Global ETF News For The Past Year
White-label ETF provider agreement highlights Europe challenges
November 21, 2023--HANetf and Tidal have agreed to collaborate so their respective clients can launch ETFs in the US and Europe
An innovative tie-up between Europe's dominant third-party exchange traded fund platform and a giant of the US market has been heralded as a breakthrough paving the way to greater choice for investors on both sides of the Atlantic.
However, the deal may also signal the difficulty of getting a so-called "white label" ETF business off the ground in a fragmented European market, with its multiplicity of countries, currencies, languages and regulatory regimes.
Central Bank Digital Currency Development Enters the Next Phase
November 20, 2023--Many of the world's monetary authorities are seeking more guidance on how best to pursue digital forms of central bank money
Central bank digital currencies can improve payment systems as well as financial inclusion-if they are appropriately designed. If not, they could pose risks.
While not all countries may see an immediate case to deploy a CBDC, many countries are exploring CBDCs so they will have the option to introduce one in the future if it becomes pertinent for them. Benefits are more likely to come in time, following the policies pursued by countries and the private sector's response, as well as the evolution of technology.
Central Bank Digital Currency Development Enters the Next Phase
November 20, 2023--Many of the world's monetary authorities are seeking more guidance on how best to pursue digital forms of central bank money
Central bank digital currencies can improve payment systems as well as financial inclusion-if they are appropriately designed. If not, they could pose risks.
While not all countries may see an immediate case to deploy a CBDC, many countries are exploring CBDCs so they will have the option to introduce one in the future if it becomes pertinent for them. Benefits are more likely to come in time, following the policies pursued by countries and the private sector's response, as well as the evolution of technology.
Is FinTech Eating the Bank's Lunch?
November 17, 2023--This paper examines how the growing presence of FinTech firms affects the performance of traditional financial institutions. The findings point to a negative impact on profitability, primarily due to a reduction in interest income and a rise in operational costs.
Although established financial institutions have tried to diversify their revenue streams, these efforts have proven inadequate to offset the losses associated with increased competition from FinTech firms.
Our study also reveals that various FinTech business models, such as Peer-to-Peer (P2P) lending and Balance Sheet lending, have varying effects on financial institutions. Cooperative banks experience more significant profit deterioration under both models, whereas (larger) commercial banks appear to benefit from partnerships with P2P platforms, as evidenced by an increase in non-interest income. Furthermore, the findings suggest that FinTech presence has a disproportionately larger adverse effect on banks in countries with more competitive, profitable, and developed financial systems. Interestingly, however, traditional financial institutions in countries with stronger regulatory frameworks appear to benefit from the expanding influence of FinTech firms.
Report finds strong expansion of global value chains but warns of increased vulnerability
November 16, 2023--Global value chains (GVCs) continued to expand in 2022, as indicated by the growing share of foreign inputs in exports and the increasing participation rates of economies worldwide. This bodes well for spreading the benefits of trade to more firms, workers and developing economies, according to the GVC Development Report 2023 issued on 16 November.
However, the report also flags increasing risks from the dependence on a small number of economies for certain products and highlights the vulnerability of GVCs to rising trade tensions and global crises.
Climate Change is Disrupting Global Trade
November 15, 2023--Panama's drought shows how trade disruptions from climate extremes can reverberate around the world
Around 1,000 ships pass through the Panama Canal each month carrying a total of over 40 million tons of goods-about 5 percent of global maritime trade volumes.
But water levels in this vital link between the Atlantic and Pacific oceans have fallen to critical lows because of the worst drought in the canal’s 143-year history.
Drought restrictions imposed amid insufficient rainfall at the Gatun Lake, which feeds the canal, have reduced throughput by some 15 million tons so far this year. Ships have faced an additional six days in transit. The authorities are exploring strategic options to boost the water supply in the canal.
As the Chart of the Week shows, ports in Panama, Nicaragua, Ecuador, Peru, El Salvador and Jamaica are suffering most from these delays, with 10 percent to 25 percent of their total maritime trade flows affected.
Investors miss out on sugar rush as they flee commodities ETFs
November 13, 2023--WisdomTree's director of macroeconomic research, Aneeka Gupta, acknowledged that investors seemed to have lost out on the rise in the price of sugar and may not buy back in.
Energy ETFs have been a recent bright spot while funds for precious metals like gold have suffered outflows, according to data provided by Invesco.
When it comes to sugar-specific investment vehicles, investors do not appear to have chased performance over the second half of the year, despite prices that rose beyond spring's highs.
Conflict in Middle East Could Bring 'Dual Shock' to Global Commodity Markets
October 30, 2023--October 30, 2023--Impact limited so far but energy-market turmoil could intensify food insecurity
Although the global economy is in a much better position than it was in the 1970s to cope with a major oil-price shock, an escalation of the latest conflict in the Middle East-which comes on top of disruptions caused by the Russian invasion of Ukraine-could push global commodity markets into uncharted waters, according to the World Bank's latest Commodity Markets Outlook.
The report provides a preliminary assessment of the potential near-term implications of the conflict for commodity markets. It finds that the effects should be limited if the conflict doesn’t widen. Under the Bank's baseline forecast, oil prices are expected to average $90 a barrel in the current quarter before declining to an average of $81 a barrel next year as global economic growth slows.
Overall commodity prices are projected to fall 4.1% next year. Prices of agricultural commodities are expected to decline next year as supplies rise. Prices of base metals are also projected to drop 5% in 2024. Commodity prices are expected to stabilize in 2025.
ETFGI reports year-to-date net inflows into the Global ETFs industry of US$596.75 billion are the 2nd highest on record
October 17, 2023--ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs ecosystem, reported today year-to-date net inflows of US$596.75 billion are the 2nd highest on record. The global ETFs industry gathered US$67.70 Bn in net inflows in September, bringing year to date net inflows to US$596.75 Bn.
Assets invested in the global ETFs industry have increased 11.3% year-to-date in 2023, going from US$9.26 trillion at end of 2022 to $10.31 trillion, according to ETFGI's September 2023 global ETFs and ETPs industry landscape insights report, the monthly report which is part of an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted)
Highlights
Net inflows of $67.70 Bn during September.
YTD net inflows of $ 596.75 Bn are the second highest on record, after YTD net inflows of $923.16 Bn in 2021.
52nd month of consecutive net inflows.
Assets of $10.31 Tn invested in the global ETFs industry at the end of September.
Assets have increased 11.3% YTD in 2023, going from $9.26 Tn at end of 2022 to $10.31 Tn.
IMF-Climate Crossroads: FISCAL POLICIES IN A WARMING WORLD
October 10, 2023--For all countries, it is becoming hard to balance public finances. The difficulties originate in ever-growing demand for public spending,
associated with high expectations about what the state can and should do, elevated debts, and high-for-long interest rates and political red lines on
taxes.
But the way the government budget constraint binds varies widely across countries.
In some cases, it is binding with the government having insufficient resources to pay urgent bills and no access to market financing.
These countries are often small and poor.
For example, in many low-income countries interest expenses represent a large and growing fraction of tax revenues. In other cases, while immediate financial pressures are absent, the perpetuation of current policies entails an unsustainable fiscal path. These countries are, in general, large and rich. In addition, there is another important consideration when pondering budgetary policies. In most countries, tighter fiscal policies are needed, not only to reconstitute buffers and contain public finance risks, but also to contribute to central banks' efforts in favor of a timely return to inflation targets.
