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Morgan Stanley-ETF Weekly Update
November 5, 2012--US ETF Weekly Update
Weekly Flows: $5.1 Billion Net Inflows
- ETF Assets Stand at $1.3 Trillion,up 22% YTD
No ETF Launches Last Week
WisdomTree to Make Change to Index
US-Listed ETFs: Estimated Flows by Market Segment
ETF flows snapped back last week as ETFs had net inflows of $5.1 bln during the shortened trading week
11 out of the 14 categories that we measure generated net inflows last week, including three categories with net inflows greater
than $1 bln (Fixed Income, US Large-Cap, and US Mid-Cap)
ETF assets stand at $1.3 tln (up 22% YTD) and have posted net inflows 34 out of 44 weeks in 2012 ($134.6 bln YTD)
13-week flows were mostly positive among asset classes; combined $48.1 bln net inflows
Fixed Income ETFs have posted net inflows 62 out of the past 64 weeks; including $11.6 bln over the past 13 weeks
Notably, International Equity ETFs (20% ETF market share) exhibited a combined $15.5 bln in net inflows over the last 13 weeks vs. US Equity ETFs which generated net inflows of $10.3 bln (45% ETF market share)
US-Listed ETFs: Estimated Largest Flows by Individual ETF
The SPDR S&P 500 ETF (SPY) generated net inflows of $2.5 bln, the most of any ETF
Seven out of the nine Select Sector SPDR ETFs posted positive net flows last week (those seven ETFs posted a combined $1.1 bln in net inflows); partially offsetting prior week’s net outflows (eight of nine had net outflows during the prior week)
Over the past 13 weeks, the SPDR Gold Trust (GLD) has posted net inflows of $4.6 bln, the most of any ETF, as investors have flocked to the precious metal amid global monetary easing
US-Listed ETFs:
Short Interest
Data Unchanged: Based on data as of 10/15/12
PowerShares QQQ (QQQ) had the largest increase in USD short interest at $486 mln
Despite an increase in short interest last period, QQQ’s shares short remained 33% below their average level over the past year
Aggregate ETF USD short interest decreased by $1.1 bln over the past two weeks ended 10/15/12
The average shares short/shares outstanding for ETFs is currently 4.2%
Smaller ETFs by market cap may skew the results (4 of the top 10 with the highest % of shares short have market caps <$25 mln)
Two currency ETFs (CurrencyShares Euro and Yen Trusts-FXE, FXY) are some of the most heavily shorted ETFs; YTD, the funds have exhibited no correlation to each other and investors have often talked about them in conflicting terms (euro=risk on, yen=risk off)
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 11/2/12 based on daily change in share counts and daily NAVs.
$7.3 billion in total market cap of ETFs less than 1-year old
Newly launched Active ETFs account for 51% of the market cap of ETFs launched over the past year
Interestingly, ETF sponsors have avoided launching US Equity ETFs over the past year, especially in the size and sector categories, realizing the space is saturated
141 new ETF listings and 76 closures YTD (additional 3 liquidations have been announced)
The top 10 most successful launches make up 71% of the market cap of ETFs launched over the past year
Five different ETF sponsors and two asset classes represented in top 10 most successful launches
Eight out of the 10 most successful launches over the past year have a fixed income orientation and include both actively and
passively managed ETFs
request report
Source: Morgan Stanley
Educating a Nation of Financial Illiterates
November 5, 2012--Washington has an investor crisis that needs attention. The financial literacy of Americans is at a dangerously low level, at a time when more people have become responsible for their own retirement savings and as the future of government subsistence programs have fallen into question.
A recent government study shows that most citizens don’t know much about how the economy works, they don’t know basic investment concepts such as the difference between stocks and bonds, and they lack rudimentary knowledge about risk, return, and investment planning.
view the FINANCIAL LITERACY AMONG RETAIL INVESTORS
IN THE UNITED STATES report
Source: Forbes
IQ Global Resources ETF (GRES) and IQ Real Return ETF (CPI) Both Outperform Benchmarks at 3-Year Anniversary
GRES has proven itself as an outperforming commodity ETF with low volatility; CPI has proven itself as an outperforming "cash alternative" and a low volatility inflation hedge
November 5, 2012--IndexIQ, a leading developer of index-based, liquid alternative investment solutions, announced today that two of its
Exchange-Traded Funds (ETFs) have marked their third anniversaries on October 27, 2012: the IQ Global Resources ETF (NYSE Arca: GRES) and the IQ Real Return ETF (NYSE Arca: CPI).
GRES was introduced on October 27, 2009 and is the broadest commodities and natural resources ETF, including: livestock; precious metals; grains, food and fiber; energy; industrial metals; plus timber, water, and coal.
read more
Source: Heraldonlonline.com
BlackRock Canada Announces Conversion of BlackRock Silver Bullion Trust to an Exchange Traded Fund
Canadian investors can now access physical silver bullion through the iShares Silver Bullion Fund
November 5, 2012--BlackRock Investments Canada Inc. (BlackRock Canada), an indirect, wholly owned subsidiary of BlackRock, Inc. (NYSE:BLK), today announced that it will be converting the closed-end fund, BlackRock Silver Bullion Trust, into an exchange traded fund (ETF), renamed the iShares Silver Bullion Fund (SVR).
"We are excited to announce the conversion of our SVR fund to an ETF structure that will provide Canadian investors a more liquid and efficient option for accessing exposure to physical silver bullion," said Mary Anne Wiley, Managing Director and Head of iShares at BlackRock Canada. "This conversion further broadens and solidifies our iShares ETF commodity fund family providing investors yet another tool to diversify their portfolio".
Effective November 5, 2012, SVR will become the first and only physical silver bullion ETF listed in Canada offering both hedged and non-hedged units providing investors with the option to invest according to their view of the U.S. to Canadian dollar exchange rate. SVR seeks to replicate the performance of the price of silver bullion, less SVR's fees and expenses. To achieve its investment objective, SVR invests in long-term holdings of unencumbered silver bullion in 1,000 troy ounces international bar sizes. SVR does not speculate with regard to short-term changes in silver bullion prices and is not actively managed.
read more
Source: MarketWatch
CFTC.gov Commitments of Traders Reports Update
November 2, 2012--The current reports for the week of October 30, 2012 are now available.
view more
Source: CFTC.gov
CME Group Volume Averaged 9.9 Million Contracts per Day in October 2012
November 2, 2012--CME Group, the world's leading and most diverse derivatives marketplace, today announced that October 2012 volume averaged 9.9 million contracts per day, down 20 percent from October 2011.
Total volume for October 2012 was more than 227 million contracts, of which 87 percent was traded electronically. In coordination with other financial markets, some CME Group contract markets were closed, either partially or entirely, on October 29 and 30. Excluding those two days, October average daily volume would have been approximately 10.4 million contracts.
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Source: CME Group
CBOE Wins: ISE Prohibited From Trading "ISE Max Spy Index" Options
November 2, 2012--The Chicago Board Options Exchange (CBOE) announced today that the Illinois Court has ruled in favor of CBOE and McGraw-Hill and entered an order that the International Securities Exchange (ISE) would violate a previously-issued injunction if it listed and traded options that ISE calls "ISE Max SPY Index" options.
The court ruled that these options would constitute options on the S&P 500 Index and would violate the court's earlier injunction that had prevented ISE from listing or providing a market for S&P 500 Index options. CBOE holds the exclusive right to provide a market for options on that index.
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Source: CBOE
Total VIX Futures Volume Reaches New All-Tme High In October
Second Consecutive Record Month of Total Volume For VIX Futures and Exchange-Wide Trading
November 1, 2012--The CBOE Futures Exchange, LLC (CFE(R)) announced today that total monthly volume in futures on the CBOE Volatility Index(R) (VIX(R)) reached an all-time high for a second consecutive month in October 2012.
The record trading activity in VIX futures also drove total volume at CFE to a new all-time high.
Total monthly trading activity in VIX futures during October was a new all-time high of 2,443,878 contracts, a gain of 172 percent from the 897,966 contracts traded in October 2011 and up two percent from the 2,400,552 contracts during September, which had been the previous record.
In October, average daily volume (ADV) in VIX futures totaled 116,375 contracts, an increase of 172 percent over the 42,760 contracts per day October 2011 and down eight percent versus the record ADV of 126,345 contracts in September 2012. The month was shortened by two trading days as a result of equity market closures on October 29 and 30 due to the East Coast hurricane.
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Source: CBOE Futures Exchange
ETF Industry Guide-Q3 2012 Update
November 1, 2012--Quarterly ETF Industry Guide
Get the Latest Facts on Every Available ETF
Your quarterly update on 1,263 funds across 42 categories
Visit http://www.statestreetspdrs.com/ to request document.
Source: State Street Global Advisors
CFTC's Division of Clearing and Risk Issues Staff Interpretation Regarding Part 22
November 1, 2012--The staff of the Commodity Futures Trading Commission's Division of Clearing and Risk today issued an interpretation regarding Part 22,
under which Futures Commission Merchants and Derivatives Clearing Organizations must legally segregate each Cleared Swaps Customer’s collateral,
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Source: CFTC.gov
