Global ETF News Older than One Year
ETFs pour into top US oil contract
March 20, 2015--Almost a third of the most active US oil futures contract is now controlled by exchange traded funds, turning smaller investors into a muscular force on global commodities markets.
ETFs track baskets of securities or commodities in a convenient wrapper that trades on a stock exchange.
Source: FT.com
The Liquidity Conundrum: Increasing Regulatory Risk for the Buy Side & More Structural Change for the Sell Side, Finds Annual Oliver Wyman & Morgan Stanley Report
March 19, 2015--Banks have shrunk their balance sheets by 20% since 2010 and another 10-15% reduction is still to come by 2017, significantly reducing liquidity in secondary markets
Interviews with asset managers, totalling assets under management (AuM) of more than USD10TN, indicate liquidity in fixed income markets is one of their top concerns
For asset managers, regulatory risks and earnings risks are rising as policymakers grow more concerned about the transition out of Quantitative Easing (QE) and into rising interest rates, while the sell side will have to restructure further and faster
Oliver Wyman and Morgan Stanley published their joint annual report about wholesale and investment banking today titled, The Liquidity Conundrum: Shifting risks, what it means. The report finds that a reduced provision of liquidity in fixed income markets faces policy makers and investors and how it's resolved will have long-term investment implications.
Source: Oliver Wyman
MSCI Introduces Diversified Multi-Factor Indexes
March 19, 2015--MSCI Inc. (NYSE:MSCI), a leading provider of equity factor indexes and models, today announced that it has launched a series of Diversified Multi-Factor Indexes.
Research has shown that stocks reflecting certain factors have, over time, provided a higher return than the overall market. MSCI Diversified Multi-Factor Indexes use Barra risk tools to construct indexes that track the performance of four of these factors- Value, Momentum, Quality and Low Size-while keeping risk at the level of an underlying parent index.
Source: MSCI
Low oil prices and monetary easing triggering modest acceleration of global recovery
March 18, 2015--Low oil prices and monetary easing are boosting growth in the world's major economies, but the near-term pace of expansion remains modest, with abnormally low inflation and interest rates pointing to risks of financial instability, according to the OECD's latest Interim Economic Assessment.
Strong domestic demand is driving growth in the United States, which, combined with dollar appreciation, is adding to demand in the rest of the world. The euro area should benefit from low oil prices, monetary stimulus and euro depreciation, which combine to offer the chance to escape from stagnation.
Source: OECD
Basel Committee and IOSCO issue revisions to implementation schedule of margin requirements for non-centrally cleared derivatives
March 18, 2015--The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) today released revisions to the framework for margin requirements for non-centrally cleared derivatives. [The revised framework is available on the websites of the Bank for International Settlements and IOSCO.]
The framework was originally published in September 2013, after two public consultations. Recognising the complexity of implementing the framework, the Basel Committee and IOSCO have agreed to (i) delay the implementation of requirements to exchange both initial margin and variation margin by nine months; and (ii) adopt a phase-in arrangement for the requirement to exchange variation margin.
Source: IOSCO
Schwab, Guggenheim make their mark in ETFs
Low fees and strong performance draw investors, but buyer beware
March 18, 2015--The business of exchange-traded funds is dominated by three big players: BlackRock's iShares, Vanguard Group, and State Street, which collectively control 82% of the roughly $2 trillion invested in ETFs.
Other firms are fighting to gain market share, and several have made their way into Bloomberg Markets' annual ranking of the fastest-growing funds over the three years ended on Dec. 31.
Source: Investment News
Easy Money Drives Investors Into Stocks, Company Debt, BIS Says
March 18, 2015--Monetary stimulus around the world is increasing the amount of government bonds with yields below zero, and that's pushing investors into stocks and corporate debt, the Bank for International Settlements said.
European equity funds registered a cumulative inflow of almost $19 billion in the four weeks following the European Central Bank's announcement in January that it would start buying government bonds, the BIS said in a report published today.
Source: Bloomberg
Can We Avoid Real Estate Bubbles? Two New Forum Reports Explore the Issue
March 18, 2015--At this year's World Economic Forum Annual Meeting in Davos-Klosters, experts from central banks, government, academia and the real estate sector reviewed and finalized recommendations and policy options on how to proceed with the community's 2015 agenda.
Nouriel Roubini, Professor of Economics and International Business, Leonard N. Stern School of Business, New York University, who was part of the Davos discussion, said: "There is increasing evidence of frothiness in a number of housing markets in both advanced economies and emerging markets, including Canada, the UK, Switzerland, France, Sweden, Norway, China, Hong Kong and Singapore among others. We're also seeing early signs of overheating in a number of credit and equity markets across the world." In recent years, real estate markets have become more international and the global flows of foreign investment make local markets more susceptible to real asset volatility.
Source: World Economic Forum (WEF)
Banks Win 9-Month Swap Margin Rules Delay From Basel Group
March 18, 2015--Banks won a delay in the introduction of minimum global rules on the collateral needed to back trades in the $691 trillion market for swaps and other over-the-counter derivatives.
International regulators said the date for beginning to phase in the measures would be September 2016 compared with previous plans for a December 2015 start.
Source: Bloomberg
BIS-March 2015 BIS Quarterly Review: A wave of further easing
March 18, 2015--A growing share of sovereign debt and even some private bonds are now trading at negative yields as a wave of easier monetary policy feeds through into unprecedented bond market conditions.
The revival in international bank lending since early 2014 has occurred alongside persistently strong bond issuance in emerging markets. Cross-border lending to most Asian emerging economies continued to grow rapidly, although lending to China showed signs of peaking.
To view the potential costs of deflation solely through the lens of the Great Depression could be misleading, argue Claudio Borio, Magdalena Erdem, Andrew Filardo and Boris Hofmann (BIS). Their historical review finds little systematic connection between price deflation and growth.
The heavy indebtedness of oil producers may have amplified the sharp drop in oil prices and related investment, find Dietrich Domanski, Jonathan Kearns, Marco Lombardi and Hyun Song Shin (BIS).
view the BIS Quarterly Review, March 2015
Source: BIS
