ETFs para protegerse.


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ETFs para protegerse.

  1. 1. SALES & TRADING COMMENTARY ONLY (NOT A PRODUCT OF RESEARCH)FOR INSTITUTIONAL CLIENTS ONLY DISTRIBUTIONJune 6, 2012ETF Macro InsightsETF Macro Insights highlights MS’ MultiAsset research views, as well the ETFs that may be Morgan Stanleyused to implement the investment strategy. Global PortfolioMS Research raises probability of Greece exit from 25% to 35%. If Greece exits, strong Productscontagion may follow. European ETFs• While a eurozone breakup is not MS’ base case, MS research believes the ramifications of a Greek Jason Warr +44 20 7425-6361 exit are more serious than the market anticipates. MS research increased the probability of an exit from 25% to 35% and reduced the timescale from 5 years to 12-18 months. Philip Philippides +44 20 7677-2819• Should an exit occur, MS research believes it would most likely be followed by contagion with those most materially affected being Italy, Spain, Portugal, and Ireland. MS research believes policy Karin Russell +44 20 7677-8972 response would be essential. Dorcas Phillips• Five key policy responses that could limit a resulting escalation of the crisis and make the Eurozone +44 20 7677-8652 more stable in the long term: US ETFs 1. More aggressive ECB policy action Sanjay Chablaney +1 212 761-5369 2. Recapitalization of peripheral banks via the EFSF/ESM 3. A Federal Deposit Guarantee scheme John Davi 4. Fiscal union 1 212 761-5980 5. ECB becomes the official lender of last resort for a federal Europe Asian ETFs• Below are select MS research views on the Greece situation. William Tsang +852 2848-8867 • Huw van Steenis (Head of European Banks Equity Research). Remains very focused on risks Steve King to bank funding, with the chance of deposit flights from weaker to stronger banks. He remains +852 2848-6772 concerned not only of the intense credit squeeze in Spain and the periphery, but also that banks are severely cutting back their cross-border lending with implications for Eastern Europe, James Meenan UK and Asia. The need for further bank recaps is putting more pressure on sovereigns. +852 3963-3297 • Laurence Mutkin (Global Head of Interest Rate Strategy). Stay away from outright duration Subscribe | Unsubscribe trades during the current environment. However, there are alot of value to be extracted from positioning along the various sovereign yield curves. In the core German and swap markets, we expect 2s10s to flatten and 10s30s to steepen, with 2-year yields anchored close to zero, and 30-year yields susceptible to a dilution of German credit. • Andrew Sheets (Head of European Credit Research). If Greece were to exit, the GBP market would look most attractive. A friendly Central Bank, a currency it can control, and a government apparatus that can react quickly, UK credit and UK RMBS have much less downside in a divorce scenario, while offering similar spreads under more benign cases. • Hans Redeker (Global Head of FX Strategy). Maintains his bearish euro forecast of 1.15. In an ‘Italian Marriage’ scenario, the euro could trade in the 1.15-1.30 range for the next couple of years, before falling to 0.90 thereafter.If Greece were to exit and contagion follows, safe haven assets are likely to rally. Below is a list ofTreasury, Equity Volatility, USD, Yen, Low Volatility, Market Neutral, Dividend, and Gold ETFs. Weshow each ETF’s performance relative to the S&P500 in May.In the month of May, long duration US Treasury, Equity Volatility, and select Market Neutral Strategiesoutperformed the S&P500 (see table below).1 Refer to the European Economics & Strategy report, 24-May-2012.All Returns below computed in USD. ETF Returns are NAV Returns from 30th April 2012 to 31st May 2012.
  2. 2. MS MultiAsset Research Views & Actionable ETF Trade Ideas*Cross Asset• Greg Peters believes Euro centric stresses along with global growth concerns warrant further de- risking. He is reducing macro bets by selling commodities and EM assets. Tail risks remain alive in Europe. Greg views are: 1. Prefer credit (although not overly compelling) over equities and favor yield & carry strategies. 2. In DM, US (IUSA LN, SPXS LN, SPY5 GY) over Europe (IMEU LN, ERO FP, SMSEUR GY), despite more expensive valuations; AxJ (XAXJ GY, AEJ FP) equities cheap, but wait for China (IDFX LN, MXCS LN, ASI FP) stimulus. 3. Neutral on Bunds and Treasuries, the flight to safety bid should keep yields low. 4. Bullish on USD (SEUR LN, EUS3 IM), bearish EUR (SEUP LN, XBJP GY); capital flight diminishes EURs appeal as a reserve currency 5. Cautious on commodities (DJCOMEX GR, LGCU LN, AIGC LN) due to weakness in EM growth and a stronger USD.US Equity• Adam Parker main 4 points for owning dividend paying stocks (1) Historical importance: 40% of totalreturn in past century comes from dividends (2) Economic landscape: Dividends outperform in low growthenvironments (3) Low payout ratios: Payout ratios are near historical lows and have room to increase (4)Attractiveness relative to 10 year: Many dividend paying stocks yield far more than the 10 year. LongDividends / Short Equities is one of our ETF Desk Best Trade Ideas. ETFs: DJDVPEX GR, SPYD GYEM Equity• EM has corrected 16.5% from the peak on March 2, 2012 on weak China data in April and the increasedpossibility of Greece’s exit from the eurozone. That correction has led MXEF to trade close to JonathanGarner’s bear case target price of 900. There is a 31% upside to his scenario weighted target price of1,210. Overall a "W"-shaped market trough looks likely on valuations (current P/B of 1.44x, forward P/E of9.0x and ERP of 990bp), which back-tests for returns in the range of 22% to 44% six months out with hitratios of 83-100%). OW countries: China (FXC LN, MXCS LN, LCHU LN), Russia (RUSS LN, RDXS LN,RUS FP), Korea (IKOR LN, HKOR LN, KRW FP), Indonesia (XMID LN, HIDR LN, INDO FP) and Malaysia(XCS3 LN, MAL FP, HMYR LN). UW countries: Mexico ( D5BI GY, CSMXCP SW, HMEX LN ), India (NFTYLN, MXIS LN, CI2 FP, CSIN SW), Turkey (ITKY LN, TUR FP, HTRD LN), Thailand (XCS4 LN, THA FP),Egypt (VEFG GR, EGPT US), Czech, and Hungary (BUXETF HB)European Equity• Graham Secker remains cautious in absence of positive catalysts. He remains a modest OW indefensives vs. UW in cyclicals. For the last few years, he has advocated a structural preference for qualityand growth stocks against backdrop of anemic growth and macro volatility, similar to the environment of theNifty Fifty stocks of the 1960s and 1970s. It is also worth looking at select tactical opportunities in the valuespace given strong outperformance of growth in recent months and historical signal for rotation back intovalue. MSCI Europe ETFs: IMEU LN, ERO FP, SMSEUR GY. European Financials ETF (STZ FP, SXFPEXGY, XFPS GR).FX• EUR stabilization suggests markets are focusing on the global growth, which has been disappointing.Weak global growth & banks tightening standards means one common theme, balance-sheet contraction.UK banks announced tighter standards & have increased lending rates, the GBP impact should benegative. With the BoJ easing and global rebalancing taking place, do not get JPY bearish too early. OurFX Strategists maintains their bearish euro forecast of 1.15. EUR ETFs: SEUP LN, XBJP GYUS IG Credit• Rizwan Hussain remains neutral on US investment grade credit but is incrementally bullish. Factorscould get to his bull case are (1) UST yields grinding higher with low levels of rate vol (2) US growth closerto 3% (3) earnings estimates continuing to trend upwards (4) falling excess return volatility (5) a return topre-crisis valuations based on current levels of leverage. ETFs : LQDE LN.US HY Credit• The short term risks in HY are binary but on a longer term basis (6-12 mo), Adam Richmond maintains anOW position and believes high yield credit is the relative winner in the current low-growth/low-yieldingenvironment. Despite rising risk aversion on the back of renewed European sovereign fears, Adam remainsa buyer of high yield as valuations are still fairly positive. HY continues to offer among the most attractiveyields relative to its volatility. ETFs: SHYU LN, STHY LN
  3. 3. EM Fixed Income• Rashique Rahman has been cautious on EM fixed income for most of this year and particularly sinceMarch. Greece, debt sustainability in the Eurozone, and moderation in global growth were the primarycatalysts. EM Fixed Income ETFs: IEMB LN, SYBM GY, EMLB LN, XEMB GY, LEMB LN, AGEB FPAsian Credit• Viktor is overweight in Asia high yield, and it now stands beside US HY as the team’s favorite segmentwithin credit. Data increasingly suggest that we’ve passed an important inflection point in China after nearlytwo years of tight credit. China high yield has historically been very sensitive to turns in credit growthcycles, and with credit conditions improving, as we saw with the March loan growth numbers, Viktorbelieves recovery is supported. Viktor estimates that China HY is the biggest underweight amonginstitutions involved in Asian credit markets. EM Credit ETFs: EMHY US, CEMB US, EMCB US, DSUMUSCommodities• Hussein Allidina believes the path of least resistance for oil is down, especially as bearish catalystscontinue to emerge. European sovereign debt issuers, easing global tension, and bearish fundamentalshave started to weigh on oil prices. ETPs : SOIL LN, XETA GY, XETW GY. He remains a buyer of Gold(PHAU LN, SGLD LN, SGLN LN) and thinks the recent market activity is consistent with distressedselling and long liquidation. Negative real interest rates, the prospect of further unconventionalmonetary policy in the US and Europe to confront uncertainties on the growth outlook, and heightedpolitical tensions in Middle East are all expected to underpin strong investment demand.
  4. 4. Disclaimer: The information provided herein was prepared by Morgan Stanley & Co. LLC (“Morgan Stanley”), but isnot a product of Morgan Stanleys Equity or Fixed Income Research Departments. This communication is not aresearch report, though it may refer to a Morgan Stanley research report or the views of a Morgan Stanley researchanalyst. We are not commenting on the fundamentals of any companies mentioned. Unless indicated, all viewsexpressed herein are the views of the author’s and may differ from or conflict with those of the Morgan Stanley Equityor Fixed Income Research Departments or others in the Firm. We do not represent that this publication is accurateor complete and we do not undertake to advise investors of changes in the opinions or information contained herein.Investors should note the date of this communication. For additional information, research reports and importantdisclosures, see performance data included herein represents past performance. Past performance does not guarantee futureresults. Investment return and principal value of an investment will fluctuate so that an investors shares, whenredeemed, may be worth more or less than their original cost. Current performance may be lower or higher than theperformance data quoted.Please click on the following link for closing market price and net asset value (“NAV”) performance data for periods of1, 5, and 10 years (or the life of the fund, if shorter) for funds discussed in this communication: be advised that Morgan Stanley’s Institutional Equity Division frequently trades as principal and may haverecently traded in the securities that are the discussed in this communication. As a result, Morgan Stanley may havea long or short position in these securities and may or may not have traded in a manner that is consistent with theabove comments prior to its dissemination.We remind investors that these investments are subject to market risk and will fluctuate in value. Investors mayobtain prospectuses for the funds described in this sales communication from the ETF distributor. The distributor forthe iShares and ProShares ETFs is SEI Investments Distribution Co. The distributor for Dow Diamonds, S&P 500,Mid Cap SPDRs SPDRs, Nasdaq 100 Index, US Oil Fund ETF (USO), and Select Sector SPDRs is Alps Mutual FundServices. The distributor for streetTRACKS is State Street Capital Markets, LLC. The distributor for the SPDR GoldTrust ETF (GLD) and the KBW Regional Banking ETF is State Street Global Markets, LLC. The distributor for theVanguard ETFs is Vanguard Marketing Corporation. The distributor for Rydex ETFs is Rydex Distributors, Inc. Thedistributor for WisdomTree ETFs is ALPS Distributor, Inc. The distributor for Claymore ETFs is Claymore Securities,Inc. The distributor for PowerShares is Invesco Aim Distributors, Inc. The distributor for ProShares is SEIInvestments Distribution Co. The distributor for iPath ETNs is Barclays Capital Inc. The distributor for MarketVectors ETFs is Van Eck Securities Corp. The distributor for Claymore ETFs is Claymore Securities Inc. Thedistributor for Bear Stearns ETF is Bear Stearns & Co. Inc. The distributor for Direxion Shares andRevenueShares™ ETFs is Foreside Fund Services LLC. The distributor for ELEMENTSSM ETNs is NuveenInvestments/Merrill Lynch & Co. The distributor for First Trust ETFs is First Trust Portfolios L.P. The distributor forMacroSharesTM ETFs is W.R. Hambrecht & Co., LLC. The distributor for RydexSharesTM is Rydex Distributors,Inc. The distributor for UBS E-TRACS ETNs is UBS Securities LLC. The prospectuses contain more complete andimportant information about the ETFs and should be read carefully before investing. We define exchange-tradedfunds as encompassing passively managed index-linked exchange-traded funds, HOLDRs, and closed-endfunds. This report is focused on US exchange-traded funds. These funds are registered with the SEC and trade as asingle stock under SEC exemptions. ETFs are (i) redeemable only in creation unit size aggregations and may not beindividually redeemed, (ii) redeemable only through Authorized Participants, and (iii) redeemable on an “in-kind”basis.ETFs do not charge sales loads or other nonrecurring fees, but you may pay a brokerage commission on thepurchase or sale of ETF shares. Any performance data shown in this communication does not reflect the deduction ofa brokerage commission, which would reduce the performance quoted.Please contact your Morgan Stanley representative for the name of the name of the distributor of any fundsmentioned in this sales communication that have not been included above.Copyright © by Morgan Stanley 2012, all rights reserved.