Global ETF News Older than One Year
IMF 2013 Spillover Report
August 1, 2013--Summary: Five years after the global financial crisis, the severe tensions and risks rooted last year in some of the "Systemic five" (S5)-China, euro area, Japan, United Kingdom, United States--have abated but all five are still operating below potential, i.e., they are not contributing to global activity as much as they might: if they could somehow close their output gaps, global output would be closer to potential by 3 percentage points.
Meanwhile, many parts of the rest of the world have been at or near potential. Most recently though, there have been signs of accelerated recovery in the United States and slowdown in emerging markets. This continued divergence in cyclical positions poses a global challenge, namely to find policies that help the S5 close their output gap without over-stimulating or over-tightening, through spillovers, economies that do not need it.
view the IMF 2013 Spillover Report
Source: IMF
BlackRock ETP Research-ETP Flows Quarterly -Dissecting Dividend Funds
July 31, 2013--Income-starved investors have turned to dividend stocks as bond alternatives. Exchange-traded products (ETPs) focused on dividends have rushed to meet this demand.
Highlights include:
Dividend funds have gathered $87 billion in assets over the years, accounting for 5.7% of total global equity ETP assets.
Money flows closely track ETPs specializing in investment grade bonds—and tend to move inversely with flows into cyclical stocks.
Dividend funds vary greatly in industry sector exposure and yield because of differences in methodologies and selection criteria.
US stocks dominate the holdings of the top 14 global divided funds with an 82% share. The top 25 stocks held by dividend funds make up 30% of total assets.
Stock concentration within industry sectors is relatively high, with the top five stocks making up 65% of energy holdings of dividend funds.
FOR ACCREDITED INVESTORS ONLY IN CANADA AND PROFESSIONAL INVESTORS IN OTHER REGIONS.
Source: BlackRock-ETP Research
Focus on Reviving Credit Growth as External Funding Withdrawal in Emerging Europe Picks Up
July 30, 2013--The Vienna 2 Initiative Steering Committee[1] met in Luxembourg on 17 July, 2013 to discuss deleveraging trends, work to address asset quality issues in emerging Europe, and the implications for the proposed EU resolution framework on emerging European economies, including non-EU member countries.
For the first time, the representatives of major parent bank groups active in emerging Europe were invited to and presented their new role and commitment to the Steering Committee.
External funding reductions pick up in first quarter
The Steering Committee noted in its new Deleveraging Monitor that there were further reductions in external funding from western banks to Central, Eastern, and South Eastern Europe (CESEE) excluding Russia and Turkey during the first quarter of 2013. Furthermore, the forecast provided in the previous Deleveraging Monitor that the second wave of funding reductions that had started in mid-2011 would taper off did not prove correct. In fact, cross-border funding restrictions persist, with significant across countries, due, in part, to the impact of external perceptions of domestic climates. Private sector credit growth remained weak, with the exception of Turkey, and loan-to-deposit ratios declined further. There is a concern that deterioration in market sentiment vis-à-vis emerging market countries that started in late May may intensify funding reductions. The continued close monitoring of deleveraging with an eye for systemic risks to the region will therefore remain very important.
view the Deleveraging Monitor report
Source: World Bank
Earnings gap drives performance wedge between US and Eurozone equities
July 30, 2013--Eurozone banks are unlikely to repeat the stellar Q2 results of US banks, where most have exceeded expectations.
US equities may extend their rally as the banking sector strengthens. Eurozone banks’ deeply discounted valuations imply weakness, and may undermine Eurozone equities.
Source: Boost
IOSCO publishes Recommendations for Supervisory Colleges for CRAs
July 30, 2013--The International Organization of Securities Commissions (IOSCO) published today the final report on Supervisory Colleges for Credit Rating Agencies, which recommends establishing supervisory colleges for internationally active credit rating agencies (CRAs), and provides preliminary guidelines on how to constitute and operate them.
The recommendations are aimed at improving the integrity of CRAs, as part of IOSCO´s effort to enhance investor protection and the fairness, efficiency and transparency of securities markets. G20 leaders are also concerned with the integrity of CRAs and have repeatedly encouraged IOSCO to work to improve their effectiveness.
Source: IOSCO
ETF Securities Precious Metals Weekly-Silver Shines as Gold:Silver Ratio at 3-Yr High Attracts Investors.
July 29, 2013--Gold:silver ratio hit the highest level in nearly 3-years. Gold posted a third
consecutive weekly gain aided by a weaker US dollar and mixed economic data, and silver followed its slipstream.
Silver has been the weakest performing metal on a 12-month basis, but outperformed other precious metals last week, gaining 3.1%. In a role reversal, palladium, the best performer on a 12-month basis, was the biggest loser last week, declining 1.6%. While US benchmark equities were affected by end of the month position squaring and traditionally light summer holiday turnover, precious metals buyers remained active. The US Mint reported last week that it is on pace to sell 4.7mn ounces of silver coins in July, up over 100% from a year earlier.
The sale of US Mint silver coins is running at a record pace in 2013, potentially near 50mn ounces. In 2011, The US Mint’s previous record of 40mn ounces in 2011, roughly matched total US annual production in that year. According to The Silver Institute, US production in 2012 was just over 32mn ounces, well below the current level of US coin demand.
Options pricing indicates potential upside for silver. Silver remains the PM to watch as is hovers at US$20/oz., a key pivot point since the rally to $21oz. in the spring of 2008.
Source: ETF Securities
Vanguard Reports Strong Global ETF Growth; Continues to Broaden ETF Lineups and Lower Expenses
July 29, 2013--Vanguard today reported that its exchange-traded funds (ETFs) continue to gain widespread investor acceptance in the United States and in other markets around the world.
The third-largest worldwide provider of ETFs, with global ETF assets of $281 billion as of June 30, 2013, has expanded its suite of products in the United States, Australia, Canada, and Europe, and introduced its first ETF in Hong Kong.
"Investors worldwide have become more focused on broad diversification, low investment costs and transparency—the key characteristics of Vanguard index funds and ETFs. It is gratifying to see investors embracing the Vanguard way of investing as we seek to best position them for long-term financial success,” said Jim Norris, managing director for Vanguard International.
Source: Vanguard
BlackRock clarifies ETF 'true market' claim
July 26, 2013--As heavy outflows, product withdrawals and confusion over pricing vex the ETF industry, BlackRock softens its claim that investor demand had made ETFs the 'true market'.
It’s unclear whether the problems are a blip or a more serious threat to the products.
It was a classic case of turning a good news story
Source: Euromoney
Winthrop Capital Management-2nd QTR 2013 Economic & Capital Market Summary
July 26, 2013--We are approaching the five year anniversary of the beginning of the Financial Crisis. By this time in 2008 we had already experienced the complete seizure of the Auction Rate Preferred securities market and the takeover of Bear Stearns by JP Morgan Chase. In September of 2008, we would see the collapse of Lehman Brothers and the government takeover of AIG.
We stand here today, shoulders slumped, and heads bowed mourning the lack of real progress in addressing the structural problems that are impeding sustained economic growth and private credit expansion. The brutal reality is that as long as the Federal Reserve maintains any form of open market purchases of securities as a means to manipulate interest rates our economy and capital markets remain on life support, unable to function on their own. As a result, we expect returns on financial assets to be relatively low over the near term as economic uncertainty impedes fixed investment and business expansion.
With over $2.6 trillion in monetary stimulus from the Federal Reserve, the economy at best is just muddling along. And, now there are signs that are raising concern for us. These include an increase in consumer debt, slow growth in job creation, slow growth in small business, and constrained private credit expansion. On the positive side, the domestic manufacturing sector, highlighted by the auto industry has shown solid growth while the recovery in domestic housing remains strong.
view the Winthrop Capital Management-2nd QTR 2013 Economic & Capital Market Summary
Source: Winthrop Capital Management
EPFR Global News Release-Fund flows flashing green for Europe equity, US junk bonds and healthcare in late July
July 26, 2013-Flows into EPFR Global-tracked funds during the week ending July 24 highlighted investor faith in the US recovery and their growing conviction that this Europe's battered economy is finally on the mend.
Retail commitments to US Equity Funds hit a level last seen in 3Q09 and US High Yield Bond Funds posted their second biggest weekly inflow on record while combined flows into the two major Europe Regional Equity Fund groups were the biggest since mid-December.
The week also saw investors respond to the improved prospects for structural reform in Japan and signals from China’s government that its willingness to trade growth for reform stops at a point north of 7%. Asia ex-Japan Equity Funds snapped a nine week outflow streak, Japan Equity Funds posted inflows for the 27th straight week and flows into Japan Bond Funds were the highest since the second week of January.
Visit www.epfr.com for more info
Source: EPFR
