Americas ETP News
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Testimony Before the U.S. House Committee on Financial Services
June 19, 2012--Good morning Chairman Bachus, Ranking Member Frank and members of the Committee. I thank you for inviting me to testify at today's hearing. I'm pleased to be on a panel along with my fellow regulators.
I appreciate the opportunity to discuss the Commodity Futures Trading Commission’s (CFTC) ongoing efforts to implement swaps market reforms, including for the credit default swap (CDS) index products traded by JPMorgan Chase’s Chief Investment Office (CIO).
The CFTC’s Division of Enforcement has opened an investigation related to credit derivative products traded by JPMorgan Chase’s CIO. Although I am unable to provide any specific information about a pending investigation, I will, however, describe generally the Commission’s oversight of the markets for CDS index products.
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Source: CFTC.gov
First Trust North American Energy Infrastructure Fund (EMLP)
Fund Seeks Total Return from a Portfolio Focused on Energy Infrastructure Companies
June 19, 2012--First Trust Advisors L.P. ("First Trust"), a provider of more than 200 investment products, many of which offer transparency, tax efficiency and a rules-based approach to stock selection, announced the launch of a new actively managed exchange-traded fund, First Trust North American Energy Infrastructure Fund (NYSE Arca: EMLP).
The investment objective of the First Trust North American Energy Infrastructure Fund is to seek total return. The Fund’s investment strategy will have an emphasis on current distributions and dividends paid to shareholders. The Fund will invest primarily in companies engaged in the energy infrastructure sector, including publicly-traded master limited partnerships and limited liability companies taxed as partnerships (“MLPs”), MLP affiliates, Canadian income trusts and their successor companies, pipeline companies, utilities, and other companies that derive at least 50% of their revenues from operating or providing services in support of infrastructure assets such as pipelines, power transmission and petroleum and natural gas storage in the petroleum, natural gas and power generation industries.
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Source: First Trust
Huntington Asset Advisors, Inc. Launches EcoLogical Strategy ETF Through New Huntington Strategy Shares
June 19, 2012--Huntington Asset Advisors, Inc. (HAA) announces it is launching actively-managed exchange-traded funds ("ETFs"), through its new ETF family, Huntington Strategy Shares. Huntington EcoLogical Strategy ETF (NYSE Arca: HECO) is the first of two Huntington Strategy Shares planned to launch.
The EcoLogical Strategy ETF has a goal of capital appreciation and will focus on ecologically-focused companies and products, which are positioned to take advantage of continuing changes in laws, consumer behavior and business investments. The ETF holds stocks from companies large and small across a widely-diversified set of industries.
These companies demonstrate environmental stewardship and provide products and services that advance green practices and show evidence of sustainability. With this approach, the ETF may be more correlated to market indices, like the S&P 500, than specific green funds that target clean tech or alternative energy, which may be more limited in scope.
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Source: MSN Money
State Street Global Advisors Launches New Fixed Income SPDR(R) ETFs
June 19, 2012--State Street Global Advisors (SSgA)*, the asset management business of State Street Corporation (STT), today announced that the SPDR BofA Merrill Lynch Crossover Corporate Bond ETF (XOVR) and the SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF (EMCD) began trading on the NYSE Arca on June 19, 2012.
The new SPDR ETFs provide investors with an opportunity to access the attractive yield and total return potential of crossover bonds and emerging market corporate debt.
The SPDR BofA Merrill Lynch Crossover Corporate Bond ETF seeks to track the performance of the BofA Merrill Lynch US Diversified Crossover Corporate Index. The Index is designed to measure the performance of US dollar-denominated BBB and BB corporate debt publicly issued in the US domestic market. “Crossover” corporate debt generally means corporate debt rated at levels where the lower end of investment-grade debt and the higher end of high-yield debt meet. Qualifying securities must be rated BBB1 through BB3 inclusive (based on an average rating of Moody’s Investors Service Inc., Standard & Poor’s Inc and Fitch, Inc.) have a fixed income coupon schedule, have at least one year remaining to final maturity, and a minimum amount of outstanding of $250 million or more of issuance.
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Source: State Street Global Advisors
DB-Equity Research-US ETF Market Weekly Review : Markets and $12bn Inflows boosted ETP assets
June 19, 2012--Net Cash Flows Review
Markets added another week on the positive territory last week. The US (S&P 500) added 1.30%. While, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) recovered an extra 2.32% and 2.35%, respectively.
Moving on to other asset classes, the 10Y US Treasury yield dropped by 5bps last week; while the DB Liquid Commodity Index was down by 0.85%. Similarly, the Agriculture sector (DB Diversified Agriculture Index), and the WTI Crude Oil prices retreated by 2.41%, and 0.08%, respectively; while the Gold, and the Silver prices rose by 2.11% and 0.68%, respectively. Last but not least, Volatility (VIX) edged lower by 0.57% and remained in the low 20s during the same period.
The total US ETP flows from all products registered $12.1bn of inflows during last week vs $3.9bn of inflows the previous week, setting the YTD weekly flows average at +$3.1bn (+$73.4bn YTD in total cash flows).
Equity, Fixed Income, and Commodity ETPs experienced flows of +$9.4bn, +$2.3bn, and +$0.4bn last week vs. +$2.9bn, +$0.8bn, and +$0.4bn the previous week, respectively. We believe that part of the strong inflows to equity ETPs were due to S&P 500 rebalancing related activity.
Within Equity ETPs, large cap and US sector products experienced the largest inflows (+$8.1bn, +$0.9bn respectively); while emerging country vehicles experienced the largest outflows (-$0.3bn). Within Fixed Income ETPs, Corporates products recorded the largest inflows (+$1.9bn), followed by broad benchmarked products (+$0.3bn); while Sovereign experienced outflows of $0.1bn. Within Commodity ETPs, Precious Metals products experienced the largest inflows ($0.4bn).
Top 3 ETPs & ETNs by inflows: SPY (+$7.8bn), CIU (+$0.7bn), LQD (+$0.7bn)
Top 3 ETPs & ETNs by outflows: TLT (-$0.2bn), DIA (-$0.2bn), FXI (-$0.2bn)
New Launch Calendar: oil sands and leveraged growth large cap
There was 1 new ETF and 1 new ETN listed on the NYSE Arca during the previous week. The ETF offers exposure to companies in the Oil Sands business in North America; while the ETN provides access to leverage returns on the Russell 1000 growth index (See Figure 18 for further details).
Turnover Review: floor activity remained fairly stable
Total weekly turnover dropped by 1.3% to $316bn vs. $320bn in the previous week. Last week’s turnover level was 16% below last year’s weekly average. Equity ETPs experienced an increase, rising by $7.5bn or 2.7% to $282bn. In the meantime, Fixed Income and Commodity ETP turnover dropped by 36.1% (-$9.0bn) and 16.4% (-$2.9bn), respectively.
Assets Under Management (AUM) Review: back in the double digits area Fueled by positive markets and strong inflows, ETP asset growth YTD came back to the double digit area with 10.3%. The additional $24.6bn boosted assets by 2.2% on a week over week basis reaching $1.15 trillion at the end of last Friday. Assets for equity, fixed income and commodity ETPs moved +$18.5.bn, +$3.1bn, and +$3.0bn during last week, respectively.
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Source: Deutsche Bank-Equity Research-North America
New Single-Day Volume Record Set On Monday At CBOE Futures Exchange
Volume In VIX Futures Also Reaches New High
June 18, 2012--CBOE Futures Exchange (CFE) announced that Monday, June 18 was the most active trading day in CFE history.
Volume totaled 160,552 contracts traded throughout its full suite of products. Today's record volume surpassed the previous high of 152,133 contracts set on August 5, 2011. In addition, trading volume in futures on the CBOE Volatility Index (the VIX Index) also established a new single-day record today as 159,744 contracts traded, eclipsing the previous record of 152,067 contracts, also on August 5, 2011.
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Source: CBOE
Generational Divide Exists among Nation's Wealthy, Finds U.S. Trust 2012 Insights on Wealth and Worth
June 18, 2012--The U.S. Trust 2012 Insights on Wealth and Worth nationwide survey of 642 high-net
worth and ultra-high-net-worth adults found distinct generational differences in response to new economic realities,
uncertain financial security, a looming elder care crisis and dual financial responsibilities for both children and
parents.
Forty percent of Gen-Xers and Gen-Yers, aged 18 to 46 versus 20 percent of Baby Boomers have established
a financial plan for parents’ elder care needs.
Fifty-four percent of Gen-Xers and Gen-Yers and 42 percent of Baby Boomers have paid medical costs for parents and other relatives.
Gen-Xers and Gen-Yers and the generation older than the Baby Boomers are closely aligned in the importance of intergenerational wealth transfer, with 76 percent of those aged 18 to 46 and 73 percent of those over the age of 67, saying it is important to leave a financial inheritance to their children. The primary reasons for leaving an inheritance are to preserve the continuity of family wealth and to influence their children’s lives after they are gone.
By comparison, only about half (55 percent) of Baby Boomers think it is important to leave a financial inheritance to their children. Among those who don’t think it is important, one in three (31 percent) said they would rather leave money to charity than to their children.
“Our survey points to a shift in generational behavior and outlook, most likely shaped by personal experience and societal responses to economic realities,” said Keith Banks, president of U.S. Trust. “The next generation has not experienced the consistently strong economic growth or investment returns that Baby Boomers experienced during the longest bull market in history.”
view full report-U.S. Trust 2012 Insights on
Wealth and Worth(TM)Annual Survey of High Net Worth and Ultra High Net Worth Americans
Source: U.S. Trust
Morgan Stanley-US ETF Weekly Update
June 18, 2012--US ETF Weekly Update
Weekly Flows: $12.1 Billion Net Inflows
ETF Assets Stand at $1.2 Trillion, up 10% YTD
One ETF Launch Last Week
Van Eck Announces Reverse Share Split on Solar ETF
US-Listed ETFs: Estimated Flows by Market Segment
ETFs had net inflows of $12.1 bln last week; 2nd largest week of 2012
Last week’s flows were primarily driven by US Large-Cap ETFs (specifically SPDR S&P 500 ETF had net inflows of $7.8 bln)
17% of ETFs had net inflows/16% of ETFs had net outflows/67% of ETFs had no net flows last week
ETF assets stand at $1.2 tln, up 10% YTD; ETFs have posted net inflows 19 out of 24 weeks YTD ($72.9 bln in net inflows)
13-week flows were mixed among asset classes; combined $20.1 bln net inflows
Fixed Income ETFs have consistently generated weekly net inflows (44 straight weeks of net inflows totaling $56.3 bln)
Emerging Market Equity ETFs exhibited net outflows of $4.3 bln, the most out of any category
US-Listed ETFs: Estimated Largest Flows by Individual ETF
SPDR S&P 500 ETF (SPY) generated net inflows of $7.8 bln last week, the most of any ETF
SPY’s net inflows accounted for 64% of all net inflows last week; currently has a market cap of $106 bln (59% larger than the
next largest ETF)
Over the last 13 weeks, the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD) posted net inflows of $2.1 bln, the most
of any ETF; six out of the 10 ETFs to generate sizeable net inflows over the period had a fixed income orientation
US-Listed ETFs: Short Interest Data Updated: Based on data as of 5/31/12
SPDR S&P 500 ETF (SPY) posted the largest increase in USD short interest
For the 2nd consecutive period, SPY’s USD short interest increased and SPY’s shares short are at their highest level since 3/15/12
The SPDR Retail ETF (XRT), the most heavily shorted ETF as a % of shares outstanding, exhibited a $540 mln decline in USD
short interest over the prior period, the most of any ETF
The average shares short/shares outstanding for ETFs is currently 5%
XRT’s shares short as a % of shares outstanding declined to 329% from 376% from the prior period
Based on multiple borrowings and the ability to continuously create new shares, shares short as a % of shares outstanding can exceed 100% (only nine 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 6/15/12 based on daily change in share counts and daily NAVs.
$6.8 billion in total market cap of ETFs less than 1-year old
Over the past 13 weeks, newly launched Active ETFs generated most net inflows at $1.3 bln (specifically the PIMCO Total
Return ETF-BOND)
103 new ETF listings and 17 closures YTD
Over the past year, many of the successful launches have an income/dividend orientation
Five different ETF sponsors and three asset classes represented in top 10 most successful launches
BlackRock has launched 52 ETFs over the past year, the most of any ETF sponsor
Top 10 most successful launches account for 62% of market cap of ETFs launched over the past year
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Source: Morgan Stanley
State Street files with the SEC
June 18, 2012--State Street has filed a post-effective amendment no. 86 , registration statement with the SEC for the
SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF
SPDR BofA Merrill Lynch Crossover Corporate Bond ETF (XOVR)
view filing
Source: SEC.gov
EGA Emerging Global Shares files with the SEC
June 18, 2012--EGA Emerging Global Shares has filed a post-effective amendment no.24, registration statement with the SEC for the EGShares Emerging Markets Core ETF
EGShares Emerging Markets Core Dividend ETF and the EGShares Emerging Markets Core Balanced ETF
view filing
Source: SEC.gov
