Global ETF News Older than One Year
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
WEF-More Holistic Views Key to Better Resource Management
November 10, 2014--Divided views about the future of natural resources are preventing better resource management
Understanding the drivers of future resource availability can create common ground among decision-makers
Above-ground risks present more of a threat to natural resources than physical depletion
The gravest threat to the future availability of natural resources comes not from their physical depletion but from above-ground risks and a lack of understanding of the drivers of resource scarcity. This is according to a new report, The Future Availability of Natural Resources: A New Paradigm for Global Resource Availability, released today by the Forum.
Source: WEF (World Economic Forum)
ETFGI's research finds global ETFs/ETPs gathered 35.8 billion US dollars in net new assets in October 2014 and a record 233.0 billion US dollars in NNA year-to-date
November 10, 2014--ETFGI's research finds October's global net new asset (NNA) inflows of US$35.8 Bn, while large, are not a record month. The largest month for NNA inflows was September 2012 with US$45.8 Bn. Year-to-date ETFs and ETPs globally have gathered a record US$233.0 Bn in NNA through the end of October 2014, surpassing the previous high of US$205.2 Bn set in the first 10 months of 2013.
ETFGI's research finds October's global net new asset (NNA) inflows of US$35.8 Bn, while large, are not a record month. The largest month for NNA inflows was September 2012 with US$45.8 Bn. Year-to-date ETFs and ETPs globally have gathered a record US$233.0 Bn in NNA through the end of October 2014, surpassing the previous high of US$205.2 Bn set in the first 10 months of 2013.
At the end of October 2014, the global ETF/ETP industry had 5,516 ETFs/ETPs, with 10,628 listings, from 228 providers listed on 61 exchanges with assets of US$2.68 Tn, which is down slightly from the record high of US$2.70 Tn at the end of August 2014, according to preliminary data from ETFGI's end October 2014 Global ETF and ETP industry insights report.
Year-to-date NNA flows reached record levels for the ETF/ETP industries in Japan with US$15.7 Bn, Europe with US$56.1 Bn, and globally with US$233.4 Bn. Assets invested in the US-listed ETF/ETP industry hit a new record high of US$1.95 Tn.
In October the global ETF/ETP industry gathered a record level of NNA into fixed income products, with US$20.3 Bn surpassing the prior high of US$16.2 Bn set in February 2014. US-listed ETFs/ETPs also registered a record level of monthly NNA into fixed income products, gathering US$16.3 Bn surpassing the prior record of US$13.5 Bn set in February 2014.
Source: ETFGI
BlackRock Landscape: Record Fixed Income Flows
November 10, 2014-- FIXED INCOME ETP FLOWS SET NEW RECORD IN OCTOBER ON GLOBAL GROWTH CONCERNS
Global ETP flows of $37.3bn were driven by fixed income with $19.9bn although equity flows also finished strong as stocks rebounded from a sharp correction attributed to economic growth and low inflation concerns
The fixed income inflows represented an all-time high, including records for US and European exposures, and year-to-date asset gathering of $73.3bn has already broken the annual record of $70.0bn set in 2012
EM equity redemptions of ($3.0bn) were impacted by tactical trading in broad funds, but opportunities remain for selective investors currently underweight EM, particularly for Asian economies with attractive valuations and less sensitivity to rates/central bank action
Source: BlackRock- ETP Research
S&P Dow Jones Indices And MSCI Announce The Creation Of A Real Estate Sector In The Global Industry Classification Standard (GICS(R)) Structure
November 10, 2014--S&P Dow Jones Indices, a leading provider of financial market indices, and MSCI Inc., a leading provider of investment decision support tools worldwide, announced today that as a result of their annual review of the Global Industry Classification Standard (GICS(R)) structure, a new Real Estate Sector is being created, elevating its position from under the Financials Sector and bringing the number of GICS Sectors to 11.
Additionally, a new Sub-Industry for Copper is being created. The changes are being considered for implementation after the market close (ET) on August 31, 2016.
Source: S&P Dow Jones Indices
ETFS Research Note-Precious Metals, Gold and Emerging Markets
November 7, 2014--Emerging markets (EMs) are increasingly the biggest drivers of precious metals (PMs) demand.
In 2013, nearly 60% of the global demand for gold, silver, platinum and palladium came from emerging markets-up from about a 1/3rd in 2003 and 1/4 in 1993.
Rapidly increasing per capita incomes and wealth are driving the demand for precious metals for jewelry, investment, electronics and emission controls.
Average per capita GDP in the BRIC countries has increased about 4-fold since the year 2000.
PMs are increasingly becoming an integral part of EMs portfolio exposure
PM demand is shifting to emerging markets, led by China and India
Since 2006, when India and China absorbed about a third of total gold global mining supplies, the average of India and China per capita GDP has approximately tripled to US$4,100 (in 2013) with a total population of 2.7 billion.1 This rapid per capita GDP growth trend is likely to continue and has the potential to accelerate. China surpassed India in 2013 as the world's largest consumer of gold.
Source: ETF Securities
