Citi has submitted a regulatory filing with the US Securities & Exchange Commission (SEC) to launch a new series of its exchange-traded notes (ETN) C-Tracks range. The C-Tracks ETNs based on the performance of the Miller/Howard MLP Fundamental Index, Series B will pay a quarterly coupon of $0.3264 per note on July 12, 2017 to holders of record as of the close of business on July 11, 2018.

This coupon reflects the ordinary cash distributions of the MLPs underlying the Miller/Howard MLP Fundamental Index net of fees over this past quarter. Based on their closing price on July 5, 2017 and the declared quarterly coupon, the annualized indicated yield of the ETN is 5.15%. The annualized indicated yield is equal to the declared quarterly coupon multiplied by four, divided by the closing price of the ETN on July 5, 2017.

Citi launched its first C-Tracks Exchange-traded Notes Miller/Howard Strategy Dividend Reinvestor in 2014. The US$100m tranche will mature on September 16, 2024.

Hedge fund professionals anticipate significant rise in use of ETFs this year

Hedge funds' use of exchange-traded funds is set for growth this year, according to new research from Source, one of the largest ETF providers in Europe. The research shows that more than nine out of 10 (92%) hedge fund professionals expect to see this, with the expected rise in volume averaging US$55bn.

According to the Source research on average, hedge fund professionals expect the volume to rise to $55bn by the end of this year, up from around $44bn at the end of 2016, with almost a fifth (19%) forecasting it could rise to over $70bn. The study found that, on average, respondents expect the volume to hit $100bn by early 2021.

The prime motivation cited for using ETFs in hedge fund strategies were low holding costs and management fees, according to two thirds of respondents. Other primary reasons include excellent liquidity (64%); easy access to sector exposure (46%); ability to trade on exchanges (46%); the growing choice of ETFs (42%); and flexibility over long and short positions (42%).

More than half (53%) of respondents said they believe greater numbers of hedge funds - especially smaller ones - will use ETFs to reduce their costs and fees, thereby becoming more competitive.

ProShares aims to outperform in a rising rate environment with new US equity ETF

ETF provider ProShares has launched the ProShares Equities for Rising Rates ETF (EQRR), the first US equity ETF specifically designed to outperform traditional large-cap indexes, such as the S&P 500, in a rising interest rate environment. The fund is benchmarked to the Nasdaq US Large Cap Equities for Rising Rates Index and is listed on the Nasdaq exchange.

The index methodology starts with the 500 largest listed US stocks and selects the five US large-cap sectors that have most recently demonstrated the highest correlation to weekly changes in 10-year US Treasury yields. It then identifies the top 10 stocks in each sector that have the highest correlation of relative performance-versus 500 of the largest listed US stocks-to changes in the 10-Year yield. Stocks in sectors with a higher correlation to rising rates have a heavier weighting in the index. This process is repeated quarterly to maintain a portfolio of 50 stocks. The resulting portfolio aims to provide relative outperformance compared to traditional large-cap indexes during periods of rising US Treasury interest rates.

BlackRock reports global ETP industry gathered $59bn in June

US equities brought in $13.9bn including $5.2bn in large caps and inflows to health care and financials against a backdrop of health care and Fed policy prospects, while broad emerging markets (EM) equities drew in $3.8bn and EM debt flows added $3.2bn as emerging markets remained resilient despite steep declines in oil prices while fixed income drew in $17.6bn, marking June as the best month this year, led by investment grade corporate bonds with $6.6bn

The cumulative $7.5bn inflow in since the start of the year makes EMD the standout area in fixed income ETPs. EMD ETPs are likely to be benefiting as investors seek to diversify their yield exposure, reports BlackRock.

Across all domiciles this year $28.8bn has now flowed into European equity ETPs, with nine consecutive months of inflows, making it the longest inflow run since 2010. With similar drivers to euro denominated investment grade ETPs, and US investors continuing to search for equity risk offshore, there appear to be significant tailwinds behind European equity ETPs at the moment that show no sign of abating, according to the BlackRock report.

Horizon and Ultumus launch ETF data partnership

ETF data Ultumus and Horizon Software (Horizon) have launched a partnership aimed at improving ETF trading efficiencies and providing a single point for analysing and executing ETF trades, allowing market makers and traders to quote and hedge trades more accurately and much faster than before.

The partnership combines Horizon's trading system with the complete reference and composition managed data service for global ETF data provided by Ultumus.

The key benefits include compositions within minutes of an event, rather than the industry-standard of hours; full data coverage, with over 30 header fields, rather than less than 10 available from the vast majority of providers; enhanced economics, such as: tax reclaim, redeem corporation tax, etc., rather than ignoring valuable published data; and validated data points (NAV recalculations, tracking of capital changes, etc.) to ensure data quality rather than simply 'publishing blind'.

BNP Paribas puts Italy at the core of its ETF development plan

BNP Paribas Asset Management (BNPP AM) has confirmed its ambition to develop its indexed management business and triple its ETF assets under management in Europe by 2020, as it expands its coverage of the Italian market.

The French asset manager has listed the first ETF series on Borsa Italiana, to be followed by further moves to widen the range during the year. The use of these instruments has increased and their assets have grown significantly, rising by almost 20% annually over the past 10 years, according to ETFGI (as at April 2017).

BNPP AM manages €17bn of indexed portfolios as at end of March and has a strong ETF platform, with 10 senior managers having more than 15 years of expertise in this area. BNPP AM was also one of the first companies to launch ETFs on the listed real estate market and the MSCI Ex Controversial Weapons indexes.

Six of these ETFs, currently not covered on the Italian market, form part of the "Essential" category and replicate MSCI ex Controversial Weapons indexes, since BNPP AM believes that ethical thematics will increasingly form the basis of client investment choices. Five other ETFs are in the particularly "hot" sector of "Smart Beta". They are the result of our strategic innovation process and exploit a trend which captures outperformance through the exposure to factors such as value, quality, momentum, and low volatility. The last two ETFs are part of the "Thematic" segment and provide exposure to listed real estate and infrastructure investment markets.

USCF launches leverage US oil ETPs

USCF has launched the United States 3X Oil Fund (USOU) and the United States 3X Short Oil Fund (USOD). Both funds are exchange-traded products that issue shares that may be purchased and sold on the NYSE Arca. USOU seeks a return that is 300% of the return of the West Texas Intermediate (WTI) light, sweet crude oil futures contract and USOD seeks a return that is -300% of the return of the WTI light, sweet crude oil futures contract.

USOU and USOD expand the suite of oil-based products offered by USCF. USCF's existing oil-based ETPs include the United States 3X Oil Fund (USOU); United States Oil Fund (USO); United States Brent Oil Fund (BNO); United States 12-Month Oil Fund (USL); United States Short Oil Fund (DNO) and United States 3X Short Oil Fund (USOD).

USCF was the first to launch a US oil ETP, the United States Oil Fund, LP (USO), in 2006. The firm has designed and issued thirteen more specialty products across commodity and equity asset classes. USCF currently manages approximately US$4bn in assets.

AUM in ETFs/ETPs listed globally reach new US4.1tr record

Assets invested in ETFs/ETPs listed globally reached a new record of $4.2tr at the end of first half of 2017, according to ETFGI's June 2017 industry insights report. The Global ETF/ETP industry had 6,965 ETFs/ETPs, with 13,125 listings, assets of $4.2tr, from 328 providers listed on 70 exchanges in 56 countries.

ETFs and ETPs listed globally gathered a record amount of $63.57bn in net inflows in June and a record level of $347.70bn in year to date net inflows. At this point last year there were net inflows of just $123.55bn. iShares gathered the largest net ETF/ETP inflows in June with $28.83bn, followed by Vanguard with $13.38bn and SPDR ETFs with $6.68bn net inflows. YTD, iShares gathered the largest net ETF/ETP inflows with $140.84bn which is above the $137.90bn gathered in all of 2016, followed by Vanguard with $82.31bn and Schwab ETFs with $13.39bn net inflows.

Equity ETFs/ETPs gathered a record level of $41.15bn in net inflows in June, bringing year to date net inflows to a level of US$242.69bn, which is much greater than the net inflows of $15.81bn over the same period last year. Fixed income ETFs and ETPs have gathered a record level of $17.17bn in net inflows in June, growing year to date net inflows to a record level of $80.96bn, which is greater than the same period last year which saw net inflows of $67.98bn. Commodity ETFs/ETPs accumulated net inflows of $1.34bn in June. Year to date, net inflows are at $7.29bn, which is significantly less than the net inflows of $26.31bn gathered over the same period last year.