Global ETF News Older than One Year
Net growth in ETF numbers almost doubles to a record 1,239 last year
January 17, 2022--Robust markets limit fund closures and spur optimism in new launches
The global exchange traded fund industry not only attracted record inflows it also racked up extraordinary growth in the breadth and depth of its offering last year.
An overall total of 1,503 ETFs and exchange traded commodities were launched, far ahead of the previous record of 873 recorded in 2018, according to data from Morningstar.
Source: ft.com
Nearly half of City GDP at Risk of Disruption from Nature Loss, New Report Finds
January 16, 2022-Nearly half of City GDP at Risk of Disruption from Nature Loss, New Report Finds
Cities can take a leading role in unlocking economic opportunities with Nature-based Solutions
44% of GDP in cities around the world -$31 trillion- is at risk of disruption from nature loss
A new roadmap to help cities adopt Nature-based Solutions for urban infrastructure to optimise spend and supercharge sustainable growth
Climate-resilient infrastructure can create 59 million jobs and can mitigate growing risks from extreme weather
Cities contribute 80% to global GDP-but they also account for 75% of global greenhouse gas emissions. Integrating nature-positive solutions can help protect cities from growing risks associated with extreme weather while driving sustainable economic growth.
In collaboration with the Alexander von Humboldt Institute and Government of Colombia, the World Economic Forum's BiodiverCities by 2030 Initiative published a report addressing the urgency of cities' untenable relationship with nature. The Initiative's goal is to reverse this existential global threat and move forward with a plan that will result in cities and nature co-existing in harmony by the end of the decade.
Source: WEF (World Economic Forum)
BlackRock hits $10tn in AUM driven by strong Q4 inflows
January 14, 2022-BlackRock has become the first asset manager to cross the $10tn mark after the group's 2021 net flows hit a three-year high.
BlackRock has reached the $10tn milestone in assets under management, buoyed by $540bn in total net flows over the course of 2021, according to the firm's latest quarterly earnings report.
Source: citywireusa.com
BlackRock makes cuts to fees on $35bn in bond ETFs
January 13, 2022--Reduction bring charges on the iShares MBS ETF in line with its biggest competitors
BlackRock has shaved fees on two bond ETFs amid strong flows and price competition.
Fees on the $25.5bn iShares MBS ETF dropped 2 basis points to 4 bps, and expenses on the $9.1bn iShares 0-5 Year Tips Bond ETF fell 1 bp to 3 bps, the company said last week.
Source: ft.com
IOSCO consults on lessons learned from the operational resilience of trading venues and market intermediaries during the pandemic
January 13, 2022-- The Board of the International Organization of Securities Commissions (IOSCO) is requesting feedback on the lessons learned regarding the operational resilience of trading venues and market intermediaries during the COVID-19 pandemic.
In the Consultation Report, Operational resilience of trading venues and market intermediaries during the COVID-19 pandemic , published today, IOSCO describes the impact of the pandemic on trading venues and market intermediaries (regulated entities).
It concludes that these regulated entities largely proved to be operationally resilient and continued to serve their clients and the broader economy, despite unprecedented challenges, such as the restrictions on mobility and business operations and periods of extreme market volatility and record trading volumes. The pandemic also increased cyber security risks, accelerated the use of existing, new and emerging technologies and disrupted outsourcing arrangements.
Source: iosco.org
Monetary Finance: Do Not Touch, or Handle with Care?
January 13, 2022--Summary:
This paper reviews the theoretical arguments in favor and against MF and presents an empirical assessment of the risks that it may pose for inflation.
Source: IMF
Crypto Prices Move More in Sync With Stocks, Posing New Risks
January 11, 2022--There's a growing interconnectedness between virtual assets and financial markets.
Crypto assets such as Bitcoin have matured from an obscure asset class with few users to an integral part of the digital asset revolution, raising financial stability concerns.
The market value of these novel assets rose to nearly $3 trillion in November from $620 billion in 2017, on soaring popularity among retail and institutional investors alike, despite high volatility. This week, the combined market capitalization had retreated to about $2 trillion, still representing an almost four-fold increase since 2017.
Amid greater adoption, the correlation of crypto assets with traditional holdings like stocks has increased significantly, which limits their perceived risk diversification benefits and raises the risk of contagion across financial markets, according to new IMF research.
Source: IMF
Global Growth to Slow through 2023, Adding to Risk of 'Hard Landing' in Developing Economies
January 11, 2022--Spread of COVID-19 Variants Alongside Inflation, Debt, and Inequality Intensifies Uncertainty
Following a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from COVID-19 variants and a rise in inflation, debt, and income inequality that could endanger the recovery in emerging and developing economies, according to the World Bank's latest Global Economic Prospects report.
Global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.
The rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term. In addition, a notable deceleration in major economies-including the United States and China-will weigh on external demand in emerging and developing economies.
view the World Bank Global Economic Prospects January 2022 report
Source: worldbank.org
IMF-Global Financial Stability Notes-Cryptic Connections
January 11, 2022--Summary:
Crypto assets have emerged as an increasingly popular asset class among retail and institutional investors. Although initially considered a fringe asset class, their increased adoption across countries-in emerging markets, in particular-amid bouts of extreme price volatility has raised concerns about their potential financial stability implications.
This note examines the extent to which crypto assets have moved to the mainstream by estimating the potential for spillovers between crypto and equity markets in the United States and in emerging markets using daily data on price volatility and returns.
The analysis suggests that crypto and equity markets have become increasingly interconnected across economies over time. Spillovers from price volatility of the oldest and most popular crypto asset, Bitcoin, to the S&P 500 and MSCI emerging markets indices have increased by about 12-16 percentage points since the onset of the COVID-19 pandemic, while those from its returns have increased by about 8-10 percentage points. Spillovers from the most traded stablecoin, Tether, to these indices have also increased by about 4-6 percentage points. In absolute terms, spillovers from Bitcoin to global equity markets are significant, explaining about 14-18 percent of the variation in equity price volatility and 8-10 percent of the variation in equity returns. These findings suggest that close monitoring of crypto asset markets and the adoption of appropriate regulatory policies are warranted to mitigate potential financial stability risks.
Source: IMF
Volatility managed multi-factor portfolios
January 10, 2022-Abstract
This paper shows that portfolio performance can be improved significantly when jointly using volatilities of past factor returns and option-implied market volatilities to determine factor exposures.
Improvements are much larger in risk regimes characterized by option-implied right-skewed and/or high vola market returns. When model parameters are estimated separately for different regimes, risk-adjusted portfolio returns improve even further. The results are not driven by a specific set of factors but also achieved when principal components of a large universe of factors are used as factors. The findings are robust to transaction costs and to out-of-sample estimation.
Source: ssrn.com
