The Markets February 13, 2012

ETFs Have Best Month of Net Inflows Since September 2010

Strategic Insight, an Asset International company, reports U.S. Exchange-Traded Funds (ETFs) enjoyed $28 billion in net inflows in January.
Reported by

It was the single best month of net inflows for ETFs (including ETNs) since they also drew $28 billion in September 2010. The most popular ETF categories in January were emerging markets equities ($4 billion in net inflows), high yield bond ($4 billion) and large cap growth ($3 billion). The top-drawing ETFs in January were the PowerShares QQQ ($3.3 billion in net inflows) and the Vanguard MSCI Emerging Markets Stock Index ETF ($2.6 billion).

At the end of January 2012, U.S. ETF assets stood at a record $1.15 trillion, up from $1.06 trillion at the end of December.

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The Markets February 13, 2012

Pension Risk Transfer Index Falls 0.30% in January

The Dietrich Pension Risk Transfer Index was nearly unchanged from its prior month’s level of 86.65 and currently sits at 86.35 as of February 1, 2012. 
Reported by

According to Dietrich & Associates, the net unchanged position was driven by modestly lower annuity discount rates, which were offset by modestly higher pension funding levels. The current annuity discount rate proxy embedded within the index is at 3.08%.

“With the Federal Reserve intent on trying to keep interest rates low until at least 2014, the short-term outlook for pension liabilities being reduced by rising interest rates seems unlikely,” said Jay Dinunzio, senior consultant at Dietrich & Associates. “Asset allocation will likely be a key focus for many pension sponsors as they seek to opportunistically increase fixed income exposure. The institutional insurance marketplace has a variety of contract structures available, which may allow risk focused small and mid-sized plan sponsors to access a customized LDI solution where the fixed income investment is tailored to the specific plan liability cash flows.”

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The Dietrich Pension Risk Transfer Index can be found at  https://www.dietrichassociates.com.

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