Americas ETP News
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Goldman Sachs Asset Management Chairman Jim O'Neill to Retire
February 5, 2013--Goldman Sachs Group Inc. (GS) economist Jim O'Neill, who bound Brazil to Russia, India and China to form the BRIC investing strategy, will retire this year.
O’Neill, 55, will step down from his current role as chairman of the asset-management division, which he has held since 2010, the New York-based firm said yesterday in a statement. He joined the company in 1995 as a partner, became head of global economics, commodities and strategy research in 2001 and was added to the European management committee in 2006.
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Source: Bloomberg
Vanguard, BlackRock pressured over firearms investments
February 5, 2013--Chicago mayor Rahm Emanuel has called on fund managers including Vanguard and BlackRock to divest from gun manufacturers opposing "commonsense gun reforms."
In letters sent last week to six fund industry chief executive officers, Mr Emanuel said the industry needs to exert its influence with companies blocking reforms including required background checks and an assault weapons ban.
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Source: FT.com
CME Group Volume Averaged 11.4 Million Contracts Per Day In January 2013, Up 18 Percent From December 2012
Increased average Treasury options volume by 72 percent and Treasury futures volume by 23 percent-Increased average foreign exchange volume by 21 percent
February 4, 2013--CME Group, the world's leading and most diverse derivatives marketplace, today announced that January 2013 volume averaged 11.4 million contracts per day, down 2 percent from January 2012, but up 18 percent from December 2012.
Total volume for January 2013 was more than 240 million contracts, of which 87 percent was traded electronically.
In January 2013, CME Group interest rate volume averaged 5.3 million contracts per day, up 2 percent from January 2012, and the second consecutive month with year-over-year growth. Treasury futures volume averaged 2.4 million contracts per day, up 23 percent compared with the same period a year ago. Treasury options volume averaged 532,000 contracts per day, up 72 percent from January 2012, and the second highest monthly volume ever. Weekly Treasury options traded a record 150,446 contracts on January 30, 2013, surpassing the previous record of 101,075 set on September 7, 2012. Eurodollar futures volume averaged 1.9 million contracts per day, down 7 percent from the same period a year ago, while Eurodollar options volume averaged 432,000 contracts per day, down 49 percent from January last year.
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Source: Market Watch
BofA Merrill Introduces Instinct Natural(TM), an Enhanced Global Platform Providing One Pipe for All Equity Order Flow
February 4, 2013--Bank of America Merrill Lynch today unveiled Instinct Natural(TM), an enhancement to its alternative trading system (ATS) Instinct X, aimed at increasing opportunities to execute block trades while minimizing market impact.
“We want to make it easier for our clients to find liquidity so we’ve built a central platform where natural flow can interact,” said Jason D. Crosby, global head of portfolio sales and head of Americas institutional execution services sales. “With Instinct Natural, clients can tap the vast, uncorrelated, natural order flow that comes through our firm. We expect this will quickly become the place to go for size and price improvement.”
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Source: Bank of America
Deutsche Bank-Synthetic Equity & Index Strategy-North America-US ETF Investment Ideas - Implementing DB's 2013 Outlook with ETFs
Where to invest in 2013
Comprehensive ETF guide for DB's investment themes
February 4, 2013--2013 may mark the dawn of the post-crisis era and the comeback of growth
2013 is expected to mark the dawn of the post-crisis era.
Although the outlook is not free from volatility outbursts, central bankers and politicians will most likely act to prevent the level of market turbulences experienced in previous years. In addition, with global growth appearing to bottom out, a more benign stance towards risky assets would be expected. Our house view is for core rates to gradually move higher, and for equities to advance on higher multiple re-rating; all this on a controlled and lower cross-asset correlation setting.
21 ETF Investment Ideas for 2013 In this report we explore 21 different investment themes and provide ETF recommendations for each of them. The first couple of sections of this report focus on the implementation of these themes, while the rest of the report presents our detailed analysis of all 107 products reviewed, and can be used as a comprehensive thematic investment guide.
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Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
Morgan Stanley-US ETF Weekly Update
February 4, 2013--Weekly Flows: $6.8 Billion Net Inflows
11th Consecutive Week of Net Inflows
ETF Assets Stand at $1.4 Trillion, up 6% YTD
Two ETF Launches Last Week
Vanguard Transitions Indices on Four ETFs
US-Listed ETFs: Estimated Flows by Market Segment
ETFs posted net inflows of $6.8 bln last week, the 11th consecutive week of net inflows
Net inflows were led by US Sector & Industry ETFs ($2.1 bln in net inflows last week)
Fixed Income ETFs were the only category we measured to exhibit net outflows last week ($448 mln in net outflows)
Fixed Income market share has slipped to 17% from 18% over the past few weeks
ETF assets stand at $1.4 tln, up 6% YTD; $31.1 bln net inflows YTD
13-week flows were mostly positive among asset classes; combined $78.1 bln in net inflows
US Large-Cap ETFs generated net inflows of $19.3 bln over the last 13 weeks, the most of any ETF category; 52%of US Large-Cap ETF net inflows can be attributed to the SPDR S&P 500 ETF (SPY)
Over the last 13 weeks, Leveraged/Inverse ETFs posted the largest net outflows of any category ($976 mln)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
Financials Select Sector SPDR (XLF) posted net inflows of $396 mln last week, the most of any ETF
Six out of the 10 ETFs to generate the largest net inflows last week were US Sector & Industry based and eight of 10 were US equity based
The two largest high yield bond ETFs, the iShares iBoxx $ High Yield Corporate Bond Fund (HYG) and the SPDR Barclays High Yield Bond ETF (JNK), posted a combined $808 mln in net outflows last week
Despite modest net outflows last week, the iShares MSCI Emerging Markets Index Fund (EEM) has generated net inflows of $10.5 bln over the last 13 weeks, the most of any ETF
US-Listed ETFs: Short Interest
Data Unchanged: Based on data as of 1/15/13
Vanguard FTSE Emerging Markets ETF (VWO) had the largest increase in USD short interest at $900 mln
VWO's shares short are at their highest level of all time; we find the data point interesting because VWO is not typically the vehicle that investors use to get short emerging markets
SPDR S&P 500 ETF (SPY) shares short are at their lowest level since 10/15/12
Aggregate ETF USD short interest decreased by $2.2 bln over the past two weeks ended 1/15/13
The average shares short/shares outstanding for ETFs is currently 5.5%
SPDR Retail ETF (XRT) shares short/shares outstanding eclipsed 1,000% on 1/15/13 as flows into and out of XRT have been very volatile the past few weeks; retail ETFs are consistently some of the most heavily shorted ETFs
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only six ETFs exhibited shares short as a % of shares outstanding greater than 100%)
US-Listed ETFs: Most Successful Recent Launches by Assets
Source: Bloomberg, Morgan Stanley Smith Barney Research. Data estimated as of 2/1/13 based on daily change in share counts and daily NAVs.
$10.3 billion in total market cap of ETFs less than 1-year old
Newly launched Active ETFs account for 46% of the market cap of ETFs launched over the past year; PIMCO Total Return ETF (BOND) is the largest actively managed ETF with a market cap of $4.1 bln
Issuance off to a slow start in 2013; three new ETF listings and three closures YTD (13 announced closures)
The top 10 most successful launches make up 69% of the market cap of ETFs launched over the past year
Six different ETF sponsors and two asset classes represented in top 10 most successful launches
Seven out of the 10 most successful launches over the past year have an income orientation
The iShares MSCI Global Select Metals & Mining Producers Fund (PICK) was the only recently launched ETF to exhibit net outflows last week (modest net outflows of $7 mln)
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Source: Morgan Stanley
United States Commodity Funds LLC announces move to "Electronic K-1s" For Investors in certain Exchange Traded Commodity Funds
February 4, 2013--United States Commodity Funds LLC ("USCF"), the general partner and sponsor of exchange traded commodity funds, including the United States Oil Fund, LP (ticker:USO) and the United States Natural Gas Fund, LP (ticker:UNG), announced new changes to the tax-reporting procedure for the investors in the funds that they sponsor.
These new changes, recently referred to in the financial press as "electronic K-1s", can allow an investor to electronically receive their tax reporting document sooner than in prior years while also allowing investors to decline to receive a printed version.
In prior years, investors in USCF's funds had to wait until each fund mailed the Form K-1 ("K-1") document. Under the new procedure, effective for tax year 2012, investors can elect to sign up in advance for electronic notification that their K-1 is ready. Once notified, they can download the K-1 to their computer, print the K-1, or if they use certain tax preparation software packages, they may elect to download the tax data straight into their tax software program. Finally investors can then elect to opt out of receiving a printed version of their K-1.
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Source: United States Commodity Funds LLC
Knight Capital gears up for equities push
February 4, 2013--Knight Capital, the US broker set for a $1.8bn merger with high-frequency trading firm Getco, is planning a renewed push into European equities as its rivals cut back.
Last week, the New Jersey-based broker signalled it was refocusing on equities by planning to sell non-core units such as its institutional bond trading business, according to The Wall Street Journal.
Albert Maasland, who joined Knight last May as its European chief executive, said the firm was hiring salespeople as part of plans to build market share in European equities.
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Source: Financial News
BlackRock Investment Institute-ETP Flows Quarterly: Behind the Bond Boom
February 4, 2013--Highlights for the fourth quarter include:
ETP flows showed increased risk appetite, with emerging market equities and debt funds both attracting record inflows. Investment grade flows held steady, but investors pulled a small amount out of high yield ETPs.
We provide ratings and industry sector breakdowns for investment grade and high yield ETPs, and highlight the 10 most commonly held individual bonds.
For emerging market debt ETPs, we give a country breakdown that shows Brazilian, Mexican and Russian bonds are most popular.
Inflows into fixed income ETPs typically do not reverse when rates start rising-if (limited) history is any guide.
Volumes of bond ETPs have risen sharply, but liquidity in underlying markets is spotty. Contrary to popular belief, much of fixed income ETP trading does not trickle through to the over-the-counter bond markets.
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Source: BlackRock Investment Institute
Pension funds sue Blackrock, allege "looting" at iShares
February 3, 2013--Two U.S. pension funds have alleged in a lawsuit that Blackrock, the world's biggest asset manager, has looted securities lending returns from iShares exchange-traded funds investors, and breached its fiduciary duties.
In the suit, the pension funds allege that several iShares ETFs spent funds on "grossly excessive compensation" to agents affiliated with the ETFs, as well as on other agents, and they want to recovery the funds for investors.
Blackrock's iShares ETFs have "systematically violated their fiduciary duties, setting up an excessive fee structure designed to loot securities lending returns properly due to iShares investors," they say in the suit, filed on January 18 in the Middle District Court of Tennessee.
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Source: Reuters
