Global ETF News Older than One Year
Macroeconomic impact assessment of OTC derivatives regulatory reforms report issued by the Macroeconomic Assessment Group on Derivatives (MAGD)
August 26, 2013--The Macroeconomic Assessment Group on Derivatives (MAGD) today published a report on the macroeconomic effects of OTC derivatives regulatory reforms.
In this report, the MAGD focuses on the effects of (i) mandatory central clearing of standardised OTC derivatives, (ii) margin requirements for non-centrally cleared OTC derivatives and (iii) bank capital requirements for derivatives-related exposures. In its preferred scenario, the Group found economic benefits worth 0.16% of GDP per year from avoiding financial crises. It also found economic costs of 0.04% of GDP per year from institutions passing on the expense of holding more capital and collateral to the broader economy. This results in net benefits of 0.12% of GDP per year. These are estimates of the long-run consequences of the reforms, which are expected to apply once they have been fully implemented and had their full economic effects.
view the Macroeconomic impact assessment of OTC derivatives regulatory reforms
Source: BIS
Exchange-Traded Funds Lose Faith in Emerging Markets
August 26, 2013--Investors' messy breakup with emerging markets continued last week as year-to-date outflows from dedicated emerging market funds swelled to $5.9 billion, according to data provider EPFR Global.
Exchange-traded funds have emerged as a key driver of outflows from the sector this year.
Source: Wall Street Journal
BATS Global Markets And Direct Edge Agree To Merge
Innovative Companies To Join Forces To Enhance Global Exchange Competition
August 26, 2013--BATS Global Markets, Inc. (BATS) and Direct Edge, LLC (Direct Edge) today announced a definitive merger agreement, which will bring together two customer-focused securities exchange operators under the BATS Global Markets enterprise to drive further innovation and better serve investors.
Financial terms will not be disclosed for the transaction, which is expected to close in the first half of 2014, subject to regulatory approvals. Current BATS CEO Joe Ratterman will remain in the same role and current Direct Edge CEO William O'Brien will be President. Bryan Harkins of Direct Edge will join the combined company as an integral member of the senior executive team.
Source: BATS Global Markets, Inc.
Nasdaq error shows need for unified rules
Markets deal well with outages but unified response is needed
August 23, 2013--It has not been a good week to be a computer.
First, a computer error at Everbright Securities was blamed for a $3.8bn flood of orders on the Shanghai market. Then Goldman Sachs unleashed a rogue algorithm that caused chaos through the options market. And the coup de grâce came when a technical glitch caused Nasdaq to shut for more than three hours.
Source: FT.com
SSgA-US ETF Snapshot:July 2013
August 23, 2013--STATE STREET GLOBAL ADVISORS HIGHLIGHTS, JULY 2013
After The Dust Settles: What's Next for Fixed Income?
o With abnormally low yields over the last few years, investors have been on high alert to the potential impact that an unpleasant end to a 30-plus year bull-run in bonds could have on their portfolios. With US 10-Year Treasury yields rising over 80bps since the end of April, many investors are now feeling the pain. While other asset classes may offer greater potential for risk-adjusted returns in today's market, fixed income can and should remain core to investment portfolios due to its potential for income generation, diversification and capital preservation.
Fortunately, there are opportunities available for savvy investors to create resilient portfolios regardless of how far and fast rates may rise over the rest of the year.
GLOBAL ETF LISTING REGION
The United States had over $42.3BN of inflows in the month of July, increasing its year to date inflows to $114.0BN. Europe experienced inflows of $3.2BN in July, increasing its year to date inflows to $7.1BN. APAC and Canada had minor outflows.
GLOBAL PERFORMANCE BY ASSET CLASS
MSCI AC World IMI increased 4.9%, while MSCI EAFE gained 5.3%. Emerging markets returned 1.0%, while,Emerging Markets Small Cap gained 0.3%. US Large Cap, Mid Cap and Small Cap markets were all positive, returning 5.1%, 6.2% and 6.8%, respectively. The Global Aggregate increased 1.3% and the Global Treasury Ex US added 1.9%. The US High Yield, the US Aggregate and the US Corporate Bond markets were all positive in July. The US REIT market was up 0.8%. Commodities were positive, with the Dow Jones-UBS Commodity Index gaining 1.4% and Gold jumping 10.3%
GLOBAL ETF FLOWS BY ASSET CLASS
Global ETF flows topped $45BN in July. Equity had a leading $41.3BN of inflows. The equity inflows were driven by the developed large cap equity category, which had $18.8BN in inflows. The Commodity asset class had outflows of $2.8BN, most of which came from Precious Metals. Precious Metals has $30.7BN in outflows YTD.
ETF Manager & Fund Detail
The top three families in the Global ETF marketplace were: BlackRock, State Street Global Advisors and Vanguard. Collectively, they account for approximately 71% of the Global ETF market.
visit www.spdrs.com for complete report
Source: SSgA
EPFR Global News Release-Thaw continues for Europe funds but US Equity Funds see biggest outflow since 2Q08
August 23, 2013--With the yield on 10-year US Treasuries making a run at the 3% level in anticipation of the beginning of the end for the Federal Reserve's QE3 program, investors pulled nearly $20 billion out of EPFR Global-tracked US Equity and Bond Funds during the third week of August.
Expectations that the Fed will start winding down its bond buying program at some point in the next two months also kept the pressure on Emerging Markets Bond and Equity Funds while redemptions from US Financial Sector Funds climbed to their highest level since late 1Q09.
Although the outflows from US Equity Funds were the highest in over five years, the overall figure of $12.3 billion for all Equity Funds was tempered by another week of solid inflows for Europe Equity Funds as macroeconomic data continues to illustrate the rebound in that region’s economy.
Visit www.epfr.com for more info.
Source: EPFR
GreySpark Partners-The Global Regulatory Landscape 2013
August 22, 2013--GreySpark Partners present a report exploring the emerging global regulatory landscape, taking an international view of what are often regional requirements. The report, titled The Global Regulatory Landscape 2013: Five Key Regulatory Initiatives Impacting Global Wholesale Finance, is part of the Market Structure and Regulations stream of research
Abstract The report provides an informed and comparative analysis of regulations, both current and emerging, in nine territories: Australia, Brazil, Canada, the EU, Hong Kong, India, Japan, Singapore and the US. Regulatory activities in these territories were chosen for their relevance to the global financial regulatory landscape. Within these territories, there are five systemically important regulatory mandates that are explored in the report: financial transactions tax, the US Foreign Account Tax Compliance Act (FATCA), the EU’s Markets in Financial Instruments Directive and European Market Infrastructure Regulation, the US’s Dodd-Frank Act (DFA) and the Basel III accords.
Collectively, these regulatory changes create an environment characterised by uncertainty, mismatched objectives and extensive opportunities to misinterpret requirements. As a result of these concerns, three scenarios are points of interest for both regulators and market participants: regulatory avoidance, substituted compliance and regulatory exemptions.
Regulators have sought to determine all potential opportunities for regulatory avoidance and have included measures to close these loopholes. The most prominent regulatory actions are those that require intergovernmental cooperation to ensure compliance; the wide uptake of intergovernmental agreements (IGAs) highlights the desire for cooperation. It is increasingly apparent that regulatory avoidance can only take place beyond the jurisdiction of the US, the EU and the G20 in areas where there is a distinct lack of legal and regulatory momentum makes for an unattractive business and trading environment, thus discouraging moving trading activity to such regions.
Source: GreySpark Partners
S&P Dow Jones Indices Adds Two All Metals Sector Indices to the S&P GSCI Family
August 22, 2013--S&P Dow Jones Indices announced today the launch of the S&P GSCI(R) All Metals 3 Month Forward and S&P GSCI All Metals 3 Month Forward Capped Component. These Indices are designed to measure the precious and industrial metal commodity markets while seeking to reduce negative roll yield in times of contango.
"These indices provide global market participants with investible benchmarks across both the precious metal and industrial metal commodity markets," says Jodie Gunzberg, Vice President at S&P Dow Jones Indices. "The indices combine the safe haven characteristics of precious metals with the economically sensitive characteristics of industrial metals."
Source: MarketWatch
IMF Working paper-Capital Flows are Fickle: Anytime, Anywhere
August 22, 2013--Summary: Has the unprecedented financial globalization of recent years changed the behavior of capital flows across countries? Using a newly constructed database of gross and net capital flows since 1980 for a sample of nearly 150 countries, this paper finds that private capital flows are typically volatile for all countries, advanced or emerging, across all points in time.
This holds true across most types of flows, including bank, portfolio debt, and equity flows. Advanced economies enjoy a greater substitutability between types of inflows, and complementarity between gross inflows and outflows, than do emerging markets, which reduces the volatility of their total net inflows despite higher volatility of the components. Capital flows also exhibit low persistence, across all economies and across most types of flows, Inflows tend to rise temporarily when global financing conditions are relatively easy. These findings suggest that fickle capital flows are an unavoidable fact of life to which policymakers across all countries need to continue to manage and adapt.
view the IMF Working paper-Capital Flows are Fickle: Anytime, Anywhere
Source: IMF
Basel III, Volcker Rule Could Crimp ETF Business, Too: Analyst
August 21, 2013--How much inventory in stocks and bonds- i.e, how much risk-should brokers and market makers be allowed to carry on their books?
This question, part of the last few years' regulatory debates, turns out to matter for the fast-growing exchange-traded fund industry. That’s the notion this morning over at Credit Suisse (CS), where a review of BlackRock's (BLK) ETF business by analysts Craig Siegenthaler, Mark Deluzio and Giuliano Mina includes some caution over how liquid ETFs can be if market making firms face new restrictions.
Source: Barron's
