Global ETF News Older than One Year
First Bridge Data'ETF 20/20': Exchange Traded Funds-Reviewing 2018
January 28, 2019--Key Highlights
This month's report briefly summarizes Exchange Traded Fund (ETF) trends globally in 2018. It uses data from the First Bridge ETF database that includes all global ETPs.
Key industry developments in 2018 included the US SEC's proposed rule 6c-11 to simplify ETF approvals; the issuance of a regulatory summary statement by the Central Bank of Ireland; the creation of the Communications Services GICS sector and the addition of Chinese 'A' Shares to MSCI's emerging market indices.
Global ETF assets were $4.89T as of December 31, 2018, flat from the previous year-end with net inflows offsetting market declines.
The market share for the top index providers was virtually unchanged from year-end 2017. Among the fund sponsors, leaders Blackrock (36%) and Vanguard (19%) did not significantly change their market share in 2018. State Street's global market share declined by one percent to 13%, with Invesco gaining 1% after its acquisition of Guggenheim's ETF business in the US to reach 4% of global ETF assets.
Active ETFs increased their share of global ETF assets from 1.6% to 2.2% in 2018. Smart beta ETFs also grew share from 9.7% to 9.9%.
There were 1728 new listings globally in 2018, including cross-listings.
In a year that saw equity volatility spike up, VIX futures was the best performing ETF category in the US in 2018, along with cocoa futures and Qatar equities. Rare earth metals, oil services and Turkish equities were the weakest ETF categories.
Source: First Bridge Data
Investors Remain Enamored by Passively Managed Funds in 2018
January 25, 2019--Passively managed funds (including conventional funds and ETFs) attracted $445.1 billion in 2018, while their actively managed counterparts handed back some $282.9 billion (ex-money market funds) for the same time period.
Except for the commodities funds macro-group, investors appeared to prefer passively managed funds for all of Lipper's broad-based macro-groups, a change from 2017 when investors were as equally enamored by actively managed taxable fixed income funds and municipal debt funds as they were of their passively managed brethren.
Source: Refinitiv
IMF Working Paper-Commodity Terms of Trade: A New Database
January 24, 2019--This paper presents a comprehensive database of country-specific commodity price indices for 182 economies covering the period 1962-2018. For each country, the change in the international price of up to 45 individual commodities is weighted using commodity-level trade data.
The database includes a commodity terms-of-trade index which proxies the windfall gains and losses of income associated with changes in world prices as well as additional country-specific series, including commodity export and import price indices. We provide indices that are constructed using, alternatively, fixed weights (based on average trade flows over several decades) and time-varying weights (which can account for time variation in the mix of commodities traded and the overall importance of commodities in economic activity). The paper also discusses the dynamics of commodity terms of trade across country groups and their influence on key macroeconomic aggregates.
view the IMF Working Paper-Commodity Terms of Trade: A New Database
Source: IMF
Committee on the Global Financial System report outlines ways to boost domestic capital markets
January 23, 2019--Policymakers and stakeholders can do more to promote the development of robust and efficient capital markets, according to a new report by the Committee on the Global Financial System (CGFS).
Establishing viable capital markets finds that large differences persist in the size of capital markets across advanced and emerging economies. Emerging-economy markets have been catching up with their more advanced peers, but the gap has not yet been closed.
Source: BIS
Research reveals poor understanding of blockchain amongst senior business executives
January 22, 2019--Despite this, institutional investors expect companies to dramatically increase their investment in this technology over the next few years
Banking/ finance is widely seen as the sector that will be transformed the most by blockchain
39% of investors believe the impact of blockchain on banking could be as big as that of the internet on the media
New research amongst institutional investors from the Global Blockchain Business Council (GBBC)-the leading association for the blockchain ecosystem-reveals 63% believe senior executives at large established businesses have a poor understanding of blockchain. Only 7% described their understanding as 'good', with the remainder describing it as 'average'.
Source: coingeek.com
AI to outperform human credit decisions by 2024-survey
January 22, 2019--Artificial intelligence (AI) will produce more accurate, reliable and transparent credit decisions than human-based systems within five years, according to capital markets professionals surveyed by Intertrust.
Intertrust, a global leader in providing expert administrative services to clients operating and investing in the international business environment, surveyed over 500 capital markets executives to identify the impact that disruptive technology is having on jobs and skills.
Of these, one in six (14%) believe that AI has already surpassed human-based systems.
Source: finextra.com
The World Federation of Exchanges publishes second report on factors that drive international investor participation in emerging markets
January 21, 2019--The World Federation of Exchanges ("WFE"), the global industry group for exchanges and CCPs, has today published a report-from the investor viewpoint-that seeks to understand what encourages or discourages international investor participation in emerging markets.
The purpose of today's research report, written with the support of the European Bank for Reconstruction and Development (EBRD), is to provide exchange operators, securities regulators and policy-makers with greater insight into the factors that drive investment decisions, as reported by investors themselves.
view the 'Attracting international investors to emerging markets' report
Source: World Federation of Exchanges
BlackRock and Vanguard assets plummet most in a decade
January 21, 2019--Industry leaders see total of $700bn wiped from AUM in fourth quarter
Market volatility sucked hundreds of billions of dollars from the world's largest fund managers last month, with the two industry leaders reporting significant annual declines in assets for the time since the financial crisis.
Source: FT.com
IMF-World Economic Outlook Update, January 2019-A Weakening Global Expansion
January 21, 2019--The global expansion has weakened. Global growth for 2018 is estimated at 3.7 percent, as in the October 2018 World Economic Outlook (WEO) forecast, despite weaker performance in some economies, notably Europe and Asia. The global economy is projected to grow at 3.5 percent in 2019 and 3.6 percent in 2020, 0.2 and 0.1 percentage point below last October's projections.
The global growth forecast for 2019 and 2020 had already been revised downward in the last WEO, partly because of the negative effects of tariff increases enacted in the United States and China earlier that year. The further downward revision since October in part reflects carry over from softer momentum in the second half of 2018-including in Germany following the introduction of new automobile fuel emission standards and in Italy where concerns about sovereign and financial risks have weighed on domestic demand—but also weakening financial market sentiment as well as a contraction in Turkey now projected to be deeper than anticipated.
Source: IMF
Beyond the doomsday economics of "proof-of-work" in cryptocurrencies
January 21, 2019--Summary
Focus
The paper focuses on how Bitcoin and related cryptocurrencies verify that payments are final, ie irreversible once written into the blockchain. It points to the high costs of achieving such finality via "proof-of-work". It then weighs the outlook for cryptocurrencies based on this kind of algorithm, and looks at possible future avenues for progress.
Contribution
The paper shows that two economic limitations affect the outlook of cryptocurrencies modelled on proof-of-work. The first lies in the extreme costs of ensuring payment finality in a reasonable space of time. The second is that these systems will not be able to generate transaction fees that are adequate to guarantee payment security in future.
view the BIS Working Papers-Beyond the doomsday economics of "proof-of-work" in cryptocurrencies
Source: BIS
