Global ETF News Older than One Year
FTSE launches risk-focused index series
September 18, 2013--FTSE Group has launch a new index series designed to track the performance of baskets of securities weighted so that each security contributes equally to overall portfolio risk.
The new offering, dubbed the FTSE Global Equal Risk Contribution (ERC) Index Series, will fit within the index provider's range of alternative indices, which create new opportunities for market participants who seek to change the relationship between constituent price and index weight, reduce concentration in individual sectors or securities, reduce volatility, diversify beta, improve risk/reward trade-offs and time market events.
Source: FTSE Global
Economic Freedom of the World: 2013 Annual Report
September 18, 2013--Hong Kong again topped the rankings of 151 countries and territories, followed by Singapore, New Zealand, and Switzerland in the Fraser Institute's annual Economic Freedom of the World report.
The United States, once considered a bastion of economic freedom, now ranks 17th in the world.
"Unfortunately for the United States, we’ve seen overspending, weakening rule of law, and regulatory overkill on the part of the U.S. government, causing its economic freedom score to plummet in recent years. This is a stark contrast from 2000, when the U.S. was considered one of the most economically free nations and ranked second globally," said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute.
view the Economic Freedom of the World Annual Report 2013
Source: Economic Freedom Network
Invesco PowerShares picks managing director of global ETFs
September 18, 2013--Dan Draper was named managing director of global ETFs at Invesco (IVZ) PowerShares Capital Management, a spokesman confirmed.
Mr. Draper replaces Ben Fulton, who left PowerShares in April, although some of Mr. Fulton's responsibilities were assumed by Andrew Schlossberg, head of U.S. retail distribution and global ETFs. Mr. Draper reports to Mr. Schlossberg.
Source: Pensions & Investments
Natixis 2013 Global Survey of Individual Investors
September 17, 2013--The fourth annual Natixis Global Asset Management (NGAM) Individual Investor Survey provides valuable insights into the needs, goals and thinking of investors around the world.
NGAM's 2013 individual investor research study is based on fieldwork conducted in 14 countries throughout the Americas, Europe, Asia and the Middle East. Interviews were conducted online in June-July 2013 with 5,650 investors having assets of 200K+ (USD).
view the 2013 Global Survey of Individual Investors- Risk, return and the investor information gap
Source: Natixis Global Asset Management (NGAM)
Mirae Asset -EM to See the End of US QE
Global markets were volatile in August and suffered from renewed selling.
September 16, 2013--China
Macro indicators were better than expected.
The Chinese market was very volatile in August, but managed to sustain its upward trend.
While the Chinese market,outperformed emerging markets overall, China still posted net outflows from global investors.
Most sectors recorded positive returns, led by materials. On the other hand, underperformers included utilities and health care.
India's economy sees a slowing growth.
The MSCI India Index fell sharply in August. Since talk of QE tapering in the US began, chronic problems in the Indian macro economy, including the depreciating rupee, widening current account and fiscal deficits, and rising inflation, have led to increased concern.
The Indian rupee has been among the worst performing currencies of late, depreciating nearly 20% in the last three months; however, losses were pared toward the end of August as the RBI announced a separate foreign exchange window for state-owned oil companies, its latest measure to reduce volatility in the currency market.
ASEAN
Philippines remain the most favorable.
Indonesia's economy continues to suffer from a widening current account deficit and depreciating currency. In the second quarter, the current account deficit expanded to 4.4% of GDP, the highest level since the Asian crisis in 1997.
In Thailand, GDP growth declined to 2.8% year-over-year in the second quarter on the back of flat export growth, slowing consumer spending, and waning government stimulus. Meanwhile, the consumer confidence index declined to 80.3 in July, indicating that consumers are worried about political uncertainty.
Brazil
Brazil's notable growth led to revise its 2013 output upward.
In August, while the local Bovespa index rose 3.7% in local currency terms, the MSCI Brazil Index fell 2.1% in US currency terms as the Brazilian real depreciated sharply against the US dollar.
Profit-taking in anticipation of the US QE tapering has resulted in significant pressure on emerging market currencies, including the real, with the unwinding of cross-border carry trades playing a significant role.
Russia
Russia outperformed EM overall.
The Russian market outperformed emerging markets overall, due to spiking oil prices caused by rising tensions in the Middle East. Additionally, as Russia remains at a nearly record dis-count to emerging market equities, investors sold off other markets trading at more expensive multiples.
Eastern Europe overall performed in line with emerging markets; however, performance in the region varied. Poland and the Czech Republic posted positive performance as greater optimism for a European economic recovery lifted both markets.
Source: Mirae Asset Financial Group
ETF Securities Precious Metals Weekly-Palladium Holds Up as Investors Focus on Recovering Industrial Demand
September 16, 2013--Gold under pressure as Syria military attack averted and investors focus
on possible Fed tapering. Precious metals declined last week as concerns about an imminent attack on Syria by the US abated and investors continued to focus on the possible announcement of a reduction in Fed bond buying this week.
Palladium was the only precious metal to hold up, as improving global economic conditions and continued strong auto sales lend support. In our view, once the market has put FOMC tapering clarification in the rear view mirror, the focus will likely focus on other issues. Some of these issues include the need to raise the US debt ceiling in the next month or so or face government shut-down, continued upheaval in the Middle East and the Fed's need to keep bond yield increases in check given its large debt servicing burden. All of these factors should be gold price supportive. On top of these factors, China and central bank physical gold demand remains robust and gold jewellery recycling has dropped sharply, tightening the physical supply-demand balance (as reflected in low to negative gold forward rates). These factors should help to keep a floor on the gold price. And any sign of slower growth in the US or of Fed dovishness in the coming months has the potential to push the gold price higher. A key potential beneficiary of a stable gold price and rising industrial growth is silver.
Source: ETF Securities
IMF Policy paper-Key Aspects of Macroprudential Policy
September 16, 2013--The IMF Policy paper-Key Aspects of Macroprudential Policy has been released.
Summary: The crisis has underscored the costs of systemic instability at both the national and the global levels and highlighted the need for dedicated macroprudential policies to achieve financial stability.
Building on recent advances, this paper provides a framework to inform the IMF's country-specific advice on macroprudential policy. It recognizes that developing macroprudential policy is a work in progress, and addresses key issues to help ensure its effectiveness.
view the IMF Policy paper-Key Aspects of Macroprudential Policy
Source: IMF
IMF Research Bulletin-September 2013
September 16, 2013--The IMF Research Bulletin-September 2013 is now available.
view the IMF Research Bulletin-September 2013
Source: IMF
When market movers are the index makers
Investors have outsourced much power to the index providers
September 15, 2013--Who has the power to move markets? Often some unlikely candidates.
As everyone learnt during the global financial crisis, rating agencies had been given too much power.
This was the side-effect of regulations that placed limits on the bonds that banks or fund managers could hold, based on their ratings. The result was to outsource due diligence to the agencies. This put far more weight on the opinion of one or two analysts than they were ever designed to bear....
Source: FT.com
BIS September 2013 Quarterly Review: Markets precipitate tightening
September 15, 2013--Higher yields in advanced economies generated serious tremors in emerging markets.
Cross-border claims of BIS reporting banks were broadly stable in the first quarter of 2013, Banks redirected lending from the advanced economies to emerging markets, especially to China, Brazil and Russia.
Japanese banks returned as the world's largest providers of cross-border credit, a position they had lost in the aftermath of the crisis in the 1990s.
Corporations from emerging markets have overtaken firms from the advanced economies as the largest group of issuers of corporate debt securities in offshore financial centres.
Benjamin Cohen (BIS) finds that large banks raised their capital ratios mainly by increasing retained earnings rather than by reducing their assets or loan books.
view the BIS Quarterly Review, September 2013
Source: BIS
