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Solactive releases Three Thematic Index Families
June 15, 2020--Solactive's three new families of indices address the following themes -National Defense, Aging of America, and Artificial Intelligence. The indices utilize a proprietary Natural Language Processing algorithm, which identifies the constituents for the new index families through the processing of large data sets.
The Solactive Aging of America Index family includes companies providing either therapy to treat diseases disproportionately affecting seniors or age-restricted services such as senior housing facilities. Companies operating in the field of artificial intelligence, including, for example, those working on the development of machines' ability to perform cognitive tasks commonly attributed to the human brain, are included in the Solactive Artificial Intelligence Index family. The Solactive National Defense Index family comprises companies holding a key exposure to defense-related expenditure by the United States or foreign governments. Furthermore, Solactive constructed overlay indices based on the aforementioned base indices. These overlay indices include a volatility target and are calculated on an excess return basis.
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Source: Solactive AG
Majority of ESG funds outperform wider market over 10 years
June 13, 2020--Study of sustainable funds counters claims that ESG investment comes at the expense of performance
Close to six out of 10 sustainable funds delivered higher returns than equivalent conventional funds over the past decade, according to a study that undermines claims that investing based on environmental, social and governance principles hampers performance.
ESG funds have exploded in popularity in recent years as emergencies such as climate change have pushed individuals to invest according to their values. Despite this, debates have persisted over whether a link exists between investing responsibly and achieving outperformance.
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Source: FT.com
ECB-Euro area securities issues statistics: April 2020
June 12, 2020--The annual growth rate of the outstanding amount of debt securities issued by euro area residents increased from 2.8% in March 2020 to 4.5% in April.
For the outstanding amount of listed shares issued by euro area residents, the annual growth rate was 0.0% in April 2020, the same as in March.
Debt securities
New issuance of debt securities by euro area residents totalled EUR 1,003.9 billion in April 2020. Redemptions amounted to EUR 734.4 billion and net issues to EUR 269.5 billion. The annual growth rate of outstanding debt securities issued by euro area residents increased from 2.8% in March 2020 to 4.5% in April.
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Source: ECB
18 years of growth wiped out as lockdown triggers record economic slump
June 12, 2020-Boris Johnson predicts a "bounce back" as the economy reopens following the dire contraction recorded for April
The UK economy suffered its biggest collapse in April as the coronavirus lockdown crushed GDP by more than 20pc.
Added to the fall in output in March, it means deliberate efforts to stop the spread of Covid-19 caused the economy to shrink by a quarter compared with the months before Britons were ordered to stay at home.
It effectively wipes out 18 years of economic growth, taking monthly GDP down to levels last seen in early 2002.
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Source: telegraph.co.uk
OECD Economic Outlook-The world economy on a tightrope
June 10, 2020--The Covid-19 pandemic has triggered the most severe recession in nearly a century and is causing enormous damage to people's health, jobs and well-being, according to the OECD's latest Economic Outlook.
As restrictions begin to ease, the path to economic recovery remains highly uncertain and vulnerable to a second wave of infections.
Strengthening healthcare systems and supporting people and businesses to help adapt to a post-Covid world will be crucial, it says.
The containment measures brought in by most governments were necessary to slow the spread of the virus and limit the death toll, but they have also closed down business activity in many sectors and caused widespread economic hardship.
Policymakers have used a vast array of exceptional measures to support healthcare systems and people's incomes, as well as to help businesses and stabilise financial markets.
view the OECD Economic Outlook-The world economy on a tightrope
Source: OECD
Press Release: 'A new vision for Europe's capital markets'
June 10, 2020--A new vision for Europe's capital markets' has long been required and is needed now more than ever. FESE welcomes the recommendations published today by the High-Level Forum on capital markets union (HLF) in their synonymously named report.
FESE's Blueprint (May 2019): 'Capital Markets Union by 2024-A vision for Europe', which sets out 20 Principles and Policy Recommendations on how to take the Capital Markets Union (CMU) forward, and the European IPO Report (March 2020) called on policy makers to take a step back and reflect upon how we could foster a deeper and more integrated European financial system while continuing to be open to global capital markets. It also asked policy makers to re-double their efforts and take bold decisive steps to ensure the EU remained attractive to global capital and companies, whilst maintaining transparency, integrity and investor protection.
view the FESE A post-crisis framework for European capital markets position paper
Source: FESE
Exclusive: ECB prepares 'bad bank' plan for wave of coronavirus toxic debt
June 10, 2020-- European Central Bank officials are drawing up a scheme to cope with potentially hundreds of billions of euros of unpaid loans in the wake of the coronavirus outbreak, two people familiar with the matter told Reuters.
The project, which comes as Europe mobilises trillions of euros to bolster the region's economy, is aimed at shielding commercial banks from any second fallout from the crisis, if rising unemployment chokes off the income needed to repay loans.
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Source: Reuters
Is the COVID-19 crisis an opportunity to boost the euro as a global currency?
June 5, 2020--The euro never challenged the US dollar, and its international status declined with the euro crisis. Faced with a US administration willing to use its hegemonic currency to extend its domestic policies beyond its borders, Europe is reflecting on how to promote it currency on the global stage to ensure its autonomy.
But promoting a more prominent role for the euro is difficult and involves far-reaching changes to the fabric of the monetary union.
The euro became an international currency when it was created two decades ago. However, the euro's internationalisation peaked as early as 2005 and it was never comparable to the US dollar. Its international status declined with the euro crisis. Faced with a US administration willing to use its hegemonic currency to extend its domestic policies beyond its borders, Europe is reflecting on how to promote actively the internationalisation of the euro, to help ensure its autonomy. But promoting a more prominent role for the euro is difficult and would involve far-reaching changes to the fabric of the monetary union.
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Source: bruegel.org
ESMA provides guidance on the compliance function under MiFID II
June 5, 2020--The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, today publishes the final guidelines on the MiFID II compliance function.
These guidelines replace the ESMA guidelines on the same topic issued in 2012 and include updates that enhance clarity and foster greater convergence in the implementation, and supervision, of the new MiFID II compliance function requirements.
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Source: ESMA
Active funds lead the way in UK market recovery
June 5, 2020--£4bn inflows to retail funds in April after record outflows in March
"Investors are backing active fund managers to help navigate the volatile markets," said Laura Suter, personal finance analyst at investment...
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Source: FT.com