Global ETF News Older than One Year
Less than 18 percent of global stocks owned by index investors: BlackRock
October 3, 2017-- Less than 18 percent of the global stock market is owned by index-tracking investors, according to a new estimate from BlackRock Inc (BLK.N), as it suggested that passive investing plays only a limited role in setting equity prices
The estimate on Tuesday showed that $11.9 trillion in stocks were owned by mutual funds, exchange-traded funds, institutional accounts and private investors that track an index.
Source: Reuters
ETF Securities-Investment Insights September 2017 5 Ways Emerging Markets May Boost Commodities
October 3, 2017--Summary
High correlation to emerging markets coupled with rising
investor interest may further drive commodity prices.
Supply may slow further as strengthening emerging market
currencies raise commodity producer costs.
Demand supported by infrastructure and consumer spending.
After suffering through a multi-year malaise, emerging markets (EM) have finally begun to see some life with an improving economic backdrop and corresponding equity rally. While the MSCI Emerging Market Index has risen nearly 30% year to date, commodities have lagged (see Exhibit 1). Yet, given their close relationship with emerging market economies, commodities may realize several tailwinds from this turnaround in emerging markets.
Source: etfsecurities.com
IMF Working papers-Lessons from the Old Masters on Assessing Equity and Efficiency: A Primer for Fiscal Policymakers
October 3, 2017--How can a society's well-being be measured to include not only average incomes but also their distribution? How can the effects of policies be assessed by considering both equity and efficiency?
This primer outlines the seminal contributions of influential economists of the past, including Arthur Okun, who developed a simple method to elicit people’s preferences regarding redistribution, and Anthony Atkinson, who showed how equity and efficiency can be measured simultaneously and summarized in a single, intuitive index expressed in monetary units (such as dollars). These methods are applied to recent data to gauge how countries fare when both mean incomes and their distribution are considered together, and to a hypothetical tax-and-transfer scheme assessed through a general equilibrium model for household-level data.
Source: IMF
FSB publishes consultation on Unique Product Identifier (UPI) governance
October 3, 2017--The Financial Stability Board (FSB) today published a consultation document on proposed Governance arrangements for the unique product identifier (UPI).
The consultation sets out proposals for the governance arrangements for a global UPI, as a key harmonised identifier designed to facilitate effective aggregation of transaction reports about over-the-counter (OTC) derivatives markets.
G20 Leaders agreed at the Pittsburgh Summit in 2009, as part of a package of reforms to the OTC derivatives markets, that all an OTC derivatives transaction should be reported to trade repositories (TRs).1
Source: Financial Stability Board (FSB)
Global Financial Stability Report October 2017
October 3, 2017--Chapter Two : Household Debt and Financial Stability
Chapter 2 examines the short-and medium-term implications for economic growth and financial stability of the past decades' rise in household debt. The chapter documents large differences in household debt-to-GDP ratios across countries but a common increasing trajectory that was moderated but not reversed by the global financial crisis.
Among advanced economies, the median household debt-to-GDP ratio rose to 63 percent in 2016 from 52 percent in 2008. Among emerging economies, it increased to 21 percent from 15 percent over the same period. The chapter finds a trade-off between a short-term boost to growth from higher household debt and a medium-term risk to macroeconomic and financial stability that may result in lower growth, consumption, and employment and a greater risk of banking crises.
Source: IMF
ETF Securities Weekly Flows Analysis-Industrial metal ETP inflows resume
October 2, 2017--Industrial metal ETPs saw their first inflows in four weeks.
Robotic ETPs saw highest inflows since March 2017.
Outflows from oil ETPs continued as early-week price gains fail to hold.
Industrial metal ETPs saw their first inflows in four weeks. As industrial metal positioning started to look stretched in August, we saw outflows begin and that continued as prices fell. However, last week as prices of most metals started to show signs of reaching a trough, inflows resumed. Speculative positioning in the futures market have pared back and volumes of trading in Shanghai have fallen indicating momentum trades are being shaken out. We saw US$5.0mn into long copper and US$4.4 into long nickel ETPs.
Source: etfsecurities.com
Ultumus-Bring out your dead...
October 2, 2017--It's a well-noticed fact that the "ETF graveyard" is erecting more tombstones by the week. But today is unusual. Today more ETFs have been delisted than any other day this year...
There does not seem to be a common theme. Bringing out their dead, issuers have delisted the iShares Finland Gov't Bond ETF; Lyxor's MSCI Taiwan ETF; db-x Australian Dollar ETF; Samsung's Kodex Consumer Discretionary ETF-to name but four. The delistings are from all segments and from all over the world.....
USA
Multi-asset ETF from VanEck
VanEck has listed a new multi-asset "ETF of ETFs" that adjusts its allocations between the S&P 500 and Treasury bills based on market signals....
Germany
db-x trackers to list two dividend ETFs
db-x trackers is listing two new dividend ETFs on Xetra at some point this month. ...
Source: ULTUMUS-Financial Data Management
IMF-Understanding Debt: A Better Tool for Low-Income Countries
October 2, 2017--Here are some basics about the debt sustainability analysis the IMF and the World Bank plan to undertake.
Why is the issue of debt and its sustainability particularly pertinent for low-income economies?
Low-income countries have grown significantly over the last decade, but they still have considerable and crucial investment needs, which will need to be financed through borrowing from the rest of the world. The World Bank estimated that the infrastructure needs in Africa would be over $90 billion per year over the next decade, out of which only $45 billion is currently being met.
view the Review of the Debt Sustainability Framework for Low Income Countries: Proposed Reforms
Source: IMF
IMF Working paper-Uncertainty, Financial Frictions and Nominal Rigidities: A Quantitative Investigation
September 29, 2017--Summary:
Are uncertainty shocks a major source of business cycle fluctuations? This paper studies the effect of a mean preserving shock to the variance of aggregate total factor productivity (macro uncertainty) and to the dispersion of entrepreneurs' idiosyncratic productivity (micro uncertainty) in a financial accelerator DSGE model with sticky prices.
It explores the different mechanisms through which uncertainty shocks are propagated and amplified. The time series properties of macro and micro uncertainty are estimated using U.S. aggregate and firm-level data, respectively. While surprise increases in micro uncertainty have a larger impact on output than macro uncertainty, these account for a small (non-trivial) share of output volatility.
Source: IMF
IMF Working paper-FX Intervention in the New Keynesian Model
September 29, 2017--Summary:
We develop an open economy New Keynesian Model with foreign exchange intervention in the presence of a financial accelerator mechanism. We obtain closed-form solutions for the optimal interest rate policy and FX intervention under discretionary policy, in the face of shocks to risk appetite in international capital markets.
The solution shows that FX intervention can help reduce the volatility of the economy and mitigate the welfare losses associated with such shocks. We also show that, when the financial accelerator is strong, the risk of multiple equilibria (self-fulfilling currency and inflation movements) is high. We determine the conditions under which indeterminacy can occur and highlight how the use of FX intervention reinforces the central bank's credibility and limits the risk of multiple equilibria.
view the IMF Working paper-FX Intervention in the New Keynesian Model
Source: IMF
