Global ETF News Older than One Year
Central Banks Hike Interest Rates in Sync to Tame Inflation Pressures
August 10, 2022--During the pandemic, central banks in both advanced and emerging market economies took unprecedented measures to ease financial conditions and support the economic recovery, including interest-rate cuts and asset purchases.
With inflation at multi-decade highs in many countries and pressures broadening beyond food and energy prices, policymakers have pivoted toward tighter policy. As our Chart of the Week shows, central banks in many emerging markets proactively started to hike rates earlier last year, followed by their counterparts in advanced economies in the final months of 2021.
Source: imf.org
ETFGI reports global Hedge Funds industry had net outflows of 27.5 billion US dollars while Global ETFs industry had net inflows of 157.7 billion US dollars in Q2
August 10, 2022--ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs and ETPs ecosystem, reported today that the global Hedge Funds industry suffered net outflows of US$27.5 billion (source HFR) while the Global ETFs industry gathered net inflows of US$157.7 billion in Q2 2022.
Assets invested in the global ETFs industry are US$5.04 trillion larger than the assets invested in the global hedge fund industry at the end of Q2 2022. (All dollar values in USD unless otherwise noted.)
Highlights
Global Hedge Funds industry suffered net outflows of $ 27.5 Bn while Global ETFs industry gathered net inflows of $157.7 Bn in Q2 2022
Assets invested in the global ETFs industry are US$5.04 trillion larger than the assets invested in the global hedge fund industry at the end of Q2 2022.
Source: ETFGI
Who controls the world's minerals needed for green energy?
August 9, 2022--The Russian invasion of Ukraine has not simply exposed Europe's dangerous dependence on Russian oil and gas. The war has also underscored a less appreciated but equally worrisome vulnerability in the industrial West to threats that could hamper access to minerals vital to the transition from fossil fuels to clean energy.
Cobalt, copper, lithium, nickel, and rare earth elements (REEs) are all essential for producing electric vehicles and batteries, harnessing solar power and wind energy, and other actions to reduce the reliance of consumers and industries on fossil fuels. The supply of these critical minerals is vulnerable for various reasons. One is that production and processing of these minerals take place in a small number of countries, including some that have unstable political environments.
Source: piie.com
Investors swarm back to corporate bond ETFs
August 8, 2022--Investment grade and high-yield vehicles attracted $13.8bn in July, more than recouping the $9.9bn in outflows in June.
Money rushed back into investment grade corporate bond exchange traded funds in July with flows buoyed by "significant" buying of European-focused vehicles in a sign of improving sentiment.
Source: ft.com
Global Current Account Balances Widen Amid War and Pandemic
August 4, 2022--The war in Ukraine and resulting increase in commodity prices are expected to contribute to a further widening this year.
The lingering pandemic and Russia's invasion of Ukraine are dealing a setback to the global economy.
This is affecting trade, commodity prices, and financial flows, all of which are changing current account deficits and surpluses.
Global current account balances-the overall size of deficits and surpluses across countries-are widening for a second straight year, according to our latest External Sector Report. After years of narrowing, balances widened to 3 percent of global gross domestic product in 2020, grew further to 3.5 percent last year, and are expected to expand again this year.
Source: imf.org
Vanguard poised to usurp BlackRock as manager of largest bond ETF
August 4, 2022-BND fund has had net inflows of $6.9bn this year while iShares' AGG has bled $815mn
BlackRock is on the verge of being dethroned as the manager of the world's largest bond exchange-traded fund.
The shake-up comes during a tumultuous year for fixed-income funds, with the Bloomberg US Aggregate Bond Index, followed by several large funds, tumbling 10.5 per cent since December amid surging inflation.
Source: ft.com
This is the state of world's energy-in charts
August 3, 2022--Energy demand quickly returned to pre-pandemic levels as global economies emerged from lockdown, according to analysis from BP.
The drop in energy use during 2020 does not show much sign of helping the world reach climate goals- with emissions rising too.
Emerging economies fuelled the rise in demand worldwide.
Renewable energy is capturing a larger share of the market, but is still a long way behind fossil fuels.
People and businesses around the world used more power in 2021 than in the year before the pandemic, as lockdowns ended and energy demand bounced back, according to an analysis from BP.
The surge in demand is the largest in history and has helped to propel the energy system into its most turbulent period since the oil crisis of the 1970s. Russia's invasion of Ukraine has added to the turmoil, fuelling price hikes and threatening power shortages for some countries.
Source: weforum.org
The Earth's freshwater cycle has exceeded the safe limit, says research
August 3, 2022--Widespread pressure on green water -the rainwater available to plants in soil-has crossed a critical limit, a new studyhas found.
This means freshwater's ability to sustain a stable Earth system is even more threatened than previously thought, scientists say.
Food production also depends on green water -around 60% of staple food production globally and 80% of cultivated land is rain-fed.
Switching to sustainable alternatives would prevent more soil being degraded and losing its moisture, this would also help slow climate change and deforestation.
Green water-the rainwater available to plants in the soil - is indispensable for life on and below the land. But in a new study, we found that widespread pressure on this resource has crossed a critical limit.
The planetary boundaries framework-a concept that scientists first discussed in 2009-identified nine processes that have remained remarkably steady in the Earth system over the last 11,700 years.
Source: weforum.org
Soaring Inflation Puts Central Banks on a Difficult Journey
August 1, 2022--Upside risks to the inflation outlook remain large, and more aggressive tightening may be needed if these risks materialize.
Central banks in major economies expected as recently as a few months ago that they could tighten monetary policy very gradually.
Inflation seemed to be driven by an unusual mix of supply shocks associated with the pandemic and later Russia's invasion of Ukraine, and it was expected to decline rapidly once these pressures eased.
Now, with inflation climbing to multi-decade highs and price pressures broadening to housing and other services, central banks recognize the need to move more urgently to avoid an unmooring of inflation expectations and damaging their credibility. Policymakers should heed the lessons of the past and be resolute to avoid potentially more painful and disruptive adjustments later.
Source: imf.org
IMF Working Paper-Economic Growth After Debt Surges
July 29, 2022--Summary:
Debt levels, both private and public, were already at record highs before the Covid-19 pandemic, and surged further in 2020. The high indebteness raises concerns whether it will undermine future growth prospects. This paper contributes to the ongoing debate by examining what happens to economic growth after debt surges. We apply a local projection method to a new dataset of debt surges in 190 countries between 1970 and 2020.
Our results show that the relationship between debt surges and economic growth are complex. Debt surges tend to be followed by weaker economic growth and persistently lower output. However, this negative relationship does not always hold. Surges in public debt tend to have the most negative impact on future growth prospects. This is particularly the case if the economy is already operating with a large positive output gap. Debt surges also tend to be followed by weaker economic growth if the initial debt levels are high, especially for private debt surges. Our results also show how debt surges impact future growth. Public debt surges are associated with especially weaker private and public investment, although both private and public consumption are also negatively affected. Surges in corporate debt are followed by lower private and public investment.
Source: imf.org
