Global ETF News Older than One Year
Global ETF Review 2018: Insights into a multi-trillion dollar industry
February 20, 2019--Quick read-Summary:
We launched the first edition of the quarterly BetaShares Global ETF Review-analysing the key trends & developments in the industry outside Australia.
The global ETF industry ended 2018 at US$4.8 trillion in assets under management (AuM), posting a robust annual growth rate of 20% since 2005.
In the US in 2018, passive funds (including traditional unlisted mutual funds and passive ETFs) attracted net inflows of US$431 billion. In comparison, active mutual funds in the U.S. reported net outflows of US$418 billion, the highest level of annual outflows for this category on record.
In the larger and more mature market of the U.S., ETFs represent about 16% of the size of the broader mutual fund industry. Comparatively, in Australia, penetration is at about 1.5%. While recent growth has been fast, we believe Australian investors are just starting to scratch the surface when it comes to ETF usage.
Fears that the popularity of ETFs has fuelled sharemarket volatility are unfounded and data from 2018 assists in debunking this myth.
Source: FT.com
Once hailed as unhackable, blockchains are now getting hacked
February 19, 2019--More and more security holes are appearing in cryptocurrency and smart contract platforms, and some are fundamental to the way they were built.
arly last month, the security team at Coinbase noticed something strange going on in Ethereum Classic, one of the cryptocurrencies people can buy and sell using Coinbase's popular exchange platform.
Its blockchain,the history of all its transactions, was under attack.
An attacker had somehow gained control of more than half of the network's computing power and was using it to rewrite the transaction history. That made it possible to spend the same cryptocurrency more than once-known as "double spends." The attacker was spotted pulling this off to the tune of $1.1 million.
Source: technologyreview.com
Advisory fees push commissions further into the background
February 19, 2019--Fee-based advice is not perfect, but most clients prefer it over a commission-based option
When there's a financial professional in the picture, investors mostly prefer paying fees based on assets under management.
The latest research from Cerulli Associates found that clients seeking investment advice from financial professionals have largely warmed to the idea of their adviser joining them on the side of the table that benefits when portfolios rise and suffers when portfolio balances fall.
Source: investmentnews.com
Price Tag for Sustainable Infrastructure Spending in Developing Countries is 4.5% of GDP
February 19, 2019--A new World Bank report finds that investments of 4.5 percent of GDP will allow developing countries achieve their infrastructure-related Sustainable Development Goals and stay on track to limit climate change to up to 2°C. Beyond the Gap, also finds infrastructure investment compatible with full decarbonization need not cost more than more polluting alternatives.
Source: World Bank
BIS-Over-the-counter market liquidity and securities lending
February 19, 2019--Summary
Focus
This paper studies how securities lending affects over-the-counter market (OTC) liquidity.
Contribution
The financial crisis of 2007-09 kindled a wider interest in studies of liquidity in OTC financial markets, such as the corporate bond market. Buyers and sellers in these markets trade without centralised exchanges. The greater time and resources needed to complete trades can impede market liquidity-the ability to transact efficiently.
Intermediaries, such as broker-dealers, may emerge to maintain an inventory of securities and to match buyers and sellers. Securities lending markets offer dealers a way to mitigate the consequences of frictions inherent in OTC markets. We identify and quantify the importance of securities lending of corporate bonds to market liquidity in the OTC corporate bond market.
Findings
We combine data on corporate bond market trades with data on corporate bond lending transactions and data on the individual corporate bond holdings of US insurance companies. Our empirical design carefully controls for the many confounding determinants of market liquidity.
view the BIS BIS Working Paper-Over-the-Counter Market Liquidity and Securities Lending
Source: BIS
Cryptoassets: Venture into the Unknown
February 18, 2019--Last year, investors watched as the prices of various cryptoassets collapsed. The industry's most famous digital asset, Bitcoin, lost roughly three quarters of its value, as it slid from more than $16,000 a coin to less than $4,000.
The dramatic declines that swept across the crypto space raised questions about the future of these assets and the blockchain technology that underpins them.
Yet, in looking across the investment landscape, we see an industry that is developing, not faltering. Blockchain technology introduces scarcity to the digital world, which can help innovators better monetize their work and foster innovation. It offers the potential to streamline processes across any number of businesses, such as inter-bank settlement. It also holds the hope for a new, more decentralized version of the internet, where users can better manage their privacy.
Source: Cambridge Associates LLC
BetaShares-Buy the rumour
February 18, 2019--Week in Review
It was another positive week for global stocks, as ongoing encouraging talk about progress in US-China trade talks remained the gift that keeps on giving. Last week it was Trump's announced willingness to extend the March 1 deadline that boosted sentiment.
It's fair to say a positive trade deal now seems increasingly "priced" into the market, and once it's settled it may well become a classic case of "buy the rumour, sell the fact".
Washington's deal to avoid another Government shutdown was also a relief, with Trump finally resorting to the national emergency route-and inevitable court wrangling-to get his Mexican Wall built. Whether or not The Wall is built is of secondary importance for markets, the big relief is that shutdown threats-and potential associated risks to economic growth-no longer seem part of Trump's bargaining tactics.
Source: BetaShares
TradeWeb Trading Activity Starts The New Year Strong
February 18, 2019--Trading activity set a new record in January 2019 following the previous high set in December 2018. Average daily volume (ADV) for Tradeweb Markets of $624.5 billion (bn) across rates, credit, money markets and equities during the month was up 20.7 percent (%) year over year and average daily trades totaled 51,221.
At Tradeweb, Mortgage trading averaged over $164 bn per day, up over 16% compared to January 2018; its best month in over five years. U.S. high-grade and high-yield credit set new platform records of $2.7 bn and $0.4 bn, respectively; U.S. high--grade exceed 11% of TRACE for the first time.
Source: Tradeweb
BlackRock and Vanguard pull in 57% of global fund flows in 2018
February 17, 2019-- Chart of the week: index funds far outpaced active peers in a year defined by volatility
BlackRock and Vanguard together grabbed more than half of global net new inflows into long-term mutual funds in 2018, ratcheting up the pressure on the business models of smaller rivals.
Worldwide, new business flows into long-term mutual funds (excluding money market products) dropped by almost 70 per cent last year, declining to $606bn from the $2tn record set in 2017, according to Morningstar, the data provider.
Source: FT.com
