Global ETF News Older than One Year
DECPG Weekly Economic Brief-November 14, 2014
November 14, 2014--Oil prices dropped almost 20 percent between June and October 2014, and weakened to $78/bbl in mid-November, for the first time
since the 2008/09 financial crisis. The U.S. dollar appreciation, strong oil supplies and weak demand due to growth slowdown, diminished geopolitical risks, and OPEC's inaction contributed to the price weakness. A sustained decline in oil prices could result
from a greater-than-expected expansion in oil production in the U.S. and a sharper-than-expected deceleration in global oil demand.
Numerous factors contributed to the oil price weakness. These included the strengthening of the U.S. dollar against major currencies, weakening growth prospects in emerging economies (where most growth in oil demand takes place), anemic growth outlook in the euro area, and strong supplies by the U.S. and some OPEC member countries, including Libya and Iraq despite rebel insurgencies in the latter. The U.S. added more than 3 mb/d to global crude oil supplies in the past four years as new technologies-hydraulic fracturing and horizontal drilling-are enabling numerous small energy companies to extract quantities of crude oil from tight rock formations. OPEC's inaction may have also played a role in the price decline.
Source: World Bank
LSE to conclude Russell deal within weeks
November 13, 2014--The London Stock Exchange Group said its planned $2.7bn purchase of Russell Investments,
the US indices compiler, was ahead of schedule and likely to close in the coming weeks...
Source: FT.com
Carney-Yellen Neck-and-Neck on Being First to Raise Rates
November 13, 2014--Federal Reserve Chair Janet Yellen may just beat Bank of England Governor Mark Carney to the first interest-rate increase since the financial crisis.
Investors extended bets yesterday on how long the BOE will keep its benchmark at a record-low 0.5 percent after officials cut their growth and inflation forecasts.
Source: Bloomberg
World Gold Council-Gold Demand Trends Third Quarter 2014
November 13, 2014--This edition of GDT examines all the latest developments of gold demand and supply during the third quarter of 2014 by sector and by region
Third quarter 2014 in summary
Jewellery demand in good health: Q3 demand of 534.2t above 5-year quarterly average
Third quarter demand was marginally stronger than the 5-year quarterly average of 527.6t, while year-to-date volumes extended the broad uptrend from the low seen in 2009.Year-on-year comparisons were again heavily influenced by the events of last year: demand was 4% below Q3 2013.
Investment demand up 6% to 204t, retail investors continued to digest 2013 demand surge
A remarkably stable gold price was both a cause and effect of a benign demand environment in the third quarter. Bar and coin investors continued to digest the demand surge of 2013, lacking clear price signals to provide fresh impetus to invest.
view the Gold Demand Trends Q3 2014 report
Source: World Gold Council (WGC)
Signs of stress must not be ignored, IEA warns in its new World Energy Outlook
Energy sector must tackle longer-term pressure points before they reach breaking point
November 12, 2014--Events of the last year have increased many of the long-term uncertainties facing the global energy sector, says the International Energy Agency's (IEA) World Energy Outlook 2014 (WEO-2014).
It warns against the risk that current events distract decision makers from recognising and tackling the longer-term signs of stress that are emerging in the energy system.
In the central scenario of WEO-2014, world primary energy demand is 37% higher in 2040, putting more pressure on the global energy system. But this pressure would be even greater if not for efficiency measures that play a vital role in holding back global demand growth. The scenario shows that world demand for two out of the three fossil fuels-coal and oil-essentially reaches a plateau by 2040, although, for both fuels, this global outcome is a result of very different trends across countries.
Source: International Energy Agency (IEA)
Deciphering Developing Markets-HDFC Bank and Foreign Institutional Investors
November 12, 2014-- Indian mortgage giant HDFC Bank is becoming a darling of foreign institutional investors (FIIs) since the board of directors in 2012 voted to allow FIIs up to a 100% stake in the bank.
These investors now hold upwards of a 75% investment. This comes on the back of positive ratings the Indian economy and equity markets have garnered after the election of a market friendly government in May. HDFC is a very well run and highly profitable financial institution. It is the fifth largest bank and the largest private sector bank in India, with a current market capitalization of $35.75 billion. Its shares are listed on both the Bombay Stock Exchange and the National Stock Exchange in India. The ADRs are traded on the NYSE under the symbol HDB, and the GDRs are traded on the Luxembourg Stock Exchange. In the recent quarter ending September 30, the stock was up 6.25% as against the Sensex Benchmark, of which it is a member, which is up 4.78%, YTD the stock is up 52.32%.
Source: Peter Kohli, DMS Funds
50% greater probability of achieving objectives with goal-based investing compared to traditional private wealth management approach
November 12, 2014--The success or failure of satisfying investors' objectives does not critically depend upon the stand-alone performance of a particular fund nor that of a given asset class. It depends instead upon how well the performance of the investors' portfolios dynamically interacts with the risk factors impacting the present value of investors' goals as well as the present value of non-tradable assets and future income streams, if any.
While the efficient management of all risk buckets, versus market risk alone, should be a central component of any investment solution, the practical implications of this insight have not been fully exploited to date.
Source: EDHEC
Reports on measures to reduce risk-weighted asset variability and on Basel III implementation by the Basel Committee
November 12, 2014--The Basel Committee on Banking Supervision has today published two documents prepared for the G20 Leaders' Summit in Brisbane on 15-16 November:
a report on measures to reduce excessive variability in banks' regulatory capital ratios; and
an update on the implementation of Basel III standards since the 2013 progress report to G20 Leaders.
Studies conducted by the Basel Committee on banks' risk-weighting of assets confirmed that there are material variances in banks' regulatory capital ratios that arise from factors other than differences in the riskiness of banks' portfolios. These variances undermine confidence in capital ratios. In response, the Committee initiated a number of policy and supervisory actions to address excessive variability in risk-weighted assets that are based on a bank's internal models.
view the Reducing excessive variability in banks' regulatory capital ratios-A report to the G20
Source: BIS
SSgA Global ETF Snap Shot-October 2014
November 10, 2014--STATE STREET GLOBAL ADVISORS HIGHLIGHTS, OCTOBER 2014
October was a tale of two months. Risky assets fell sharply in the first half of the month as investors de-risked their portfolios. At times, the sell-off felt orderly. At others, it felt far from it. Causes for this latest bout of market volatility ranged from scares of an outbreak of the Ebola virus to ghosts of the European sovereign debt crisis re-emerging. But things changed mid-month. Fears of 2008 were quickly overtaken by shifts in investor sentiment to a happier place.
Encouraging economic prints did their part to soothe the sentiment of market participants as well. Global central banks also got in on the action with the Bank of Japan boosting their QQE program just as the Federal Reserve ended their most recent asset purchasing program.
Consistent with returns, investors largely honed in on bond ETFs with inflows amounting to $20.4BN. After pulling money from equity ETFs to start the month, investors began to put capital to work as the month came to a close, eventually leading to flows of $14.7BN. Even with the choppiness, corporate fundamentals remain strong with 75% of US large caps beating their earnings estimates. Commodities experienced another month of outflows with year-to-date totals of over $972MM out.
GLOBAL ETF LISTING REGION
The United States had over $27BN of inflows in October. Europe experienced inflows of $8.7BN in October while APAC had outflows of $1.5BN.
GLOBAL PERFORMANCE BY ASSET CLASS
MSCI AC World IMI increased 0.8% while MSCI EAFE declined 1.5%. Emerging markets gained 1.2% while Emerging Markets Small Cap fell 1.9%. US Large Cap, Mid Cap and Small Cap markets were positive, increasing 2.4%, 3.6% and 7.1%, respectively. The Global Aggregate stayed even and the Global Treasury Ex US fell 0.8%. The US Aggregate, the US Treasury, the US Corporate Bond and the US High Yield markets were all positive. The US REIT market was up 10.7%. Commodities were negative, with the Dow Jones-UBS Commodity Index falling 0.8% and Gold dropping 4.3%.
GLOBAL ETF FLOWS BY ASSET CLASS
Global ETF inflows topped $34BN in October. Equity had inflows of $14.7BN, which were driven by inflows of $8.6BN into Developed Markets Large Cap. Fixed Income had inflows of $20.4BN. The fixed income inflows were primarily driven by $9.7BN of inflows from Developed Markets Government Treasury..
Source: SSgA
ETFS Precious Metals Weekly- Bargain Hunting Time
November 10, 2014--Gold cost of production supports price as physical buying accelerates. Despite new
record high US equity prices and the stronger US dollar, gold was the best performing precious metal last week, declining only 0.8% compared to the 4.8% decline in silver and the
2.4% and 2.7% respective declines in platinum and palladium. One of the most obvious and instantaneous signs of strong physical demand, gold forward rates (GOFO) ended the week
in negative territory out to three months.
Gold withdrawals from the Shanghai Gold Exchange (SGE) have accelerated to an annual pace near 2,700 tons, which is close to total global mine supply. During the month of October, just over 227 tons were withdrawn from the SGE, which is almost double that of October 2013. Meanwhile, Hong Kong gold imports for September were the highest in 5-months. In India, the Business Times of Mumbai reported heavy buying on the back of recent price declines. With the marginal cost of production for gold near US$1,100oz. and the all-in cost near US$1,200/oz., bargain hunting appears to be driving physical buying. Although gold ETFs continued to see outflows, inflows are beginning in silver, platinum and palladium ETFs. All the precious metals are currently near or below their marginal costs of production, which if sustained, should curtail mining activity, tightening supply and supporting prices.
Source: ETF Securities
