Global ETF News Older than One Year
IMF Working paper-Banks, Government Bonds, and Default: What do the Data Say?
July 7, 2014--Summary: We analyze holdings of public bonds by over 20,000 banks in 191 countries, and the role of these bonds in 20 sovereign defaults over 1998-2012. Banks hold many public bonds (on average 9% of their assets), particularly in less financially-developed countries.
During sovereign defaults, banks increase their exposure to public bonds, especially large banks and when expected bond returns are high. At the bank level, bondholdings correlate negatively with subsequent lending during sovereign defaults. This correlation is mostly due to bonds acquired in pre-default years. These findings shed light on alternative theories of the sovereign default-banking crisis nexus.
Source: IMF
July 4, 2014--BlackRock's exchange traded funds business past the $1tn milestone for assets for the first time in June, helped by a strong performance in Europe where the ETF industry registered record breaking growth in the first half of 2014.
Investors put a record $32.1bn into European listed ETFs (funds and products) in the first six months the year, compared with just under $4bn at the end of June last year, according to ETFGI, a consultancy.
Source: FT.com
Investors favour equity ETFs: report
July 4, 2014--Investors had found comfort in equity exchange-traded funds (ETF), with the products experiencing nearly US$84 billion in inflows in 2013 so far, according to a State Street Global Advisors (SSgA) report.
SSgA's "2013 Midyear SPDR ETF & Investment Outlook: The search for yield evolves" revealed broad market equity ETFs had experienced the greatest flows on an absolute basis, with over US$25 billion flowing through the door.
Source: financialobserver.com
Bitcoin Faces Regulatory Backlash as EU Tells Banks to Stay Away
July 4, 2014--The European Commission signaled it will try to impose rules on virtual currencies such as Bitcoin after the bloc's banking regulator ordered lenders to shun them.
"It's imperative to move quickly on this issue," Chantal Hughes, a spokeswoman for Financial Services Commissioner Michel Barnier, said by e-mail today. "The potential for money laundering and terrorist financing is too serious to ignore."
Source: Bloomberg
ETFs back on song in second quarter
July 4, 2014--Exchange-traded fund inflows shot up to $123.9 billion in the first half of the year, a rise of 25% compared with the same period in 2013, after a strong performance in the second quarter, according to data compiled by BlackRock.
Inflows of $90.6 billion in the three months to June were the highest for a quarter since 2009, helped by renewed interest in emerging markets. June was the best month year-to-date, with inflows of $36.3 billion.
Source: Financial News
Morgan Stanley buys Deutsche's bulk commodities trading book
July 3, 2014--Morgan Stanley has bought Deutsche Bank's bulk commodities trading book dealing in coal, iron ore and freight forward contracts to expand in commodities derivatives, a source familiar with the matter said on Thursday.
The deal marks an apparent return to iron ore for the Wall Street bank, which exited the market by last year, and an expansion in coal and freight.
Source: Reuters
DB Markets Research-The Flow Whisperer TAARSS says increase equities, but still prefer fixed income in Q3
Tactical Asset Allocation Relative Strength Signal (TAARSS) Monthly Update
July 2, 2014--Market review
Global equities (ACWI) extended their May rally into the month of June by
adding 1.82%. In turn, US bonds (AGG) were mostly flat during the same
period (-0.06%); while,Commodities recovered from the previous month losses
by recording a 2.11% gain in June.
TAARSS rotation strategy quarterly and monthly performance review TAARSS rotation strategies were all positive for the previous month and quarter; however most of them underperformed their benchmarks (Figure 1).
Within equities, EM (2.40%), US Small Caps (5.27%), Latin America (3.22%), and Canada (5.70%) were the strongest performers per strategy; while Gold (6.32%) and Convertibles (2.30%) were the top categories within commodities and fixed income, respectively during the month of June. On a quarterly basis, Global Equities recorded the strongest returns during Q2 with 5.95%.
Source: Deutsche Bank Markets Research-Global-Synthetic Equity & Index Strategy-
Average daily volume of 8.0 million contracts at Eurex Group in June
July 2, 2014--In June, the international derivatives exchanges of Eurex Group recorded an average daily volume of 8.0 million contracts (June 2013: 10.1 million). Of those, 6.0 million were Eurex Exchange contracts (June 2013: 8.1 million), and 2.0 million contracts (June 2013: 2.7 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 126.0 million contracts were traded at Eurex Exchange and 42.0 million at the ISE.
In its largest segment-equity index derivatives-Eurex Exchange achieved 56.4 million contracts (June 2013: 68.3 million). The single largest derivatives contract was the future on the EURO STOXX 50(R) Index with 26.3 million contracts. The option on this blue chip index totaled 17.4 million contracts. Futures on the DAX index totaled 2.1 million contracts while the DAX options reached another 2.2 million contracts. The Eurex KOSPI Product traded 1.0 million contracts.
Source: Eurex
IMF Working-Growth: Now and Forever?
July 2, 2014--Summary: Forecasters often predict continued rapid economic growth into the medium and long term for countries that have recently experienced strong growth.
Using long-term forecasts of economic growth from the IMF/World Bank staff Debt Sustainability Analyses for a panel of countries, we show that the baseline forecasts are more optimistic than warranted by past international growth experience. Further, by comparing the IMF's World Economic Outlook forecasts with actual growth outcomes, we show that optimism bias is greater the longer the forecast horizon.
view the IMF Working-Growth: Now and Forever?
Source: IMF
Concern over siloed approaches to collateral
July 2, 2014--While regulation increases collateral needs, particularly as the derivatives market moves toward central clearing, market participants are cobbling together fragmented systems, manual processes, and siloed approaches to ensure compliance, creating significant inefficiencies,says Sapient Global Markets in a recent whitepaper.
A preceding Sapient survey found that only 45% of market participants felt strongly that their institutions have efficient processes for collateral management, particularly in the area of communication and dispute management.
Source: Thetradenews.com
