Global ETF News Older than One Year
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
EPFR Global News Release-Fund flows largely negative as Syria and the US keep lid on any post-Labor Day optimism
September 6, 2013--Investors left for the last of their summer vacations with Syria's civil war, China's economy and US policy-foreign, fiscal and monetary-on their minds. They returned with the same issues still front and center.
Fears that the US economy faces higher taxes, oil prices and interest rates in 4Q13 as the Federal Reserve takes the first step to wind down its quantitative easing program, the US becomes more involved in Syria’s civil war and lawmakers wrestle with spending limits and debt ceilings kept the pressure on US Equity Funds and most emerging markets fund groups in early September.
Overall, investors pulled over $9 billion out of US Equity Funds during the week ending Sept. 4 and nearly $6 billion out of Emerging Markets Equity and Bond Funds. Redemptions from all EPFR Global-tracked Equity Funds totaled $11.4 billion during this period while Bond Funds posted net outflows of $284 million as they extended a six week outflow streak. Money Market Funds saw $7.43 billion flow out.
Visit www.epfr.com for more info
Source: EPFR
FSB publishes progress report to G20 Leaders
September 5, 2013--The FSB published a letter from the Chairman to G20 Leaders highlighting key financial reform issues for the Summit's attention,
a narrative and an overview report on the progress made in developing and implementing global financial regulatory reforms since the G20 Los cabos Summit in June 2012, and a scoreboard status report that provides a visual summary on implementation of the G20 recommendations on financial regulatory reform.
Source: FSB (Financial Stability Board)
BlackRock Research- ETP Landscape- Outflows amid uncertainty
September 5, 2013--With uncertainty about economic growth and Federal Reserve policy, the Global ETP industry experienced outflows of ($15.0bn) in August, the second month of redemptions this year following very strong asset gathering in July.
This is the largest monthly outflow on record for global ETPs. The previous monthly record for global ETP outflows was in January 2010, when the industry witnessed outflows of ($13.4bn).
News that the Eurozone posted its first economic expansion in 18 months helped fuel record setting monthly flows of $4.7bn into Pan European Equity ETPs in August.
Overall Equity ETP flows were negative at ($9.4bn) as US exposures lost momentum in August, registering outflows of ($14.5bn). However excluding significant SPY (SPDR S&P 500) redemptions of ($14.0bn), US Equity outflows were modest at ($0.5bn).
Year-to-date Equity ETP flows were $138.5bn, still well ahead of last year's pace.
In the broader mutual fund space, market uncertainty helped fuel $52bn of flows into Money Market funds, the highest monthly total this year and $21bn higher than last month.
Source: BlackRock ETP Landscape Research
NYSE Euronext Monthly ETF Activity Report -August 2013
September 5, 2013--Listings
There were no new ETF listings in August.
At the end of August, NYSE Euronext's European markets had 647 listings of 557 ETFs from 17 issuers.
Trading activity
Average daily value traded on-book in August of €183.3 million, a decrease of 15.7% vs July 2013, and down 4.4% vs August 2012.
Total value traded on-book amounted to €4.0 billion, a decrease of 19.4% vs July 2013, and down 8.6% vs August 2012.
Average of 6,190 on-book trades (single-counted) executed daily last month, a decrease of 7.7% vs July 2013, and up 5.2% vs August 2012.
Total of €377.9 million exchanged in block trades in August, up 3.7% from the €364.4 million in July and down 27.5% vs August 2012.
Overall, block trade volume represented 9.4% of the total regulated market ETF trading activity on NYSE Euronext.
Assets Under Management (AUM)
At the end of August 2013, the combined AUM of all ETFs listed on the NYSE Euronext European markets totalled €163.2 billion, an increase of 13% YTD.
Market Quality
In August, 2 LPs took on liquidity responsibilities for 10 new LP contracts on 10 different ETFs:
Commerzbank further expanded their activity by taking on responsibilities for 5 Lyxor ETFs.
Getco added 2 iShares ETFs and 3 Lyxor ETFs to their activity.
Median spread for all listed ETFs of 27.3 bps, an improvement of 33% vs July 2013 and up 2% vs August 2012.
23 Liquidity Providers currently active on ETFs.
view the view the EU Monthly report view the US ETP Monthly report
Source: NYSE Euronext
Eleven asset managers in the $1 trillion club
Four companies had in excess of $2 trillion, says the report by research firm Cerulli Associates. These were BlackRock, the world's largest asset manager, with $3.8 trillion under management, State Street Global Advisors, with $2.1 trillion, and Vanguard and Pimco, which each had $2 trillion.
Source: Funds-Europe.com
September 5, 2013--Eleven asset managers had more than $1 trillion (€760 billion) in assets at the end of 2012, up from nine at the end of 2011, according to new research.
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