Global ETF News Older than One Year
OTC derivatives statistics at end-June 2019
November 8, 2019--Notional amounts of OTC derivatives rose to $640 trillion at end-June 2019. This is up from $544 trillion at end-2018 and the highest level since 2014. It marks a continuation of the trend increase evident since end-2016.
The gross market value of OTC derivatives, summing positive and negative values, also rose, from $9.7 trillion to $12.1 trillion, led by increases in euro interest rate derivative contracts.
The lastest semiannual data benefit from the addition of more comprehensive information for smaller dealers collected as part of the BIS Triennial Survey.1 Dealers in emerging market economies (EMEs) accounted for 9% of the outstanding notional amounts of foreign exchange and commodity derivatives globally at end-June 2019, up from 7% at end-June 2016.
Source: BIS
Pensions Venture Into Risky Corners of the Market in Hunt for Returns
November 7, 2019--Retirement programs are increasing bets on private debt, junk bonds and real estate as negative yields pare asset growth
Some pension-fund managers are venturing further into unusual investment territory as this year's plunge in bond yields makes it harder to find decent long-term returns.
Funds are dabbling in riskier asset classes, including private markets, real-estate projects, infrastructure financing and direct lending. Some are making riskier fixed-income bets, buying volatile assets such as 100-year Argentine government bonds. Others are going farther afield, investing in greenhouses and waste management.
Source: Wall Street Journal
Growth fears force exchange traded funds into gold
November 6, 2019--SPDR Gold Trust, the world's biggest gold ETF, sees inflows of $6.5bn this year.
Source: FT.com
Statement on IOSCO study of emerging global stablecoin proposals
November 4, 2019--At its meeting on 30th October in Madrid, the Board of the International Organization of Securities Commissions (IOSCO) met, amongst other things, to consider the risks and benefits arising from 'stablecoin' initiatives with a potential global reach ('global stablecoins'), and how securities market regulation may apply to such initiatives.
This year, IOSCO has examined a number of these initiatives. The IOSCO Board acknowledges that stablecoins can potentially offer benefits to market participants, consumers and investors. However, it is also aware of potential risks in a number of areas, including consumer protection, market integrity, transparency, conflicts of interest and financial crime, as well as potential systemic risks.
To support its discussions, the IOSCO FinTech Network produced an assessment for the Board of how IOSCO Principles and Standards could apply to global stablecoin initiatives. The detailed assessment concluded that a case-by-case approach is needed to establish which IOSCO Principles and Standards, and national regulatory regimes, would apply.
Source: IOSCO
Mystery is part and particle of smart beta
November 4, 2019--Mainstream theory says quantum particles can exist in many places and states at the same time, yet when they are observed the spell is broken...
Source: FT.com
IMF Working Paper-Swing Pricing and Fragility in Open-end Mutual Funds
November 4, 2019--Summary:
How to prevent runs on open-end mutual funds? In recent years, markets have observed an innovation that changed the way open-end funds are priced. Alternative pricing rules (known as swing pricing) adjust funds' net asset values to pass on funds' trading costs to transacting shareholders.
Using unique data on investor transactions in U.K. corporate bond funds, we show that swing pricing eliminates the first-mover advantage arising from the traditional pricing rule and significantly reduces redemptions during stress periods. The positive impact of alternative pricing rules on fund flows reverses in calm periods when costs associated with higher tracking error dominate the pricing effect.
view the IMF Working Paper-Swing Pricing and Fragility in Open-end Mutual Funds
Source: IMF
Growth of private capital funds accelerates as ETFs slow
November 3, 2019--Private assets sparkle with prospect of higher returns
Critics say that exchange traded funds are devouring markets.
But in reality, the hottest trend in the global asset management industry is the growth of private capital, which is swelling at nearly twice the rate of ETFs.
Source: FT.com
IMF Working Paper-Machine Learning and Causality: The Impact of Financial Crises on Growth
November 1, 2019--Summary:
Machine learning tools are well known for their success in prediction. But prediction is not causation, and causal discovery is at the core of most questions concerning economic policy. Recently, however, the literature has focused more on issues of causality.
This paper gently introduces some leading work in this area, using a concrete example-assessing the impact of a hypothetical banking crisis on a country's growth. By enabling consideration of a rich set of potential nonlinearities, and by allowing individually-tailored policy assessments, machine learning can provide an invaluable complement to the skill set of economists within the Fund and beyond.
view the IMF Working Paper-Machine Learning and Causality: The Impact of Financial Crises on Growth
Source: IMF
Expanding Offshore Wind to Emerging Markets
October 31, 2019--STORY HIGHLIGHTS
As prices continue to fall, offshore wind power is increasingly gaining traction in emerging markets, beyond its current proliferation in Europe and China.
By some estimates, offshore wind could add anywhere between seven and 11 gigawatts (GW) per year from 2019 to 2024, with substantial potential in developing countries.
This new report estimates that the technical potential for offshore wind in Brazil, India, Morocco, the Philippines, South Africa, Sri Lanka, Turkey and Vietnam at 3.1 terawatts-which is about three times the installed electricity generating capacity of all EU countries. This includes 1,016 GW of fixed and 2,066 GW of floating potential.
view the World Bank report-Going Global: Expanding Offshore Wind To Emerging Markets
Source: World Bank
Commodity Prices Revised Down as Global Growth Weakens and Supplies Remain Ample
October 29, 2019--Energy and metal prices seen falling in 2019, 2020 on slowing demand
Energy and metal commodity prices are expected to continue to fall in 2020 following sharp declines in 2019 on a weaker outlook for global growth and consequent softer demand, the World Bank said in its October Commodity Markets Outlook.
"Slowing demand for commodities presents a challenge for exporters and an opportunity for importers," said Ceyla Pazarbasioglu, World Bank Group Vice President for Equitable Growth, Finance & Institutions. "As both of them switch from using one commodity to another due to price fluctuation and technological advance, it will be important that these resources be produced and consumed in an environmentally sustainable way."
Crude oil prices are projected to average US$60 per barrel in 2019 and weaken to US$58 per barrel in 2020. These forecasts are US$6 per barrel and US$7 per barrel lower than anticipated in the April Commodity Markets Outlook. P>view more
view the World Bank October 2019 Commodity Markets Outlook
Source: World Bank
