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Exchange traded fund boom increases operational challenges for asset servicers
June 6, 2018---Latest Temenos Multifonds Every Fund Survey finds:
78% of the asset management industry believe ETFs will sustain current growth rates
62% predict increasing convergence between ETFs and mutual funds
Operational systems seen as the top challenge and risk
1 in 4 feel asset servicers are not keeping pace with ETF growth and complexity
Temenos (SIX: TEMN), the banking software company, today announces the launch of its 2018 Every Fund Survey: ETF challenges and opportunities. With ETFs breaking through the US$5 trillion mark at the beginning of this year, the increasing complexity of products is ratcheting up the technical and operational pressures on asset servicers, such as fund administrators, according to the findings of the latest Temenos Multifonds Every Fund Survey.
view the ETF challenges and opportunities -The Temenos Multifonds Every Fund Survey 2018-Part 1
BetaShares Global Market Outlook: Recovery continues
June 6, 2018--Month in Review-easing interest rate risk supports stocks
Global equities continued their rebound in May, after good gains in April, as interest rate and geopolitical risks eased somewhat, while the tail end of the US corporate earnings remained strong.
The MSCI All-Country Net-Return Index returned 0.8% in local-currency terms, after a gain of 1.8% in May. Forward earnings also rose 1.4%, implying the price-to-forward earnings ratio eased slightly from 14.9 to 14.8 – down from a recent high of 16.4 at end-January. On a month-end basis, the MSCI Index is now down only 3.2% from its January peak.
19 Global foreign direct investment flows fell sharply in 2017
June 6, 2018--Negative trend is sign of slowdown in international production and global value chains, World Investment Report 2018 reveals.
Global foreign direct investment (FDI) flows fell by 23% in 2017, to $1.43 trillion from $1.87 trillion in 2016, according to UNCTAD’s World Investment Report 2018. The decline is in stark contrast to other macroeconomic variables, which saw substantial improvement in 2017.
"Downward pressure on FDI and the slowdown in global value chains are a major concern for policymakers worldwide, and especially in developing countries," UNCTAD Secretary-General Mukhisa Kituyi said.
World Gold Council-Global gold-backed ETF inflows driven by Europe and Asia
June 6, 2018--Global gold-backed ETF holdings added 15 tonnes(t) to 2,484t in May. Europe and Asia drove inflows as European funds have responded strongly in the past two months. North American fund flows reversed their early 2018 trend as they lost 2.3% of assets, likely a result of the volatile prices in the gold market which left gold lower by 60bps (in dollar terms) on the month.
Volatility and weakness in the gold market were largely driven by a stronger dollar (DXY +2.3% on the month). However, USD-hedged gold was higher by 1.4% on the month. This highlights our view that having some allocation to USD-hedged gold helps risk-adjusted returns by lowering price volatility in periods when currency prices fluctuate.
Global Economy to Expand by 3.1 percent in 2018, Slower Growth Seen Ahead
June 5, 2018--Emerging, Developing Economies to Accelerate as Commodity Exporters Recover
Despite recent softening, global economic growth will remain robust at 3.1 percent in 2018 before slowing gradually over the next two years, as advanced-economy growth decelerates and the recovery in major commodity-exporting emerging market and developing economies levels off, the World Bank said on Tuesday.
"If it can be sustained, the robust economic growth that we have seen this year could help lift millions out of poverty, particularly in the fast-growing economies of South Asia," World Bank Group President Jim Yong Kim said. "But growth alone won't be enough to address pockets of extreme poverty in other parts of the world. Policymakers need to focus on ways to support growth over the longer run—by boosting productivity and labor force participation-in order to accelerate progress toward ending poverty and boosting shared prosperity."
view the world Bank June 2018 Global
Economic Prospects The Turning of the Tide?
iShares-Four Big Trends Driving ETF Growth-Global ETF assets could reach $12 trillion over five years
June 5, 2018--Exchange traded funds (ETFs) are the most enduring investing trend in a generation. This century began with fewer than $100 billion in ETF assets and now counts $4.7 trillion across an ever-expanding number of products.1
Expect growth to accelerate. As detailed in the full report, sweeping developments within the investment management industry are putting ETFs on course to potentially gather more assets over the next five years than in the previous 25 years combined.2
Global ETF assets are poised to more than double to $12 trillion by the end of 2023 and possibly reach $25 trillion by the end of 2027.3
Four trends are likely to fuel future ETF growth, especially in the U.S. and Europe:
ETF investors are active investors. ETFs are increasingly used in portfolios to seek outcomes that differ from the broad market. Investors are likely to step up their use of ETFs as building blocks in asset allocation and as vehicles to deliver factor-based investment strategies that seek to emphasize persistent drivers of return.
ETFGI reports assets invested in active ETFs and ETPs listed globally reach record high of 86 billion US dollars at the end of April 2018
June 5, 2018--ETFGI, a leading independent research and consultancy firm on trends in the global ETF/ETP ecosystem, reported today that assets invested in active ETFs and ETPs listed globally reached a record high of US$86.09 Bn at the end of April 2018; an increase in assets of US$3.11 Bn from the previous record of US$82.97 Bn set at the end of March 2018. (All dollar values in USD unless otherwise noted.)
Highlights
Assets invested in actively-managed ETFs/ETPs listed globally increased by $3.11 Bn during April to reach a new record high of $86.09 Bn
In April 2018, actively-managed ETFs/ETPs listed globally saw net inflows of $2.75 Bn
Active fixed income ETFs performed well this month, with assets invested in the PIMCO Enhanced Short Maturity Strategy Fund (MINT US) reaching a new record high of $8.99 Bn
ETFGI reports assets invested in Currency Hedged ETFs and ETPs listed globally decreased by 1.1% year to date through end of April 2018
June 5, 2018--According to ETFGI's April 2018 Currency Hedged ETF and ETP industry insights report, a monthly report included in an annual paid-for research subscription service, assets invested in currency hedged ETFs/ETPs reached US$143.94 Bn at the end of April 2018, decreasing by 1.1% from US$146.14 Bn in December 2017. (All dollar values in USD unless otherwise noted.)
Highlights
Year-to-date, assets invested in currency hedged ETFs/ETPs decreased by $2.20 Bn
In April 2018, assets invested in currency hedged ETFs/ETPs saw net outflows of $371 Mn
Paper-The Economic Limits of Bitcoin and the Blockchain
June 5, 2018--Abstract
The amount of computational power devoted to anonymous, decentralized blockchains such as Bitcoin's must simultaneously satisfy two conditions in equilibrium: (1) a zero-profit
condition among miners, who engage in a rent-seeking competition for the prize associated with adding the next block to the chain; and (2) an incentive compatibility condition on the
system's vulnerability to a "majority attack", namely that the computational costs of such an attack must exceed the benefits.
Together, these two equations imply that (3) the recurring,
"flow", payments to miners for running the blockchain must be large relative to the one-off,
"stock", benefits of attacking it. This is very expensive! The constraint is softer (i.e., stock
versus stock) if both (i) the mining technology used to run the blockchain is both scarce and
non-repurposable, and (ii) any majority attack is a "sabotage" in that it causes a collapse in
the economic value of the blockchain; however, reliance on non-repurposable technology for
security and vulnerability to sabotage each raise their own concerns, and point to specific
collapse scenarios. In particular, the model suggests that Bitcoin would be majority attacked
if it became sufficiently economically important-e.g., if it became a "store of value" akin to
gold-which suggests that there are intrinsic economic limits to how economically important
it can become in the first place.
ETF Securities Weekly Flows Analysis-Gold's safe haven status reignited by fears of 'Quitaly' and trade tariffs
June 4, 2018--Gold ETPs took the lion's share of inflows as Italy's political chaos and trade tariffs took centre stage
Diversified basket ETPs draw in US$46mn of inflows as investors appear to rotate back into commodities
Energy sector ETP flows bifurcate-energy baskets attract inflows while crude oil ETPs suffer outflows
Gold ETPs took the lion's share of inflows, garnering inflows worth US$122.7mn, marking its highest level in 33 weeks. A turbulent week in Italian politics coupled with the intensification of US trade tariffs supported a reversal in trend of the priors two weeks of outflows among gold ETPs. Fears of a new round of elections in Italy sparked by the rejection of the candidate for the economic and finance minister by President Sergio Mattarella widened the gap between yields on the ten year Italian and German government bonds to over 250
Basis Points (Bps), its highest level since October 2013.