Global ETF News Older than One Year
Australia to receive go-ahead for CFTC substituted compliance
December 18, 2013--Australian market will broadly be able to follow domestic rules to comply with Dodd-Frank
The Commodity Futures Trading Commission (CFTC) is set to grant Australia a positive substituted compliance determination across several key areas that will allow Australian firms to follow local rules in order to comply with the Dodd-Frank Act.
Source: Risk.net
Second report on the regulatory consistency of risk-weighted assets in the trading book issued by the Basel Committee
December 17, 2013--December 17, 2013--The Basel Committee on Banking Supervision has today published its second report on the regulatory consistency of risk-weighted assets (RWAs) for market risk in the trading book. This study is a part of its wider Regulatory Consistency Assessment Programme (RCAP), which is intended to ensure consistent implementation of the Basel III framework.
Today's report, which follows up on an initial study conducted by the Committee that was published in January 2013, extended that earlier analysis to more representative and complex trading positions. Consistent with the findings in the first report, the results show significant variation in the outputs of market risk internal models used to calculate regulatory capital. In addition, the results show that variability typically increases for more complex trading positions.
view the RCAP-Analysis of risk-weighted assets for market risk in the trading book
Source: BIS
SSgA-Global ETF Snapshot-November 2013
December 17, 2013--Highlights ETF Industry Detail
GLOBAL ETF LISTING REGION
The United States had nearly $12.5BN of inflows in the month November, increasing its year to date inflows to $163.8BN. Europe experienced inflows of $3.3BN in November, increasing its year to date inflows to $16.8BN, while APAC had outflows of $0.2BN, decreasing its year-to-date inflows to $12.5BN.
GLOBAL PERFORMANCE BY ASSET CLASS
MSCI AC World IMI increased 1.4%, while MSCI EAFE gained 0.8%. Emerging markets lost 1.5%, while Emerging Markets Small Cap dropped 1.9%. US Large Cap, Mid Cap and Small Cap markets were all positive, increasing 3.0%, 1.3% and 4.5%, respectively. The Global Aggregate fell 0.8% and the Global Treasury Ex US decreased 1.5%. The US Aggregate, the US Treasury and the US Corporate Bond markets were all slightly negative, while the US High Yield market was slightly positive in November. The US REIT market was down 5.5%. Commodities were negative, with the Dow Jones-UBS Commodity Index losing 0.8% and Gold dropping 5.4%.
Global Flows
GLOBAL ETF FLOWS BY ASSET CLASS
Global ETF inflows approached $14.3BN in November. Equity had inflows of $16.2BN. The equity inflows were driven by developed large cap equity, with $10.3BN in inflows, and developed large & mid cap equity, with $5.3BN in inflows. Commodity had outflows of $2.3BN, which were driven by outflows of $1.7BN from precious metals.
For more information, including product fact sheets and related whitepapers, visit spdrs.com.
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Source: Source:SSgA
S&P Dow Jones Indices Recaps 2013 Equity Market Performance
In Europe, Asia, and Emerging Markets; Casts an Eye Toward 2014
December 17, 2013--S&P Dow Jones Indices, one of the world's largest providers of financial market indices, has today published a review of equity market
performance and indexing trends in Europe, Asia and the emerging markets in 2013 while seeking to identify those trends and events that could impact performance in 2014.
Source: ETFIAsia.com
Impact Investing: Innovative Strategies for Double Bottom Line
New report on impact investing offers solutions on portfolio construction, fund governance and innovative financial instruments
Evidence suggests incorporating environmental, social and corporate governance criteria in the investment process enhances long-term risk-adjusted financial returns
15 leading practitioners from insurance companies, pension funds, asset management firms, impact investing funds, development finance institutions and research institutions contributed their expertise and insights
December 17, 2013--The World Economic Forum released today From Ideas to Practice, Pilots to Strategy: Practical Solutions and Actionable Insights on How to Do Impact Investing providing investors, philanthropists and other professionals with actionable insights of how to incorporate impact investing into their work.
Impact investing - an investment approach intentionally seeking to create both financial return and positive social impact that is actively measured- has been lauded as an emerging investment approach with the potential to reconcile key shortcomings in traditional financial markets
Source: WEF (World Economic Forum)
DM Gains, While EM Lags Behind
Global market generally continued their upward trend after three consecutive months of outperformance.
December 17, 2013--Chinese market reacted positively to the substantive reforms.
After posting relatively flat returns since August, the Chinese market rebounded in November, driven by the reform announcement from the Chinese Communist Party's Third Plenum session.
The market reacted positively to the reforms that came out of the Third Plenum session, particularly those related to deregulation and the adoption of more market mechanisms in economic operations.
India-The macro environment generally reflected improvement.
The Indian market corrected with the MSCI India Index falling 2.6% in US dollar terms in November,, following the sharp rally over the previous two months.
The rupee stabilized against the US dollar, as the Reserve Bank of India’s (RBI's) US dollar deposit scheme raised nearly $33 billion from the Indian diaspora, or Indian non-residents.
The ASEAN markets underperformed due to macro and political factors.
In the Philippines, market sentiment turned negative following Typhoon Haiyan at the beginning of the month.
Thailand experienced a large foreign investor sell-off due to political protests in response to the amnesty bill. In particular, travel and leisure-related stocks, which account for a high proportion of the Thai market, declined sharply.
The Brazilian market is out of favor due to its weak growth outlook.
Brazilian equities fell 6.6% in US dollar terms in November as the country's deteriorating fiscal balance points to a weaker currency and consequently higher inflationary pressure in 2014.
Additionally, the Brazilian market is out of favor with investors both regionally and globally due to its weak growth outlook for 2014.
Europe, the Middle East, and Africa underperformed emerging markets.
The MSCI Russia Index fell 5.3% in November. After rallying over recent months, the Russian market declined due to weaker-than-expected third-quarter GDP growth of 1.2% year-over-year.
The Eastern European region as a whole also declined. Russia, Turkey, Hungary and the Czech Republic also posted weak performance. Poland was the region’s sole positive performer as optimism of economic growth acceleration in 2014 lifted the market.
Source: Mirae Asset Financial Group
IMF Working paper-The Redistributive Effects of Financial Deregulation
December 17, 2013--Summary: Financial regulation is often framed as a question of economic efficiency. This paper, by contrast, puts the distributive implications of financial regulation center stage. We develop a model in which the financial sector benefits from risk-taking by earning greater expected returns. However, risktaking also increases the incidence of large losses that lead to credit crunches and impose negative externalities on the real economy.
We describe a Pareto frontier along which different levels of risktaking map into different levels of welfare for the two parties. A regulator has to trade off efficiency in the financial sector, which is aided by deregulation, against efficiency in the real economy, which is aided by tighter regulation and a more stable supply of credit. We also show that financial innovation, asymmetric compensation schemes, concentration in the banking system, and bailout expectations enable or encourage greater risk-taking and allocate greater surplus to the financial sector at the expense of the rest of the economy.
view IMF Working paper-The Redistributive Effects of Financial Deregulation
Source: IMF
Commodity funds head for record outflow
December 17, 2013--Commodity-linked investment funds are headed for record outflows in 2013, with an $88bn decline in assets under management in the year to November, according to a Barclays report.
Investors have withdrawn a net $36.3bn from commodity funds this year -also a record- as prices fell across the market, from coffee to nickel. The bulk of the sell-off came through gold exchange traded funds (ETFs), as the decade-long bull run for the yellow metal ended, with prices falling 26 per cent this year.
Source: FT.com
ETFS Precious Metals Weekly-Gold Treads Water Ahead of the FOMC meeting
December 16, 2013--Some tapering clarity is expected this week. Precious metals marked time last week in anticipation of this week's FOMC meeting as most US economic data
continued to surprise on the upside. The key exception has been inflation though, with the PPI reading coming in at only 0.7% in November and market
expectations of only 1.3% for tomorrow's CPI release.
With inflation remaining so tame, the urgency in tapering the Fed's bond buying programme remains elusive. However some investors saw the budgetary compromise approved by the House of Representatives as a reason for the Fed not to wait till 2014 to taper. Gold remained generally under pressure, with a large short base and backwardation in the futures market giving rise to negative GOFO rates. Some investors are harvesting loses for tax reasons following the first down year in 13 years, which has added volatility to the market.
Source: ETF Securities
Asset managers under fire
December 16, 2013--The European Parliament has voted in favour of proposals that could lead to large asset managers being classified as "systemically important", a move that would subject them to tighter regulations and require costly changes to their operating models.
US regulators are also currently considering whether large asset managers should be subject to stricter rules as systemically important financial institutions, or SIFIs.
Source: FT.com
