, respectively. while, Gold and Silver prices rose by 0.79% and 1.03%, respectively. Moving into other asset classes, the 10Y US Treasury Yield remained unchanged at 2.88%.
Last but not least, Volatility (VIX) rose by 14.29% during the same period.
The total US ETP flows from all products registered $7.6bn (+0.5% of AUM) of inflows during last week vs. $2.7bn (-0.2%) of outflows the previous week, setting the YTD weekly flows average at +$3.4bn (+$169.0bn YTD in total cash flows).
Equity, Fixed Income and Commodity ETPs experienced flows of +$7.4bn (+0.6%), +$0.7bn (+0.3%) and -$0.5bn (-0.9%) last week vs. -$1.4bn (-0.1%), -$0.5bn (-0.2%) and -$0.8bn (-1.3%) in the previous week, respectively.
Among US sectors, Consumer Staples (+$0.5bn, +5.2%) and Energy (+$0.4bn, +1.4%) received the top inflows, while Healthcare (-$0.3bn, -1.1%) and Materials (-$0.1bn, -1.1%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: SPY (+$4.5bn), XLP (+$0.5bn), AGG (+$0.4bn)
Top 3 ETPs & ETNs by outflows: IWM (-$0.5bn), MDY (-$0.3bn), VWO (-$0.3bn)
New Launch Calendar: More income-producing alternatives reach the market
There were two new ETFs and one new ETN listed during the previous week. The three new products offer leveraged (2x) exposure to a diversified portfolio of 30 income-producing, closed-end funds; a covered call strategy based on the Nasdaq-100; and exposure to short-term bonds and money market instruments.
Turnover Review: Floor activity decreased by 9.4%
Total weekly turnover decreased by 9.4% to $279.0bn vs. $307.9bn from the previous week. However, last week's turnover level was 3.5% over last year's weekly average. Equity, Fixed Income and Commodity ETPs turnover decreased by $24.8bn (-9.0%), $2.6bn (-12.7%) and $1.1bn (-10.9%) during the same period, respectively.
Assets under Management (AUM) Review: assets decreased by $12.6bn
US ETP assets dropped by $12.6bn (-0.8%) totaling $1.622 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +21.6% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$12.9bn, +$0.9bn and -$0.6bn during last week, respectively.
visit https://eqindex.db.com/etf/ for more
Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
Burn Notice: Watch out for leveraged ETFs
December 16, 2013--If you buy insurance on your home, you know that most of your losses would be covered in a catastrophe. Can you do the same with your portfolio?
There are lots of ways to buy portfolio insurance, but you have to be careful with leveraged exchange-traded funds (ETFs), which may offer protection, but carry a huge downside risk.
Leveraged ETFs have exploded in popularity in recent years as institutions and individuals are looking for ways to speculate and hedge positions after the 2008 meltdown.
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Source: Reuters
