STOXX Announces Results Of Annual Emerging And Developed Markets Classification Review
April 20, 2018-STOXX Ltd., the operator of Deutsche Boerse Group's index business, and a global provider of innovative and tradable index concepts, today announced the results of the annual Emerging and Developed Markets Country Classification review.
As of September 24, out of the 65 countries in the STOXX index universe, 25 are classified as developed markets, and 21 are classified as emerging markets. A full list of countries including their classification can be found under the dedicated country classification section of the STOXX website: https://www.stoxx.com/country-classification.
Source: STOXX
Environmental, Social and Governance Factors Can Be Material Risks for Fixed Income Investors, Finds World Bank Group and GPIF Report
April 19, 2018--Incorporating environmental, social and governance (ESG) factors into fixed income investment strategies can strengthen risk management and contribute to more stable financial returns, finds a new report by the World Bank Group and Japan's Government Pension Investment Fund (GPIF).
Launched at the World Bank Group Spring Meetings, the report also finds that some of the leading investors are going beyond considering ESG factors as part of fixed income risk analysis. Increasingly, investors are combining ESG and impact considerations, for instance by measuring the impact of their fixed income and other portfolios on targeted ESG outcomes or more broadly against the Sustainable Development Goals (SDGs).
Source: World Bank
First Bridge Data-ETF Global Snapshot-April 2018
April 19, 2018--Monthly Global ETF Snapshot:
In our latest monthly report:
Invesco completed the acquisition of Guggenheim's ETF business in the US, and lowered the expense ratios of several ETFs.
Barclays delisted 50 ETNs in April. 15 of them were replaced by a new series of ETNs.
There were 15 new ETF listings in the US in March 2018.
There were 208 new ETF listings outside the US in March 2018 including 68 new
leveraged & inverse listings by SocGen.
In the US large cap equity space, low volatility outperformed other popular 'smart beta' strategies in the trailing 1 month through April 16, 2018.
Source: First Bridge Data
IMF-Global Financial Stability Report April 2018: A Bumpy Road Ahead
Apri1 18, 2018--The April 2018 Global Financial Stability Report (GFSR) finds that shor-term risks to financial stability have increased somewhat since the previous GFSR. Medium-term risks are still elevated as financial vulnerabilities, which have built up during the years of accommodative policies, could mean a bumpy road ahead and put growth at risk.
Higher inflation may lead central banks to respond more aggressively than currently expected, which could lead to a sharp tightening of financial conditions.
Valuations of risky assets are still stretched, and liquidity mismatches, leverage, and other factors could amplify asset price moves and their impact on the financial system. Emerging markets have generally improving fundamentals, but could be vulnerable to sudden tightening of global financial conditions. Banks have strengthened their balance sheets since the crisis, but parts of the system face a structural US dollar liquidity mismatch that could be a vulnerability. Crypto assets have features that may improve market efficiency, but they could also pose risks if used with leverage or without appropriate safeguards.
Source: IMF
IMF Fiscal Monitor: Capitalizing on Good Times, April 2018
April 18, 2018--Global debt hit a new record high of $164 trillion in 2016, the equivalent of 225 percent of global GDP. Both private and public debt have surged over the past decade. High debt makes government's financing vulnerable to sudden changes in market sentiment. It also limits a government's ability to provide support to the economy in the event of a downturn or a financial crisis.
Countries should use the window of opportunity afforded by the economic upswing to strengthen the state of their fiscal affairs. The April 2018 Fiscal Monitor explores how countries can reduce government deficits and debt in a growth-friendly way.
High government debt is a concern
Of the $164 trillion, 63 percent is nonfinancial private sector debt, and 37 percent is public sector debt. Advanced economies are responsible for most global debt. Nevertheless, in the last ten years, emerging market economies have been responsible for most of the increase. China alone contributed 43 percent to the increase in global debt since 2007. In contrast, the contribution from low income developing countries is barely noticeable.
view the IMF April 2018 Fiscal Monitor
Source: IMF
ICE to begin futures trading in new alternative Libor rate
April 18, 2018-- IntercontinentalExchange, which administers the Libor lending rate, is to begin trading futures on the alternative benchmark rate intended to supplant the scandal-hit Libor.
The new 3 month Sonia futures contracts will be cash-settled and will debut on June 1, subject to regulatory approval, ICE said.view more
Source: FT.com
IMF-World Economic Outlook, April 2018 Cyclical Upswing, Structural Change
April 17, 2018--The global economic upswing that began around mid-2016 has become broader and stronger. This new World Economic Outlook report projects that advanced economies as a group will continue to expand above their potential growth rates this year and next before decelerating, while growth in emerging market and developing economies will rise before leveling off.
For most countries, current favorable growth rates will not last. Policymakers should seize this opportunity to bolster growth, make it more durable, and equip their governments better to counter the next downturn.
view the IMF World Economic Outlook, April 2018 Cyclical Upswing, Structural Change
Source: IMF
Regulation is shrinking capital markets
April 16, 2018--On 7 December last year, agreement was reached on the remaining proposals on bank capital requirements from the Basel Committee, thereby completing the main body of the post-crisis regulatory reforms. While they remain to be implemented, we are now clearly rebalancing away from rule making towards evaluating the effectiveness of the reforms.
It is generally acknowledged that that adoption of the Basel rules has made both banks and the overall financial system more resilient. A new post crisis regulatory framework was needed and has been broadly supported by the industry. However, there is not much empirical research available on the actual costs and benefits of the reforms. Instead, policymakers have been forced to rely on forward-looking studies which provide best guesses of what the impacts were likely to be in the future.
view the Impact of Regulation on Banks' Capital Markets Activities An ex-post assessment
Source: AFME
The Eurekahedge Report-April 2018
April 16, 2018--Highlights from this month's report
Hedge funds were down 0.13% as of Q1 2018-their worst quarterly showing since Q1 2016. Assets of the industry expanded by US$31.1 billion over the past three months largely on account of investor subscriptions which stand at US$31.8 billion since the start of 2018.
The US$256.0 billion CTA/managed futures mandated hedge fund industry has seen its asset base contract by US$13.5 billion year-to-date, with managers witnessing the highest performance-based losses of US$12.6 billion among strategic mandates for Q1 2018, while investor redemptions stood at US$0.9 billion over the same period. The Eurekahedge CTA/Managed Futures Hedge Fund Index was down 1.54% year-to-date.
The US$1.65 trillion North American hedge fund industry posted the steepest performance-based losses among regional mandates for Q1 2018, totalling US$1.2 billion while net asset inflows to the region stood at US$20.1 billion-almost 17% lower compared to the net asset inflows recorded in Q1 2017.
Multi-strategy mandated hedge funds saw the highest net outflows among strategic mandates for Q1 2018 following steep redemptions worth of US$15.3 billion in February – the highest monthly redemption on record. The Eurekahedge Multi-Strategy Hedge Fund Index was down 0.71% in March and down 0.08% year-to-date.
Source: Eurekahedge
ETF Securities Weekly Flows Analysis-Gold inflows strengthen as geopolitical risks take centre
April 16, 2018--Geopolitical risk drives US$33.2mn into long gold ETPs and US$13.6mn into long silver ETPs.
Inflows into copper ETPs rebound with US$29.1mn inflows last week.
US dollar ETP positions widened for the second week in a row to US$10.2mn, as investors positioned against the Euro.
Gold ETPs attracted the largest inflows in 23 weeks as risk aversion took centre stage amidst military activity in Syria and ongoing trade tensions. Following days of sabre rattling by Mr Trump, the US, UK and France launched a missile attack on Friday in an attempt to destroy the Assad regime's chemical weapon capabilities in Syria. In response, Russian president Vladimir Putin condemned the attack and warned that such action would inevitably lead to chaos. As the first port of call in times of political uncertainty, we expect gold to remain in demand for as long as the conflict between the US and Russia continues on the back of the Syrian crisis. In fact, for most of this year gold has been sporting its safe-haven hat.
Source: etfsecurities.com