Global ETF News Older than One Year
Solactive makes strategic investment in European governance, sustainability, and proxy voting firm Minerva Analytics
May 27, 2019--Solactive announces the completion of a strategic investment in Minerva to accelerate the growth of the electronic voting, stewardship, and ESG research services firm.
Following the deal's completion, Minerva will build-out its research and client service capability through Solactive's offices in Frankfurt, Hong Kong, and Toronto, while leveraging Solactive’s technological capabilities in the fields of natural language processing to broaden its product suite. Minerva will now be able to offer clients global coverage, 24 hours a day. Solactive will seek to leverage Minerva data in the continued development of its offerings.
Source: Solactive
Goldman Sachs to speed up push into US wealth management
May 26, 2019--Acquisition of United Capital part of effort to take on Schwab and Morgan Stanley in $28tn market.
Source: FT.com
Hedge Funds Making Progress, but Slow to Adopt ESG
May 23, 2019--ESG may be the global rage among institutional investors, but hedge fund firms have been the slowest among alternative asset managers to integrate the principles into long/short investment strategies.
The dearth of ESG-compliant hedge funds is not the result of investor disinterest. Rather, investment consultants said asset owner demand for ESG integration across all strategies is at its highest level ever.
Source: pionline.com
GDP Growth-First quarter of 2019, OECD-OECD GDP growth jumps to 0.6% in first quarter of 2019
May 22, 2019--Growth of real gross domestic product (GDP) in the OECD area picked up strongly to 0.6% in the first quarter of 2019, double the 0.3% rate of the previous quarter, according to provisional estimates.
Among the Major Seven economies, GDP growth accelerated markedly in Germany (to 0.4% after 0.0% in the previous quarter), Italy (0.2%, from minus 0.1%), the United Kingdom (0.5%, from 0.2%) and the United States (0.8%, from 0.5%).
It picked up marginally in Japan (0.5%, from 0.4%) and was stable in France (at 0.3%, for the third consecutive quarter).
GDP growth also picked up in the European Union and the euro area (to 0.5% and 0.4%, respectively, compared with 0.3% and 0.2% in the previous quarter).
Year-on-year GDP growth for the OECD area increased marginally to 1.9% compared with 1.8% in the previous quarter. Among the Major Seven economies, the United States recorded the highest annual growth (3.2%), while Italy recorded the lowest annual growth (0.1%).
Source: OECD
ETF Worldwide Snapshot-May 2019
May 22, 2019--In our latest monthly report:
On May 20, 2019 the US SEC formally approved the application from Precidian to launch non-transparent active ETFs in the US. The SEC had earlier issued a notice that it intended to approve it.
The Japan Exchange Group (JPX) and Shanghai Stock Exchange (SSE) agreed to establish Japan-China ETF connectivity, with a goal of increasing cross-border investments.
Gasoline futures, solar equities and recent IPOs were among the best performing ETF categories this year to date through May 17, 2019.
Global ETF assets increased by 2.9% in April 2019 to $5.66T.
On May 20, 2019 the US SEC formally approved the application from Precidian to launch non-transparent active ETFs in the US. The SEC had earlier issued a notice on April 8, 2019 that it intended to approve the application.
On April 22, 2019, the Japan Exchange Group (JPX) and Shanghai Stock Exchange (SSE) agreed to establish Japan-China ETF connectivity, with a goal of increasing cross-border investments. The arrangement allows the listing of feeder ETF of ETFs investing in Japanese or Chinese assets.
There were 31 new listings in the US and 117 new ETF listings (including crosslistings) outside the US in April 2019.
Gasoline futures, solar equities and recent IPOs were among the best performing ETF categories this year to date through May 17, 2019. VIX, shipping and coffee futures were among the worst performing categories.
Source: First Bridge Data
Shadow Banking Is a New Culprit in Systemic Risk: Fitch
May 21, 2019--Bank exposure channels, insurance companies and pension funds may be at risk, Fitch said.
Specifically, Fitch pointed to the continued rise of shadow banking as a potential culprit in new systemic risk.
Shadow banking is credit lending and the exchange of liquidity that occurs outside of mainstay financial institutions such as banks and insurance companies
Source: Think Advisor
Investec closes robo-advice
May 20, 2019--Investec's international robo-advice offering, Click & Invest, has been shuttered just two years after it was launched.
Citing low appetite for the service, Investec said "the market itself is growing at a much slower rate than expected."
Investec focusing on improved capital allocation and cost management, it said.
"WWe fully appreciate that this announcement will be of real sadness to both clients and staff of Investec Click & Invest," Investec said.
Source: financialstandard.com.au
Aberdeen Standard Investments Precious Metals Outlook: May 2019 Investors Shy Away From Precious Metals Despite Growing Market Risks
May 20, 2019--Despite continued low real interest rates and unresolved geopolitical tensions investor interest in precious metals remains lackluster in recent months.
Given that the investor complacency appears to be settling in again and that global growth continues to slow, the upside risks to both gold and silver currently appear larger than the downside risks.
Platinum remains at a historic discount to palladium even with the strong return posted in April and still has further room to run. Palladium meanwhile is still digesting the recent sell off likely sparked by profit taking as a loosening physical market, but still remains in a structural supply deficit and may see a recovery back to the $1400/ounce level.
Source: Aberdeen Standard Investments
IMF Working Paper-Pledged Collateral Market's Role in Transmission to Short-Term Market Rates
May 17, 2019--Summary:
In global financial centers, short-term market rates are effectively determined in the pledged collateral market, where banks and other financial institutions exchange collateral (such as bonds and equities) for money.
Furthermore, the use of long-dated securities as collateral for short tenors-or example, in securities-lending and repo markets, and prime brokerage funding—impacts the risk premia (or moneyness) along the yield curve.
In this paper, we deploy a methodology to show that transactions using long dated collateral also affect short-term market rates. Our results suggest that the unwind of central bank balance sheets will likely strengthen the monetary policy transmission, as dealer balance-sheet space is now relatively less constrained, with a rebound in collateral reuse.
Source: IMF
IMF Working Paper-FinTech in Financial Inclusion: Machine Learning Applications in Assessing Credit Risk
May 17, 2019--May 17, 2019--Summary:
Recent advances in digital technology and big data have allowed FinTech (financial technology) lending to emerge as a potentially promising solution to reduce the cost of credit and increase financial inclusion. However, machine learning (ML) methods that lie at the heart of FinTech credit have remained largely a black box for the nontechnical audience.
This paper contributes to the literature by discussing potential strengths and weaknesses of ML-based credit assessment through (1) presenting core ideas and the most common techniques in ML for the nontechnical audience; and (2) discussing the fundamental challenges in credit risk analysis. FinTech credit has the potential to enhance financial inclusion and outperform traditional credit scoring by (1) leveraging nontraditional data sources to improve the assessment of the borrower's track record; (2) appraising collateral value; (3) forecasting income prospects; and (4) predicting changes in general conditions. However, because of the central role of data in ML-based analysis, data relevance should be ensured, especially in situations when a deep structural change occurs, when borrowers could counterfeit certain indicators, and when agency problems arising from information asymmetry could not be resolved. To avoid digital financial exclusion and redlining, variables that trigger discrimination should not be used to assess credit rating.
Source: IMF