Global ETF News Older than One Year
IMF F&D-Gold, Silver, and Monetary Stability
February 19, 2023--An almost-forgotten 19th century episode shows that international cooperation can be essential for a stable global monetary system
The year 1873 marks a turning point in monetary history. In July, the new German Empire Reichstag replaced an array of silver-based currencies with the gold mark.
In September, the Paris mint limited silver coinage, ending the double gold-silver monetary standard France had maintained for decades. And earlier that year, the US Congress legislated the phasing out of the temporary paper currency of the Civil War years, to replace it with a gold dollar once the government resumed specie (coin) payments (which happened in 1879).
With the United Kingdom already on gold, by the end of the 1870s all the world's leading industrial nations used gold currencies. Silver-which, until 1873, had been on an equal footing with gold-became a secondary currency metal used mostly by periphery countries.
Source: imf.org
40% of the Forest 500 have yet to set a single policy on deforestation
February 15, 2023-Global Canopy's 9th annual Forest 500 report and ranking finds that the companies and financial institutions with the most influence on deforestation are taking insufficient action on deforestation, with the finance sector "woefully behind".
Global Canopy's latest Forest 500 report and ranking, which tracks the policies and performance of the 350 most influential companies and 150 financial institutions most exposed to deforestation risk in their supply chains and investments, has been published.
The latest assessments show very slow progress on deforestation action.
None of the companies and financial institutions in the Forest 500 are deforestation-free, and 40% (201 companies and financial institutions) haven't set a single policy on deforestation.
Ending deforestation is essential to achieving urgent global goals on climate, nature and human rights. Deforestation impacts global temperatures, emissions, biodiversity, rainfall, displacement of communities and food security.
Source: globalcanopy.org/
Emerging market and Europe equity ETFs jolt back into life
February 9, 2023--Funds enjoy highest monthly net inflows for a year while investors pull money from US
Emerging market and Europe-focused equity exchange traded funds both enjoyed their highest monthly net inflows for a year in January even as US equity ETFs suffered their first outflow since April 2022.
The flows, recorded in data from BlackRock, reflect a tentative reversal in global stock market leadership. They show Wall Street -long the pre-eminent driver of worldwide equity returns-handing over the baton as fears of a European recession recede and a weaker dollar allows emerging markets their time in the sun.
Source: ft.com
Low-emissions sources are set to cover almost all the growth in global electricity demand in the next three years
February 8, 2023--The world's electricity demand growth slowed only slightly in 2022, despite headwinds from the energy crisis, and is expected to accelerate in the years ahead
Renewables are set to dominate the growth of the world's electricity supply over the next three years as together with nuclear power they meet the vast majority of the increase in global demand through to 2025, making significant rises in the power sector's carbon emissions unlikely, according to a new IEA report.
After slowing slightly last year to 2% amid the turmoil of the global energy crisis and exceptional weather conditions in some regions, the growth in world electricity demand is expected to accelerate to an average of 3% over the next three years, the IEA's Electricity Market Report 2023 finds. Emerging and developing economies in Asia are the driving forces behind this faster pace, which is a step up from average growth of 2.4% during the years before the pandemic.
Source: iea.org
Charting Globalization's Turn to Slowbalization After Global Financial Crisis
February 8, 2023--Trade openness increased after the Second World War, but has slowed following the global financial crisis
History suggests the path to taming inflation is through more international trade-not less
Today's surge in inflation grows out of the interplay of supply chain disruptions with large fiscal deficits.
The pandemic, followed by Russia's invasion of Ukraine, upended supply chains and produced scarcities.
Rich industrial countries responded to the shortages, inequalities, and social stress with large fiscal packages. In the ensuing spiral, increased spending led to more demand, which led to more shortfalls. Another vicious spiral may follow. Rising food and fuel prices could spark discontent, protests, even revolutions and government breakdowns around the world.
Source: imf.org
IMF Working Papers-Restructuring Domestic Sovereign Debt: An Analytical Illustration
February 3, 2023--Summary:
Sovereign domestic debt restructurings have become more common in recent years and touched upon a growing share of total public debt. This paper offers a simple framework for policymakers to think about the decision whether to restructure domestic sovereign debt as part of an effort to reduce overall public indebtedness.
It also highlights a rather wide range of technical, legal, and operational issues a sovereign may face while restructuring domestic debt. As expected, factors such as debt reduction required to achieve sustainability, fiscal savings from a restructuring, and economic costs of a restructuring are key inputs into the decision making regarding a restructuring, but so are factors such as the composition of debt, financial stability costs, and crisis preparedness, all of which are discussed in the paper.
Source: imf.org
IMF Working Paper-How Costly Will Reining in Inflation Be? It Depends on How Rational We Are
February 3, 2023--Summary:
We document that past highly inflationary episodes are often characterized by a steeper inflationslack relationship. We show that model-generated data from a standard small Dynamic Stochastic General Equilibrium (DSGE) model can replicate this empirical finding when estimated with different expectation formation processes.
When inflation becomes de-anchored and expectations drift, we can observe high inflation even with a mildly positive output gap in response to cost-push shocks. The results imply that we should not use an unconditioned (not controlling for expectations change) Phillips curve estimated in normal times to predict the cost of reining in inflation. Our optimal policy exercises prescribe early monetary policy tightening and then easing in the context of positive output gaps and inflation far above the central bank target.
Source: imf.org
IMF-In Defense of Globalization
February 2, 2023--History suggests the path to taming inflation is through more international trade-not less
Today's surge in inflation grows out of the interplay of supply chain disruptions with large fiscal deficits. The pandemic, followed by Russia's invasion of Ukraine, upended supply chains and produced scarcities.
Rich industrial countries responded to the shortages, inequalities, and social stress with large fiscal packages. In the ensuing spiral, increased spending led to more demand, which led to more shortfalls. Another vicious spiral may follow. Rising food and fuel prices could spark discontent, protests, even revolutions and government breakdowns around the world.
Source: imf.org
Latest Global Findex Data Chart 10 Years of Progress in Financial Inclusion
February 2, 2023--STORY HIGHLIGHTS
Financial accounts give people a safe way to make payments, store and save money, and access loans. As a result, financial inclusion facilitates investments in education and job opportunities, and increases resiliency to shocks.
Data from the Global Findex-launched in 2011 as the world's first and only source of data collected from users of financial services on financial account ownership, usage, and financial resilience based on nationally representative surveys of adults-show a 50 percent increase over the past decade in the worldwide share of adults with an account. Key gaps still remain, however, based on gender, income, and education level.
The COVID-19 pandemic catalyzed a rise in financial digitalization, demonstrated by millions of adults using digital payments in lieu of cash-based payments for the first time.
At a recent Policy Research Talk, World Bank Lead Economist Leora Klapper presented key findings from the Global Findex 2021-a nationally representative survey of adults that has taken place roughly every three years since 2011 and quantifies financial account ownership and usage in economies around the world. Initially delayed by the outbreak of the COVID-19 pandemic, the Global Findex 2021 captured data from more than 128,000 adults in 123 countries-bringing the global total of survey participants to more than half a million adults since 2011.
Source: worldbank.org
From marijuana to the metaverse: specialised ETFs underperform
February 2, 2022--New research shows investors should be wary of funds focused on specific themes or one industry
From the legalisation of marijuana to the rise of working from home, if there is a trend or theme in markets, there will be an exchange traded fund for it.
As the cost of issuance of new ETFs is low and the competition between fund issuers intense, financial innovation has flourished. Thousands of new ETFs have been launched over the past three decades. The range of recent specialised ETFs seemingly stretches as far as the imagination of investors.
Source: FT.com