Global ETF News Older than One Year
MSCI Set to Quadruple Weightings of Chinese A Shares
March 4, 2019--The change will provide U.S. and other investors greater exposure to stocks that trade only in China
MSCI is quadrupling the weighting of domestically traded Chinese stocks in its global indexes starting this May.
In a three-step plan, the share of China A large-cap shares will increase from a 5% inclusion factor currently to a 10% inclusion factor in May, then to 15% in August and 20% in November, at which point the indexes will also add some mid-cap China A shares and Chi-Next stocks, which trade on a Nasdaq-like board at the the Shenzhen Stock Exchange.
Source: thinkadvisor.com
IMF Working Papers-Nonlinearity Between the Shadow Economy and Level of Development
March 1, 2019--Summary:
This paper is the first attempt to directly explore the long-run nonlinear relationship between the shadow economy and level of development. Using a dataset of 158 countries over the period from 1996 to 2015, our results reveal a robust U-shaped relationship between the shadow economy size and GDP per capita.
Our results imply that the shadow economy tends to increase when economic development surpasses a given threshold or at least does not disappear. Our findings suggest that special attention should be given to the country's level of development when designing policies to tackle issues related to the shadow economy.
view the IMF Working Papers-Nonlinearity Between the Shadow Economy and Level of Development
Source: IMF
IMF Working paper-Cash Use Across Countries and the Demand for Central Bank Digital Currency
March 1, 2019--Summary:
The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card-not better. Demand for digital currency will thus be weak in countries where cash use is already very low, due to a preference for cash substitutes (cards, electronic money, mobile phone payments).
Where cash use is very high, demand should be stronger, due to a lack of cash substitutes. As the demand for CBDC is tied to the current level of cash use, we estimate the level and trend in cash use for 11 countries using four different measures. A tentative forecast of cash use is also made. After showing that declining cash use is largely associated with demographic change, we tie the level of cash use to the likely demand for CBDC in different countries. In this process, we suggest that one measure of cash use is more useful than the others. If cash is important for monetary policy, payment instrument competition, or as an alternative payment instrument in the event of operational problems with privately supplied payment methods, the introduction of CBDC may best be introduced before cash substitutes become so ubiquitous that the viability of CBDC could be in doubt.
Source: IMF
ETFGI reports Smart Beta ETFs and ETPs listed globally gather net inflows of US$7.38 billion during January 2019
February 28, 2019--ETFGI, a leading independent research and consultancy firm covering trends in the global ETF/ETP ecosystem, reported today that equity-based Smart Beta ETFs and ETPs listed globally gathered net inflows of US$7.38 billion during January.
Total assets invested in the global Smart Beta ETF and ETP industry increased 10.1%, from US$618 billion at the end of December, to US$680 billion, according to ETFGI's January 2019 ETF and ETP Smart Beta industry landscape insights report, an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
In January 2019, Smart Beta ETFs/ETPs attracted $7.38 Bn in net new assets.
Source: ETFGI
MSCI speeds up boost to China's weighting in emerging markets index
February 28, 2019--MSCI has accelerated an increase in China's weighting in its flagship emerging markets index, an influential benchmark tracked by $1.9tn of funds, reflecting how Beijing has opened up its markets to foreign investors in recent years.
Source: FT.com
A Chinese economist explains what we get wrong about the trade war
February 27, 2019--It's one of the biggest threats to the global economy, and it could finally be near a resolution: the trade war between China and the United States.
President Trump has said that the two economic superpowers are close to a deal to end a lingering dispute that has cast a shadow on the outlook for the entire economy. Between them, the nations account for 40% of global GDP.
Source: World Economic Forum
ETFGI reports Assets invested in Environmental, Social, and Governance (ESG) ETFs and ETPs listed globally reaches a record US$25 Bn at the end of January 2019
February 27, 2019--ETFGI, a leading independent research and consultancy firm covering trends in the global ETF/ETP ecosystem, reported today that Environmental, Social, and Governance (ESG) ETFs and ETPs listed globally gathered net inflows of US$730 million during January.
Total assets invested in ESG ETFs and ETPs increased by 9.97% from US$22.47 billion at the end of December, to a record US$24.71billion, according to ETFGI's January 2019 ETF and ETP ESG industry landscape insights report, an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Total Assets invested in ESG ETFs and ETPs listed globally rose 9.97% in January 2019, to reach record AuM of $25 Bn.
ESG ETFs and ETPs listed globally gathered $730 Mn in net new assets during January.
Source: ETFGI
IMF Working Papers-Sovereigns and Financial Intermediaries Spillovers
February 27, 2019--Summary:
We examine the spillover effects between sovereigns and banks in a model with a heterogeneous banking system. An increase in sovereign's default risk affects financial intermediaries through two channels in this model. First, banks' funding costs might increase, inducing higher interest rates on loans and bonds and a cut back in these assets.
Second, financial regulator's risk-weighted asset framework would assign higher weights to lower quality assets, implying a portfolio rebalancing and more deleveraging. While capital adequacy requirements weaken the impact of shocks emerging from the real economy, they amplify the effect of shocks on banks’ balance sheets.
view the IMF Working Papers-Sovereigns and Financial Intermediaries Spillovers
Source: IMF
OECD Risks rising in corporate debt market
February 25, 2019--Global outstanding debt in the form of corporate bonds issued by non-financial companies has hit record levels, reaching almost USD 13 trillion at the end of 2018. This is double the amount outstanding in real terms before the 2008 financial crisis, according to a new OECD paper.
Corporate Bond Markets in a Time of Unconventional Monetary Policy says that non-financial companies have dramatically increased their borrowing in the form of corporate bonds. Between 2008-2018, global corporate bond issuance averaged USD 1.7 trillion per year, compared to an annual average of USD 864 billion during the years leading up to the crisis.
< href="http://www.oecd.org/newsroom/risks-rising-in-corporate-debt-market.htm" TARGET="_blank">view more
view the OECD Corporate Bond Markets in a Time of Unconventional Monetary Policy paper
Source: OECD
FTSE Russell and Nomura partner to launch first factor-based indexes linked to World Government Bond Index (WGBI)
February 22, 2019--New FTSE Nomura Carry and Roll Down (CaRD) World Government Bond Index Series launches
Meets investor demand for a fixed income "Carry" factor-based index for sovereign debt
FTSE Russell partners with Nomura Securities to develop series
Select Japanese pensions first to adopt series with over USD 1bn allocation into index-tracking funds
FTSE Russell, the global index, analytics and data provider, and Nomura Securities are launching a new index series: the FTSE Nomura Carry and Roll Down (CaRD) World Government Bond Index Series. This index series benchmarks the FTSE World Government Bond Index (WGBI) but is alternatively weighted to maximise the government bond portfolios which have the highest "carry and roll down".
Source: FTSE Russell
