Global ETF News Older than One Year
Emerging Market Economies Bear the Brunt of a Stronger Dollar
July 19, 2023--The US dollar's strengthening last year to a 20-year high had major implications for the global economy. We examine these spillovers from the currency's appreciation in our latest External Sector Report.
Building on recent research by Maurice Obstfeld and Haonan Zhou, we find that negative spillovers from US dollar appreciations fall disproportionately on emerging market economies when compared with smaller advanced economies.
In emerging market economies, a 10 percent US dollar appreciation, linked to global financial market forces, decreases economic output by 1.9 percent after one year, and this drag lingers for two and a half years. In contrast, the negative effects in advanced economies are considerably smaller in size, peaking at 0.6 percent after one quarter and are largely gone in a year.
Source: imf.org
BlackRock predicts 'trillions' in fixed income investment as profits rise
July 13, 2023-Assets under management at world's largest money manager climb to $9.4tn, even as net inflows miss expectations
BlackRock predicted a surge of investment into bond funds once the US Federal Reserve stops raising interest rates as the money manager beat earnings expectations and reported assets under management had recovered to $9.4tn.
Investors have flocked to money market funds to take advantage of rising interest rates- pushing the total in US MMFs above $5tn- but BlackRock said much of that horde was poised to shift into fixed income once investors feel sure that yields would not be hit by further Fed action.
Source: ft.com
Worldwide Digital Asset Based Exchange Traded Products AUM Grew 76% Year-To-Date and 10.7% In June
July 11, 2023--Fineqia International Inc. (the "Company" or "Fineqia") , a leading digital asset and fintech investment business, announces that its analysis of global Exchange Traded Products (ETPs) with digital assets as underlying collateral, revealed a 76% growth in total Assets Under Management (AUM) in the year-to-date (YTD) period amid renewed interest by investors.
The AUM increase was at a 52% premium to the underlying value of digital assets, which grew slower at 50% since the beginning of the year. This can be attributed to the price rise of the main digital asset that underpins ETPs, i.e., Bitcoin, vis-a-vis smaller alternative coins and as well to strong capital inflows into these listed products during the month of June.
Source: Fineqia International Inc.
Scientists say they've found a site that marks a new chapter in Earth’s history
July 11, 2023--Scientists have identified the geological site that they say best reflects a proposed new epoch called the Anthropocene- a major step toward changing the official timeline of Earth's history.
The term Anthropocene, first proposed in 2000 to reflect how profoundly human activity has altered the world, has become a commonly used academic buzzword uniting different fields of study.
"When it's 8 billion people all having an impact on the planet, there's bound to be a repercussion," said Colin Waters, an honorary professor at the Geography, Geology and the Environment School at the University of Leicester and chair of the Anthropocene Working Group.
Source: cnn.com
1 in 6 asset and wealth managers to vanish by 2027
July 10, 2023--One in six asset and wealth management companies globally is expected to disappear or be acquired by 2027, twice the normal turnover rate, according to a survey by PwC.
The '2023 Global Asset and Wealth Management Survey' highlights the industry's struggle with digital transformation, changing investor expectations, consolidation and "retailisation."
In response, 73% of asset managers are considering strategic consolidation to gain access to new segments, increase market share and mitigate risks.
Source: funds-europe.com
BIS Working Paper-Innovation convergence
July 6, 2023--Summary-Focus
Economic convergence-the idea that less developed countries should grow faster and catch up with more developed ones- is predicted by many basic economic models of growth and has been a central empirical question. Innovation and improvement in productivity are essential for sustained long-term growth. Thus, the role of innovation in the convergence process- and whether innovation itself converges- is crucial to understand long-term growth.
Contribution
We examine patenting (a measure of innovative activity) at the country-industry level. We test for convergence in patenting rates (growth is faster when the number of initial patents are lower) both within and across countries and industries. Our data cover 20 manufacturing industries from 32 countries over 1976-2006. We also explore the role of countries' financial and institutional environment in speeding up patenting convergence.
Findings
Patent rates converge in general, across industries within a country, and across countries for a given industry
Source: BIS
Soaring global debt and hiked interest rates are creating a big issue for developing countries. Here’s why
July 3, 2023-- It is becoming increasingly expensive for developing countries to service external debt.
The issue is threatening development goals as governments are increasingly forced to divert money away from other priorities.
Experts are calling for better coordination and communication between major economies to mitigate the debt crisis.
Rising interest and depreciating exchange rates are driving capital back to developed nations-and closing doors to credit for developing countries. The situation, experts say, is forcing developing countries to borrow at higher interest rates, further exacerbating the ballooning level of global debt.
Global debt-which hit $305 trillion in recent months-has been increasing in recent years as the global economy endures compounding shocks such as COVID-19 and the war in Ukraine. Developing countries in particular saw external debt levels grow by over 15% last year compared to pre-pandemic levels, according to the United Nations.
Source: weforum.org
Util-In the spotlight: Fashion's existential dilemma
June 30, 2023--One sector, in particular, is scrambling to prove progress and plug its sustainability data gap. Surveyed by Vogue, 45 leading fashion and beauty houses overwhelmingly cited supply-chain data as the greatest challenge to meeting regulatory and reporting requirements.
Those supply chains are sprawling and destructive, yielding concerns about water consumption and chemical use, human labour, greenhouse gas (GHG) emissions, and vast textile waste. Just 1% of clothes are recycled. Globally, the sector is responsible for 10% of GHG emissions; synthetic textiles, for 35% of microplastic releases.
Source: util.co
IMF Working Paper-Decomposing Climate Risks in Stock Markets
June 30, 2023--Summary:
Climate change poses an unprecedented challenge to the world economy and the global financial system. This paper sets out to understand and quantify the impact of climate mitigation, with a focus on climate-related news, which represents an important information source that investors use to revise their subjective assessments of climate risks.
Using full-text data from Financial Times from January 2005 to March 2022, we develop machine learning-based indicators to measure risks from climate mitigation, and the direction of the risk is identified through manual labels.
The documented risk premium indicates that climate mitigation news has been partially priced in the Canadian stock market. More specifically, stock prices react positively to market-wide climate-favorable news but they do not react negatively to climate-unfavorable news. The results are robust to different model specifications and across equity markets.
Source: IMF
IMF Working Paper-Is High Debt Constraining Monetary Policy? Evidence from Inflation Expectations
June 30, 2023--Summary:
This paper examines whether high government debt levels pose a challenge to containing inflation. It does so by assessing the impact of government debt surprises on inflation expectations in advanced- and emerging market economies.
It finds that debt surprises raise long-term inflation expectations in emerging market economies in a persistent way, but not in advanced economies. The effects are stronger when initial debt levels are already high, when inflation levels are initially high, and when debt dollarization is significant. By contrast, debt surprises have only modest effects in economies with inflation targeting regimes. Increased debt levels may complicate the fight against inflation in emerging market economies with high and dollarized debt levels, and weaker monetary policy frameworks.
Source: IMF.org
