Global ETF News Older than One Year
Does ESG investing really have an influence on companies?
June 2, 2020--Research questions integrated and score-based strategy on the risk of mixed message sent to companies
What motivates equity ESG investment strategies is the ability to influence the behaviour of companies through the portfolio decisions that they lead to. To this end, it is often argued that an investor who is dissatisfied with a company's ESG behaviour, and who wishes to remedy the situation, needs to stay on as its shareholder and engage with it.
Indeed it is believed that if the investor divests from the company, its influence over the company will cease.
Moreover, the act of divesting is often presented as a passive approach that has no bearing on the company's management, a capitulation rather than a form of action.
In a new publication entitled "ESG Engagement and Divestment: Mutually Exclusive or Mutually Reinforcing?" Scientific Beta argues that both divestment and engagement are actions that promote change and illustrates the empirical results of academic studies showing that both approaches can be effective.view more
Source: Scientific Beta
Hedge funds led by women outperformed their male rivals during the coronavirus market meltdown
June 1, 2020--Women-led hedge funds outperformed their male rivals in the first four months of 2020, data from HFR show.
Women-led hedge funds lost 3.5% in 2020 through the end of April, according to the HFR Women's Access index.
In the same time frame, the HFRI 500 Fund Weighted index, which tracks hedge funds led by both men and women, slipped 5.5%.
While there's no clear answer as to why women-led funds outperformed, it could be due to focus on protecting losses amid the coronavirus-induced market rout, according to The Financial Times.
Still, women are underrepresented in hedge funds, data show.
Source: Business Insider
Threat of negative rates hangs over $4.8tn US money fund
May 30, 2020--Thin margins and fee waivers to jeopardise profitability as part of coronavirus disruption.
Source: FT.com
Equity Investors Must Pay More Attention to Climate Change Physical Risk
May 29, 2020--The damage from the 2011 floods in Thailand amounted to around 10 percent of Thailand's GDP, not even considering all the indirect costs through a loss in economic activity in the country and abroad.
By some estimates, the total costs of the 2018 wildfires in California were up to $350 billion, or 1.7 percent of U.S. GDP. Every year, climatic disasters cause human suffering as well as large economic and ecological damage. Over the past decade, direct damages of such disasters are estimated to add up to around US$ 1.3 trillion (or around 0.2% of world GDP) on average, per year.
As scientists warn that global warming will increase the frequency and severity of such extreme weather events, the IMF’s latest Global Financial Stability Report examines the impact of climate change physical risk (loss of life and property as well as disruptions to economic activity) on financial stability, and finds that equity investors might not be pricing these risks adequately.
Source: IMF
OECD-International trade statistics: trends in first quarter 2020 Covid-19 hits G20 international merchandise trade in first quarter of 2020 as signs emerge of even sharper falls in Q2
May 26, 2020--Covid-19 containment measures introduced in many countries in March 2020 hit G20 merchandise trade hard in the first quarter of 2020. Compared with the fourth quarter of 2019, exports fell by 4.3% and imports by 3.9%, and now stand at their lowest levels since the second quarter of 2017.
Early indications for April point to more precipitous falls in the second quarter, with Korean and Japanese exports, for example, falling 21.5% and 10.6%, respectively, compared with March 2020.
The impact on international trade across G20 economies varied widely in the first quarter of 2020 due to differences in the rate of the spread of Covid-19, in containment strategies, and in the extent of their exposure to other countries affected by the lockdowns.
France, India, Italy and the United Kingdom, which all introduced nationwide lockdowns in March, saw their exports fall by 7.1%, 9.2%, 4.9% and 7.8% respectively while imports fell by 7.0%, 2.3%, 5.6% and 6.5% respectively. German trade fared slightly better than in other G20 European Union economies, with exports and imports falling by only 3.5% and 2.4% respectively.
Source: OECD
GDP Growth-First quarter of 2020, OECD-OECD GDP falls by 1.8% in the first quarter of 2020
May 26, 2020--Following the introduction of COVID-19 containment measures across the world, real gross domestic product (GDP) in the OECD area fell by 1.8% in the first quarter of 2020, the largest drop since the 2.3% contraction in the first quarter of 2009 at the height of the financial crisis, according to provisional estimates.
Among the Major Seven, GDP dropped significantly in France and Italy, where lockdown measures were most stringent and implemented earliest (by minus 5.8% and minus 4.7% respectively, compared with minus 0.1% and minus 0.3%, in the previous quarter).
GDP also fell sharply in Canada, Germany and the United Kingdom (by minus 2.6%, minus 2.2% and minus 2.0% respectively, compared with 0.1%, minus 0.1% and 0.0% in the previous quarter).
In Japan, where containment measures have been less stringent, GDP contracted by minus 0.9% in the first quarter of 2020, compared with minus 1.9% in the previous quarter.
Source: OECD
Dampening the Impact of Global Financial Shocks on Emerging Market Economies
May 19, 2020--The COVID-19 pandemic is impacting emerging markets through an unprecedented combination of domestic and external shocks.
Among the latter, the pandemic has led to a sharp increase in global risk aversion and an abrupt retrenchment in foreign capital flows.
Based on historical experience, these types of global financial shocks can significantly affect macroeconomic conditions in emerging markets, even if the exchange rate is flexible.
Our research in chapter 3 of the latest World Economic Outlook shows that emerging markets can enhance resilience to global financial shocks using macroprudential regulation.
Source: IMF
IEA-Oil Market Report-May 2020
May 14, 2020--Highlights
Better than expected mobility in OECD countries and the gradual easing of lockdown measures led to an upward adjustment of 3.2 mb/d to our global 2Q20 demand number; but it is still sharply down on last year by 19.9 mb/d.
Although 2H20 will be slightly weaker than previously forecast, our outlook for 2020 as a whole shows a demand fall of 8.6 mb/d, 0.7 mb/d more than in our previous Report. A resurgence of Covid-19 is a major risk factor for demand. Global oil supply is set to fall by a spectacular 12 mb/d in May to a nine-year low of 88 mb/d, as the OPEC+ agreement takes effect and production declines elsewhere.
Source: IEA
The world's largest asset managers pay lip service to preventing human rights abuse
May 14, 2020--47% of asset managers, with over $45 trillion in assets in total, do not prohibit investments in controversial weapons banned by international arms treaties.
70% of the world's largest asset managers do not have a policy to exclude or engage with companies in line with international human rights frameworks.
US asset managers lag behind global peers on human rights approaches, with leaders all based in Europe.
The world's six largest asset managers are among the poorest performers on human rights, including Fidelity Investments (FMR), J.P. Morgan Asset Management, Vanguard, BlackRock State Street Global Advisors, and Capital Group.
Source: shareaction.org
COVID-19: Potential impact on the global economy and gold performance
May 14, 2020--The COVID-19 pandemic and ensuing economic lockdowns have slashed global growth forecasts for 2020.
With varied expectations around the speed of the economic recovery, we analyse the potential performance of gold across four hypothetical scenarios provided by Oxford Economics:1
1) swift recovery
2) US corporate crisis
3) emerging markets downturn
4) deep recession.
Our analysis shows that higher risk and uncertainty combined with lower opportunity cost will likely be supportive of gold investment demand in 2020. This could offset the negative effect of lower consumer demand on gold performance as economic activity contracts.
Source: World Gold Council
