Global ETF News Older than One Year
IMF Working paper-Fiscal Limits, External Debt, and Fiscal Policy in Developing Countries
March 31, 2014--Summary: This paper studies fiscal policy effects in developing countries with external debt and sovereign default risks. State-dependent distributions of fiscal limits are simulated based on macroeconomic uncertainty and fiscal policy specifications. The analysis shows that expected future revenue plays an important role in the low fiscal limits of developing countries, relative to those of developed countries.
External debt carries additional risks since large devaluation of the real exchange rate can suddenly raise default probabilities. Consistent with majority views, fiscal consolidations are counterproductive in the short and medium runs. When an economy approaches its fiscal limits, government spending can be less expansionary than in a low-debt state. As more revenue is required to service debt in a high-debt state, higher tax rates raise the economic cost of increasing consumption, reducing the fiscal multiplier.
view the IMF Working paper-Fiscal Limits, External Debt, and Fiscal Policy in Developing Countries
Source: IMF
ICE Splits NYSE Liffe, Euronext Feeds
March 28, 2014--NYSE Euronext has introduced a new commercial model for real-time data from its Liffe derivatives market that will see London-listed derivatives unbundled from continental European derivatives, as a result of ongoing plans to spin off Euronext's European cash and derivatives markets following IntercontinentalExchange's acquisition of NYSE Euronext last year.
Effective April 1, London-listed derivatives data will move to ICE under a new package dubbed Liffe...
Source: Waters Technology
BNY Mellon Automates Calculation of Collateral Requirements in ETF Marketplace
Designed to Lead to More Efficient, Reliable Market
March 27, 2014--BNY Mellon, a global leader in investment management and investment services, has automated the calculation of collateral requirements in the exchange-traded funds (ETF) marketplace.
The BNY Mellon enhancement is designed to reduce errors in ETF transactions and improve the ability of Authorized Participants (APs) to manage and allocate funds.
The primary market in ETFs is driven by APs which are large financial institutions/broker dealers that trade the underlying securities during the creation or redemption of ETF units.
Source: BNY Mellon
Standard Life Investments buys fund manager Ignis for 390m pounds
March 26, 2014--Standard Life Investments, the Edinburgh-based pensions and insurance firm, has bought Ignis Asset Management from life assurer Phoenix Group.
The company paid £390m for Ignis and says the deal will mean its assets under management will increase by more than 30% to £240bn.
Source: BBC.com
Advisers turn to ETFs to drive down costs
March 25, 2014--Some financial advisers are using exchange traded funds (ETFs) heavily in client portfolios, drawn to the low-cost structure, intraday trading and tax benefits.
In fact, 16.5 per cent, or 66 of the top 400 advisers surveyed by the Financial Times, allocate 20 per cent or more of their overall assets under management (AUM) to ETFs.
Source: FT.com
Matteo Andreetto joins STOXX Limited as Global Head Of Sales
March 20, 2014--STOXX Limited, a leading provider of innovative, tradable and global index concepts, today announced that Matteo Andreetto has joined the company as global head of sales, effective immediately.
"Matteo brings a wealth of experience in global capital markets-both on the sell- and buy-side, to STOXX, which will be hugely beneficial for the company. We are enthusiastic to have him join STOXX," said Hartmut Graf, chief executive officer, STOXX Limited. "I am confident that Matteo will contribute to STOXX’s global success, and that he will be a valuable asset to our team."
Source: STOXX
Gold mining ETF outshines SPDR Gold Trust as haven bet
The Market Vectors Gold Miners ETF rose 25% this year, more than double the 12% advance for the SPDR Gold Trust, the biggest gold ETF.
March 19, 2014--Investors seeking a hedge against a waning U.S. economic recovery and escalating conflict in Ukraine made twice as much money buying gold-mining shares rather than the metal the companies produce.
The Market Vectors Gold Miners ETF climbed 25 percent this year, more than double the 12 percent advance for the SPDR Gold Trust, the biggest exchange-traded product backed by bullion. This is the first quarter the company fund is outperforming the metal ETF since 2012. Assets in the producer fund expanded 6 percent in the past four weeks, compared with a 2.7 percent gain for the Gold Trust, data compiled by Bloomberg show.
Source: MineWeb
STOXX introduces STOXX Japan Strong Balance Sheet Indices
March 19, 2014--STOXX Limited, a leading provider of innovative, tradable and global index concepts, today introduced the STOXX Japan Strong Balance Sheet Indices, which select stocks according to their Altman Z-Score, a quantitative measure for the financial and fundamental health of a company. The new indices are designed to act as an underlying for exchange-traded products (ETPs) and other investable products, as well as benchmarks for actively managed funds.
Furthermore, they can be replicated passively.
The STOXX Japan Strong Balance Sheet Indices are the first indices to use the Altman Z-Score as a selection criteria for an index concept in the Japanese region.
"The Altman Z-Score is an established mathematical measure to determine a company's financial health. Research has shown that high Altman Z-Scores can serve both as indicator of downturn resilience as well as of outperformance within a market overall," said Hartmut Graf, chief executive office, STOXX Limited.
Source: STOXX
Urgent action needed to tackle rising inequality and social divisions, says OECD
March 18, 2014--Income inequality and social divisions could worsen and become entrenched unless governments act quickly to boost support for the most vulnerable in society, according to a new OECD report.
Society at a Glance 2014 says that despite a gradually improving global economy, medium-term fiscal consolidation in many countries will pose challenges for tackling the social fallout from the crisis.
Public spending on disability, family and unemployment benefits rose during the early phases of the crisis but these areas are now under pressure. Coverage has also been a challenge: while social protection programmes helped soften the blow for many people, others were left with little or no support, notably in southern Europe.
view Society at a Glance 2014 OECD Social Indicators-The crisis and its aftermath
Source: OECD
ETF Securities-Precious Metals Weekly-Does Gold/Copper Ratio Point to Market Correction Ahead?
March 17, 2014--Gold rallies and equities fall as Russia-Ukraine crisis intensifies. Sentiment towards the
gold price continued to improve last week with the gold price rallying 3.7%, for a year-to-date
gain of 15.1%, significantly outperforming global equities.
In direct contrast to 2013, investors have started to build positions in gold again as reflected in a pickup in gold ETP buying and increased longs in the futures market.
n recent weeks, short positions have quickly reversed, as emerging market jitters, Russia's take-over of the Crimea and weakerthan- expected data releases from the US and China have reminded investors that a straightline global economic recovery is far from certain. With political and market turbulence again highlighting the benefits of gold as an insurance asset and one of the better hedges against negative risk events, gold appears to be regaining its lustre after a difficult 2013. Does the gold/copper ratio indicate consensus global growth scenarios need to be scaled back? Higher stock prices, strong economic growth (notably in the US), higher bond yields, a stronger US dollar and lower gold prices were some of the key consensus expectations at the beginning of 2014. As we near the end of Q1, investors are beginning to question many of these 'slam dunk' views. Weaker than expected US and China economic data and the growing Russia-Ukraine crisis appear to have changed investor risk perceptions. More recently a China corporate bond default has raised concerns about a possible unwinding of copper collateralised financing deals. The combination of these factors has driven the copper/gold ratio, sometimes viewed as a leading global economic indicator, sharply lower (see chart below). The question now is whether continued strong consensus global growth forecasts are now going to need to be scaled back.
Source: ETF Securities
