Global ETF News Older than One Year
IMF Working Paper-Procyclical Behavior of Institutional Investors During the Recent Financial Crisis: Causes, Impacts, and Challenges
September 11, 2013--Summary: This paper (i) provides evidence on the procyclical investment behavior of major institutional investors during the global financial crisis; (ii) identifies the main factors that could account for such behavior; (iii) discussses the implications of procyclical behavior; and (iv) proposes a framework for sound investment practices for long-term investors.
Such procyclical investment behavior is understandable and may be considered rational from an individual institution's perspective. However, our main conclusion is that behaving in a manner consistent with longterm investing would lead to better long-term, risk-adjusted returns and, importantly, could lessen the potential adverse effects of the procyclical investment behavior of institutional investors on global financial stability.
Source: IMF
MSCI moves 'beyond BRICs' with new EM index
Index provider unveils newly-weight emerging market benchmark aimed at expanding investment horizons past big four nations.
September 12, 2013--Indexing and investment specialist MSCI has launched a benchmark designed to capture the performance of emerging markets outside of the traditional BRIC nations.
The MSCI EM Beyond BRICs index is comprised of 17 emerging and frontier nations, while excluding China, Russia, Brazil and India.
Source: CityWire
ETF Securities Precious Metals Weekly- US Jobs Disappoint, Precious Metals Eye FOMC
September 9, 2013--China physical demand continues unabated. Precious metals came under pressure last week as the Syria premium receded and stock markets recovered on the back of generally better than expected economic data.
However, following weaker than expected US unemployment data on Friday precious metals prices rebounded. August US unemployment was consistent with the July figure, indicating stagnating employment growth. Despite a decline in the unemployment rate to 7.3%, the labor participation rate declined to 63.2%, the lowest since 1978 and non-farm payrolls remain disappointing. In addition, with the US expected to hit its budget ceiling by mid-October, concern surrounding policy relating to US debt may also help support the gold price. In the background, China's demand for physical gold continues unabated, with demand well ahead of 2012 levels and well on track to hit a record amount in 2013.
Source: ETF Securities
Dow Jones - UBS Commodity Index Market Attributes August 2013
September 9, 2013--KEY HIGHLIGHTS
Except for DJ-UBS Softs, all the sectors posted gains for the month, with the DJ-UBS CI coming in at 3.4%.
The DJ-UBS Precious Metals was the best performing sector in August, up 9.3%.
DJ-UBS Energy was the second-best performing sector, up 3.1% with petroleum up 3.5%.
DJ-UBS Grains rose 2.9% in August, driven by weather conditions and fundamentals, while the DJ-UBS Softs declined 3.3% due to ample crop supplies.
MARKET SNAPSHOT
DJ-UBS CI gained 3.4% in August, but remains off 6.2% YTD. DJ-UBS Energy, which makes up about 38% of the index, rose 3.1%. DJ-UBS Softs finished last, down 3.3%.
Source: S&P Dow Jones Indices
OPEC Monthly Oil Market Report-September 2013
September 9, 2013--Oil Market Highlights
The OPEC Reference Basket averaged $107.52/b in August, representing an increase of $3.07 over the previous month. All Basket component values improved, except Ecuador's Oriente.
Prices were generally supported by tightness in the Brent market. The Basket's year-to-date value stood at $105.32/b, a decline of $4.81 or 4.8% from the same period last year. In August, international crude oil futures soared on both sides of the Atlantic, as a result of seasonal increases in demand, some supply outages, and geopolitical worries. Money managers capitalized on the combination of higher political risks and supply disruptions to push crude prices higher as net length for ICE Brent crude futures and options reached all-time highs. Nymex WTI rose $1.84 to an average of $106.54/b. ICE Brent jumped $3.02 to an average of $110.45/b.
World economic growth forecasts for 2013 and 2014 remain unchanged at 2.9% and 3.5%, respectively.
view the OPEC Monthly Oil Market Report-September 2013
Source: OPEC
IMF Working paper-Shock from Graying: Is the Demographic Shift Weakening Monetary Policy Effectiveness
September 6, 2013--Summary: Abstract Empirical evidence is mounting that, in advanced economies, changes in monetary policy have a more benign impact on the economy-given better anchored inflation expectations and inflation being less responsive to variation in unemployment-compared to the past.
We examine another aspect that could explain this empirical finding, namely the demographic shift to an older society. The paper first clarifies potential transmission channels that could explain why monetary policy effectiveness may moderate in graying societies. It then uses Bayesian estimation techniques for the U.S., Canada, Japan, U.K., and Germany to confirm a weakening of monetary policy effectiveness over time with regards to unemployment and inflation. After proving the existence of a panel co-integration relationship between ageing and a weakening of monetary policy, the study uses dynamic panel OLS techniques to attribute this weakening of monetary policy effectiveness to demographic changes. The paper concludes with policy implications.
Source: IMF
Leaders endorse new G20/OECD principles on long-term investment financing
September 6, 2013--G20 Leaders today endorsed a new global initiative to encourage the flow of institutional investment towards longer-term assets, such as infrastructure and renewable energy projects, in order to strengthen the global economy and deliver more sustainable growth
Currently, pension funds, insurers, mutual funds and sovereign wealth funds hold more than USD 80 trillion in assets. Pension funds alone managed over USD 20 trillion in assets as of the end of 2012, with a net annual inflow of savings of over $1 trillion. But only 1% of those assets were invested in infrastructure projects, with an even smaller fraction in clean energy projects.
view the G20/OECD High-level Principles of Long-term Investment Financing by Institutional Investors
Source: OECD
Fierce battle for assets continues
September 6, 2013--When it comes to exploring the intricacies of the exchange traded fund industry, it is all too easy to get bogged down in the details of who is winning and who is losing market share.
At first glance, the data for 2013 paint a similar picture to previous years, revealing iShares as the provider flexing the most muscle in terms of ETF assets globally with over $820bn, according to figures from ETFGI, a consultancy that monitors trends in the industry.
Source: FT.com
ETFs: time to call the plumbers?
September 6, 2013--Exchange traded funds are driving a revolution in financial markets and the pace of change is accelerating.
But as ETFs become increasingly popular, more questions are being asked about their risks. Critics cite a number of recent difficulties in trading ETFs as evidence that problems in the industry's "plumbing" systems flare up in periods of market stress.
Source: FT.com
STOXX Announces New Composition of Sustainability, ESG and Style Indices
Results of the Review to be Effective on September 23, 2013
September 6, 2013--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today announced the results of the annual review of the STOXX Sustainability, STOXX Global ESG Leaders, STOXX Strong Style and STOXX Balkan 50 Equal-Weight indices; as well as those of the semi-annual review of the STOXX TMI Growth, STOXX TMI Value and their respective large, mid-and small sub,indices and the respective indices for the euro zone.
All changes will be effective on September 23, 2013.
Source: STOXX
