Global ETF News Older than One Year
Risk management guidelines related to anti-money laundering and terrorist financing issued by the Basel Committee
January 15, 2014--The Basel Committee on Banking Supervision has today issued a set of guidelines to describe how banks should include the management of risks related to money laundering and financing of terrorism within their overall risk management framework.
Prudent management of these risks together with effective supervisory oversight is critical in protecting the safety and soundness of banks as well as the integrity of the financial system. Failure to manage these vulnerabilities exposes banks to serious reputational, operational, compliance and other risks.
view the BIS report-Sound management of risks related to money laundering and financing of terrorism
Source: BIS
Trust in Government Plunges to Historic Low
Business Trust Stabilizes, Creating Largest Gap Ever Between Trust in Government and Business
January 15, 2014--The 2014 Edelman Trust Barometer reveals the largest ever gap (14 points) between trust in government and business. Driven by the decimation of trust in government and not an increase in business trust, the gap was 20 points or greater
in nearly half of the 27 countries surveyed, including the U.S. (21 points), India (26 points) and Brazil (36 points). Trust in business has stabilized at 58 percent due to the perception that it has made demonstrable change in the form of better products and new leadership.
Trust in government fell globally four points to an historic low (44 percent) making it the least trusted institution for the third consecutive year. The drop in government trust among informed publics was even more dramatic on a country level, plummeting in the U.S. (16 points to 37 percent), France (17 points to 32 percent) and Hong Kong (18 points to 45 percent). Populist sentiment is evident in the fact that among the general population trust in government is below 50 percent in 22 of the 27 countries surveyed, with strikingly low levels in Western Europe, particularly in Spain (14 percent), Italy (18 percent) and France (20 percent).
view the 2014 Edelman Trust Barometer
Source: Edelman
DB-Synthetic Equity & Index Strategy-Global-ETF Annual Review & Outlook -Eyeing $3 trillion Assets Milestone in 2014
January 15, 2014--Data in this report is as of 31st December 2013
Global ETF assets up by 28% and beyond the $2.2 trillion mark in 2013
Global ETF assets grew to $2.25 trillion during 2013 registering over 28% YoY growth. Out of the total growth,new cash flows contributed 14.7% (+$259bn),while the remaining 13.5% came from asset price increases. Global growth was led by the US ETF market that saw record inflows of $214bn in 2013.
The US,Europe,Asia-Pac,and RoW regional ETF assets closed the year at $1.61 trillion (+33%),$397bn (+19%),$167bn (+24%),and $75bn (+2%),respectively. Global ETP assets grew by 22% to $2.34 trillion last year.
ETF trading activity up 10% in 2013 reaching $15.7 trillion globally
Trading activity picked up in 2013 with ETF turnover levels registering a rise of 9.5% over 2012. Overall,annual ETF turnover in 2013 and 2012 have been $15.7 trillion and $14.3 trillion respectively. In 2013,Asian ETFs recorded the highest increase of 103% in trading volumes ($654bn),surpassing European on-exchange volumes ($601bn,up 9.5%). US ETFs continue to dominate the global ETF trading activity ($14 trillion,up 7.7%).
ETP flows suggest investors feel confident with risky assets
The observed global ETP flow trends in 2013 suggest that investors preferred risky assets. Among these,Developed Market (DM) equities were the largest beneficiary as many DM countries started showing signs of recovery. Within the equity asset class,the US (+$144.6bn),DM Broad (+$53.3bn),Japan (+$37.4bn),Domestic Cyclicals (+$31.2bn),and Financials (+$13.3bn) were favored by investors while in the fixed income space,Corporates (+$15.4bn) dominated ETF flows. The commodity asset class remained challenged as we saw continued outflows from Gold ETPs (-$40.5bn) in 2013.
We expect many of the 2013 investment trends to continue into 2014. More specifically, we anticipate equities to attract the bulk of the inflows; while fixed income should have another year of mild inflows. For commodities we expect another weak year,but with smaller outflows than last year. Within equities,DM should remain more popular than EM (except China); but with some reshuffling in terms of geographic allocations (e.g. US and Japan becoming less attractive,and Europe becoming more). Fixed Income allocations should remain focused on the High Yield and the Short Duration space.
ETF markets continue to grow fast globally
In the US,ETFs beat Mutual Funds in the race for assets in their home turf. In a year with low volatility levels and lower pair wise correlations which are supposed to benefit active management,ETFs grew faster and gathered more new net assets than Mutual Funds both within equity and fixed income products. As a result many traditional asset managers are implementing or fine-tuning their entry strategies into the ETF industry.
Source: Deutsche Bank-Synthetic Equity & Index Strategy-Global
Global Economy at Turning Point, Says World Bank
January 14, 2014-- The world economy is projected to strengthen this year, with growth picking up in developing countries and high-income economies appearing to be finally turning the corner five years after the global financial crisis, says the World Bank's newly-released Global Economic Prospects (GEP) report.
The firming of growth in developing countries is being bolstered by an acceleration in high-income countries and continued strong growth in China.
However, growth prospects remain vulnerable to headwinds from rising global interest rates and potential volatility in capital flows, as the United States Federal Reserve Bank begins withdrawing its massive monetary stimulus.
Source: World Bank
Global ETF and ETP assets reached US$2.4 trillion, a new record high, at the end of 2013
January 13, 2014--US$24.5 billion net inflows in December and positive market performance pushed assets in the global ETF/ETP industry to a new record high of US$2.4 trillion at year-end 2013, according to preliminary findings from ETFGI's global ETF and ETP industry insights report.
The global ETF/ETP industry had 5,090 ETFs/ETPs, with 10,172 listings, from 218 providers on 60 exchanges at the end of 2013.
"After spending most of 2013 wondering when and how the Fed would taper its QE scheme, investors felt a degree of positive cheer and certainty after the Fed announced in December that the US economy was strong enough for it to begin to taper by US$10 billion in January 2014" according to Deborah Fuhr, Managing Partner at ETFGI.
Source: ETFGI
Q4 Performance Results for Dow Jones Islamic Market Indices and S&P Shariah-Indices Shariah Report-Q4 2013
January 13, 2014--Some fourth-quarter 2013 highlights from the Shariah Report include:
Our major Shariah-compliant benchmarks covering MENA, the U.S. and global equities performed in line with conventional indices in 2013 as the Dow Jones Islamic Market World Index, S&P Pan Arab Composite Shariah and S&P 500 Shariah each closed the year within 200 bps of their non-Shariah counterparts.
The S&P Pan Arab Composite Shariah gained 21.2% in 2013, which is roughly in-line with the 21.7% return of its non-Shariah counterpart.
The U.A.E. was 2013’s star performer as the S&P UAE Shariah Index gained more than 100% for the year.
Source:S&P Dow Jones Indices LLC
ETFS Precious Metals Weekly-Gold Greets 2014 and Tapering Enthusiastically Potentially Forming a Double Bottom at $1,200
January 13, 2014--Precious metals ring in the new year with a rally. Precious metals ended the
first full week of the 2014 year on a strong note, boosted by the disappointing
December US employment data on Friday.
Year-to-date, platinum has been the stalwart with a 5.0% gain, just ahead of the 3.4% increase in gold, which ended the week at US$1,244/oz. (London PM fix). Gold may be carving out a double bottom near the US$/1,200 level, supported by strong physical demand, notably from Asia. Indicative of strong physical demand, gold one month forward rates (GOFO) remain negative (see chart below). At the end of 2013 when the December futures contract expired, the gold futures curve was in backwardation, another indication of strong physical demand. In contrast to a year ago, after the strong tailwinds coming from the global economic rebound in 2013, analyst consensus expectations for 2014 are strongly in favour of continued depreciation in gold prices and appreciation in equity prices.
Source: ETF Securities
ETFGI: iShares edges out Vanguard for top ETF flows in 2013
January 13, 2014--lackRock (BLK)'s iShares topped the ETF net inflow rankings in 2013 with $61 billion, according to a report from research and consultancy firm ETFGI.
The net inflows of iShares narrowly beat out Vanguard's inflows of $60.2 billion. State Street Global Advisors' set of ETFs, SPDR, finished third with $18.3 billion, while PowerShares took fourth place with $15.4 billion.
Source: Pensions & Investmenst
Vanguard smashes world record for inflows
January 12, 2014--Vanguard broke the world record for asset gathering by an investment house for the second successive year in 2013.
Net inflows into its funds reached $150bn globally last year, according to preliminary data from the world's third-largest manager by assets, aided by rising non-US demand for its low-cost funds.
Source: FT.com
Work on the Liquidity Coverage Ratio finalised by the Basel Committee
January 12, 2013--In January 2013, the Basel Committee's oversight body, the Group of Governors and Heads of Supervision (GHOS), agreed the final form of Basel III's Liquidity Coverage Ratio (LCR).
At that time, the GHOS asked the Committee to undertake some additional work on liquidity disclosure, the use of market-based indicators of liquidity within the regulatory framework, and the interaction between the LCR and the provision of central bank facilities. The Committee has completed this work, and has today published a package of material that responds to these requests.
view the Liquidity coverage ratio disclosure standards
Source: BIS
