Americas ETP News
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Pimco, the quiet giant among commodity investors: Kemp
August 30, 2012--Pimco is well-known as the world's largest bond fund. But how many people realize it is also the largest investor in commodities, with a portfolio dwarfing the more high-profile pension funds?
And according to one of the most widely used databases, Pimco's flagship fund has been the most successful general commodity fund over the last decade.
With more than $21 billion invested in Pimco's main Commodity Real Return Strategy Fund at the end of June, and another $4.7 billion in the newer Commodity Plus Fund, the California-based investment manager's holdings are far larger than public pension funds with more famous commodity programs like California Public Employees' Retirement System (CalPERS), or PGGM and ABP in the Netherlands
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Source: Reuters
ETNs: Handle With Care
Exchange-traded notes are not for the untutored
August 30, 2012--Over the past 20 years, investors who were once trapped in the cumbersome, relatively expensive vehicle that is the mutual fund have moved in droves to the more flexible realm of the exchange-traded fund, which features lower expenses and intraday trading.
But ETFs come with certain drawbacks, such as taxable distributions and "tracking error"—discrepancies between a fund's value and its underlying index.
One solution to those problems is the ETN, or exchange-traded note, a relatively new product that combines characteristics of bonds and ETFs. It offers intraday trading, is theoretically immune to tracking error, and provides access to asset classes that are otherwise difficult for average investors to buy.
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Source: U.S. News & World Report
SEC Issues Financial Literacy Study Mandated by the Dodd-Frank Act
August 30, 2012--The Securities and Exchange Commission today issued a staff study with findings on what investors want to know about financial professionals and investment products and services, and when and how investors want to receive such information.
"Understanding the needs of investors is critical to carrying out the Commission's investor protection mission," said SEC Chairman Mary L. Schapiro. "The study provides important data and insights that will assist the Commission in its ongoing efforts to help retail investors make informed investing decisions."
Mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the study draws on numerous sources, including online survey research, focus group research, public comments to the SEC, and a Library of Congress review of studies of financial literacy among U.S. retail investors.
view the SEC Staff Study Regarding Financial Literacy Among Investors
Source: SEC.gov
First Trust Readies Tail Hedge ETF
August 29, 2012--First Trust Advisors is bringing the black swan to the New York Stock Exchange.
The exchange-traded fund specialist will offer a volatility tail-risk ETF tomorrow. The First Trust CBOE S&P 500 VIX Tail Hedge Fund will invest in Standard & Poor's 500 Index and call options on the CBOE Volatility Index. The latter will serve as a hedge against big drops in the S&P.
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Source: FIN Alternatives
BMO Financial Group's ETF Business Grows by $1 Billion in Two Months
The ETF business has experienced double-digit growth since June 2012 and recently surpassed $7 billion in assets under management
Three innovative BMO ETFs capturing the attention of Canadian investors
August 29, 2012--BMO Financial Group today announced that its Exchange Traded Fund (ETF)* business has surpassed $7 billion in assets under management (AUM) and has grown by $1 billion (16 per cent) in the last two months alone.
"Our recent success has been driven by flows into ETFs which combine growth with attractive income," said Kevin Gopaul, Chief Investment Officer and Senior Vice President, BMO Asset Management Inc. (BMO AM). "We are extremely proud to have experienced such incredible growth over the last three years and will continue to build on this success by anticipating the needs of investors and delivering exceptional product offerings."
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Source: BMO Financial Group
S&P Pulls Ratings On 10 SPDR Bond ETFs, Including Popular Muni, Junk-Bond Trackers
August 29, 2012--Standard & Poor's Ratings Services said in a press release this afternoon that it withdrew fund credit-quality and volatility ratings for 10 SPDR exchange-traded funds at the request of the funds' investment adviser, State Street Global Advisors (STT).
The group includes the popular SPDR Barclays Capital High Yield Bond ETF (JNK), the SPDR Barclays Capital TIPS ETF (TIP), the SPDR Nuveen Barclays Capital Municipal Bond ETF (TFI) and the SPDR Barclays California Municipal Bond ETF (CXA). As of today, S&P will no longer undertake monthly surveillance of the funds, the release said.
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Source: Barron's
Statement at Open Meeting to Propose Rule Amendments Eliminating the Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings
by Commissioner Troy A. Paredes
U.S. Securities & Exchange Commission
August 29, 2012--Thank you, Chairman Schapiro.
When addressing a joint session of Congress last year, the President expressed his intent to "cut away the red tape that prevents too many rapidly growing startup companies from raising capital and going public."1
On April 5 of this year, the President signed into law the Jumpstart Our Business Startups (JOBS) Act to do exactly that. The goal motivating the bipartisan legislation is to spur our economy and job creation by making it easier for companies to raise the capital they need to invest and hire. In this way, the JOBS Act promotes the SEC’s own mission, which includes facilitating capital formation. In promoting capital formation, the JOBS Act also stands to benefit investors by affording them a wider range of investment opportunities.
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Source: SEC.gov
CFTC Certifies Euro STOXX 50 Ex Financials Index Futures Contract Submitted by Eurex Deutschland
Contract may be Offered to U.S. Persons Through Direct Access Effective August 28, 2012--August 28, 2012-- The Commodity Futures Trading Commission's (CFTC) Division of Market Oversight issued a letter advising Eurex Deutschland (Eurex) that its Euro STOXX 50 Ex Financials Index futures contract submitted by Eurex for review on July 12, 2012, was deemed certified.
The contract satisfies the requirements of the Commodity Exchange Act and the Commission’s Regulations and may be offered or sold to persons in the U.S. through Eurex’s direct access terminals located in the U.S.
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Source: CFTC.gov
Knight Capital head defends leadership
August 28, 2012--The head of Knight Capital defended his leadership of the electronic trading company just weeks after a trading glitch left the company on the verge of bankruptcy, adding that its finances were now as "healthy" as they had ever been.
The statements from Tom Joyce, chief executive and a well-known industry figure, came as Knight named three new directors to its board as part of a $400m bailout it agreed to this month. Investors in the bailout now own about 70 per cent of the company.
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Source: FT.com
DB-Equity Derivatives and Quantitative Strategy Research-North America-US ETF Market Weekly Review : ETP assets reach record high
August 28, 2012--Net Cash Flows Review
Equity markets moved lower last week. Stocks in the US (S&P 500) fell by-0.50%, while abroad, the MSCI EAFE and MSCI EM indices, both in USD terms, declined by -0.04% and -0.53%, respectively.
Among the other asset classes, over the same period: the 10 Yr US Treasury yield declined 13bps. Meanwhile, the DB Liquid Commodity index gained 1.08%, as Agriculture (DB Diversified Agriculture index), WTI Crude Oil, Gold, and Silver prices rose by 0.18%, 0.15%, 3.37%, and 9.59%, respectively. Finally, Volatility (VIX index) rose by 12.86%.
All US ETP products in aggregate had inflows of $2.9bn last week vs. $0.6bn of inflows in the previous week. Cash flows year-to-date total $91.4bn, for a weekly average of $2.7bn.
Equity, Fixed Income, and Commodity ETPs experienced inflows of +$1.3bn, +$0.5bn, and +$0.9bn last week vs. outflows of -$0.5bn and inflows of +$0.3bn and +$0.8bn in the previous week, respectively.
Within Equity ETPs, Large Cap products had the most inflows (+$0.8bn); while Small Cap products had the most outflows (-$0.2bn). Within Fixed Income ETPs, Corporate products had the largest inflows (+$0.5bn); while Sovereign products had the only outflows (-$0.3bn). And within Commodity ETPs, only the precious metals products had significant flows (+$0.9bn).
Top 3 ETPs & ETNs by inflows: SPY (+$0.7bn), GLD (+$0.6bn), VWO (+$0.5bn) Top 3 ETPs & ETNs by outflows: IWM (-$0.2bn), XLV (-$0.2bn), DIA (-$0.2bn)
New Launch Calendar: No New Listings There were no new product listings last week.
Turnover Review: Floor Activity Increased by 16%
Total weekly turnover increased by 16% to $218bn vs. $188bn from the previous week. However, last week’s turnover level was 42% below last year’s weekly average. Equity ETP turnover increased by $21.6bn, or 13.3%, to $184bn. Concurrently, Fixed Income and Commodity ETPs turnover rose by 0.7% ($0.1bn) and 82.9% ($7.6bn), respectively.
Assets under Management (AUM) Review: Assets Rose by 0.3%
Last week, total US ETP AUM reached a new all-time high of $1.219 trillion. Although Equity ETP assets declined by -$2.3bn, Fixed Income and Commodity ETP assets gained $1.8bn and $4.5bn, respectively. As of last Friday, total assets, year-to-date, had grown by 16.6% or $173.4bn.
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http://pull.db-gmresearch.com/p/632-744E/64203527/US_ETF_Market_Weekly_Review_08282012.pdf
Source: Deutsche Bank - Equity Derivatives and Quantitative Strategy Research - North America
