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ECB-Meeting of 18 March 2020-Account of the monetary policy meeting of the Governing Council of the European Central Bank
April 9, 2020--held by means of a teleconference on Wednesday, 18 March 2020
1. Review of financial and economic developments and policy options
The President started the meeting by observing that, while the policy measures taken by the Governing Council at its monetary policy meeting on 11-12 March 2020 had been well calibrated at the time, the scale of the challenges faced had been highly uncertain.
Meanwhile, the situation had deteriorated significantly, with nearly all euro area countries in full containment mode owing to the rapid spread of the coronavirus (COVID-19).
The situation was unprecedented and the repercussions were also impossible to forecast accurately. Uncertainty on the economic front was creating severe strains in the financial markets, while the message that, first and foremost, fiscal support was required had been well understood, and many governments had already responded. Faced with the risk of the ECB's monetary policy transmission becoming significantly impaired, there was an urgent need for the Governing Council to reassess its policy stance and instruments to address the economic consequences of the evolving coronavirus pandemic.
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Source: ECB
Investors pull 22bn EUR from European ETFs in worst month for funds
April 9, 2020--BlackRock, DWS and UBS among managers with the biggest outflows in March
Europe's rapidly expanding exchange traded fund industry suffered its worst month on record in March as stock markets across the region fell sharply in response to the economic disruption caused by the coronavirus pandemic.
Investors pulled €21.9bn from ETFs listed in Europe in March, the largest monthly withdrawal on record, according to Morningstar, the data provider.
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Source: FT.com
20 years of ETF trading in Europe
April 8, 2020--ETFs established as standardised products for private capital accumulation/The first products in Europe were listed on Xetra on 11 April 2000/Deutsche Börse factsheet shows development of ETF trading
Exchange Traded Funds, better known as ETFs, have seen increasing demand from investors for years due to the continuing trend towards passive investing.
More and more private investors are now using ETFs, especially to build up long-term wealth. 11 April marks the 20th anniversary of the launch of the first two products in Europe.
It all began with two exchange-traded index funds by Merrill Lynch International, which were listed on Deutsche Börse's Xetra market, enabling investors to participate in the performance of the EURO STOXX 50 and the STOXX Europe 50 indices. Today, more than 1,500 ETFs are listed on Xetra. With this selection and a monthly trading volume of €13 billion, Xetra is the leading one for ETFs in Europe.
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Source: Xetra
Initiatives taken to try and help EU Savers and Investors navigate the Economic Fallout from the Coronavirus epidemic
April 7, 2020--The continued spread of the COVID-19 virus around the world and the emergency confinement measures have severely disrupted capital markets. EU Citizens in their capacity as investors and savers are already feeling the squeeze and will be among the first in line to suffer from the economic and financial fallout that will undoubtably ensue following the large array of different financial measures taken by governments and financial institutions.
BETTER FINANCE and its members are scrambling to put tools in place and to provide clear information and guidance for individual investors and financial services users across all EU Member States. Hereunder follows a list of some of the initiatives already up and running:
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Source: betterfinance.eu
ECB-Euro area quarterly balance of payments and international investment position: fourth quarter of 2019
April 7, 2020--Current account surplus at €320 billion (2.7% of euro area GDP) in 2019, down from €361 billion (3.1% of GDP) in 2018.
Geographic counterparts: largest bilateral surpluses vis-à-vis the United Kingdom (€184 billion in 2019, up from €158 billion in 2018) and the United States (€111 billion, down from €133 billion), with largest deficits vis-à-vis offshore centres (€77 billion, up from €9 billion) and China (€69 billion, up from €65 billion).
International investment position at end-2019 showed net liabilities of €63 billion (below 1% of euro area GDP), after net liabilities of €153 billion at the end of the third quarter of 2019.
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Source: ECB
ESMA report stresses impact of costs on retail investor benefits
April 6, 2020--The European Securities and Markets Authority (ESMA), the EU securities regulator, today publishes its second annual statistical report on the cost and performance of retail investment products in the European Union (EU.)
The analysis contained in this report complements ESMA's risk assessment and supervisory convergence work within its investor protection mandate, and contributes to the European Commission's project on cost and performance of investment products under the Capital Markets Union Action Plan.
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Source: ESMA
Retail investors flock to Moscow Exchange in March
April 6, 2020--Retail investors flocked to Moscow's stock exchange in March opening twice as many accounts as the monthly average in 2019 and ploughing more than half a billion dollars into shares during a volatile month's trading.
The Moscow Exchange (MOEX) slumped to a one-year low on March 19 as global investors fled riskier assets due to uncertainty over the coronavirus outbreak and oil prices collapsed as demand worldwide dried up. Since then, the main share index has pared half its losses since mid-February.
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Source: reuters.com
ESMA publishes guidance on performance fees in UCITS and certain AIFs
April 3, 2020--The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, has published today its final guidance on performance fees in investment funds-applicable to Undertakings for the Collective Investment in Transferable Securities (UCITS) and certain types of Alternative Investment Funds (AIFs).
The guidelines provide comprehensive guidance to fund managers when designing performance fee models for the funds they manage, including the assessment of the consistency between the performance fee model and the fund's investment objective, policy and strategy, particularly when the fund is managed in reference to a benchmark.
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Source: ESMA
New Invesco ETF on Xetra: Short-dated US government bonds
April 3, 2020--Since Friday a new Exchange Traded Fund issued by Invesco is tradable via Xetra and Börse Frankfurt.
With the Invesco US Treasury Bond 0-1 Year UCITS ETF EUR Hdg-Acc investors can participate in the performance of US dollar-denominated fixed-interest bonds issued by the US Treasury Department.
The investment universe includes bonds with a minimum maturity of one and a maximum of twelve months. Investors are hedged against currency fluctuations and returns are reinvested.
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Source: Xetra
Sustainable Funds Weather the First Quarter Better Than Conventional Funds
April 3, 2020--These funds were helped by a focus on companies with strong ESG profiles and less exposure to energy.
Like all equity funds, sustainable equity funds suffered sudden and large losses during the first quarter of 2020 because of the coronavirus pandemic, but they held up better than conventional funds.
Seven out of 10 sustainable equity funds finished in the top halves of their Morningstar Categories, and 24 of 26 environmental, social, and governance-tilted index funds outperformed their closest conventional counterparts.
Sustainable Funds Lost Less Than Their Peer Groups
Based on a comparison of the first-quarter returns of 206 sustainable equity open-end and exchange-traded funds available in the United States with those of their respective categories, sustainable funds performed better on a relative basis.
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Source: Morningstar