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Fintech and the digital transformation of financial services: implications for market structure and public policy
July 13, 2021--Economic frictions such as information asymmetries and economic forces such as economies of scale and scope give rise to financial intermediaries. These frictions and forces also shape market structure. While technological advances are not new to finance, digital innovation has brought major improvements in connectivity of systems, in computing power and cost, and in newly created and usable data. These improvements have alleviated transaction costs and given rise to new business models and new entrants.
As technology has increased information exchange and reduced transaction costs, the production of financial services could be disaggregated. Specialized players have unbundled financial services, allowing consumers to find and assemble their preferred suites of products.
However, classic economic forces remain relevant even in an age of digital production. Economies of scale and scope and network effects are present in many aspects of financial services production, including customer acquisition, funding, compliance activities, data and capital (including trust capital). Despite advances in technology, consumer search and assembly costs remain significant. These forces encourage re-bundling, and confer advantages to large multi-product providers, including technology (big tech) firms expanding into financial services from adjacent markets.
Listed Companies Have Less Than Six Years to Align With 1.5 degree C Warming Target, Inaugural MSCI Net-Zero Tracker Reveals
July 12, 2021--Launch of quarterly MSCI Net-Zero Tracker will show progress of listed companies towards the goals of the Paris Agreement and highlight climate leaders and laggards
The world's publicly listed companies must dramatically accelerate climate action if the 1.5°C warming target set out in the 2015 Paris Agreement is to be met, according to a new quarterly Net-Zero Tracker published by MSCI, a leading provider of critical decision support tools and services for the global investment community.
The inaugural Net-Zero Tracker highlights how the annual emissions of listed companies globally are still at the same level as 2013, despite concerted efforts to place climate change at the top of the global agenda. This includes the 2015 Paris Agreement which set a goal to limit global warming to below 2°C, with 1.5°C the preferred target.
The quest for the investment Holy Grail-an index of everything
July 12, 2021--Financial benchmarking giant MSCI is working on the "ultimate index" to track the performance of all markets. This could be the culmination of half a century of academic theory and practical financial engineering.
Indexing is a booming business that slices the market into regions or categories such as equities and fixed income, further subdividing by size or industry.
These are used as benchmarks for fund managers or packaged into investable products. However, the method of combining everything from commodities to venture capital into one gauge has proven to be elusive.
"It’s the Holy Grail," says Mark Makepiece, head of index provider Wilshere. "It will solve the core problems of investment and will be very beneficial."
Historic trend reverses as ETF fees head higher
July 12, 2021--Price war had caused a long period of decline, but that may now be coming to an end
Management charges for exchange traded funds have stopped falling, and in some cases started to rise for the first time, potentially signalling an end to a multi-decade trend of ever-lower fees.
A ferocious price war caused asset-weighted annual fees for US-listed ETFs to tumble 43 per cent to 19 basis points between 2012 and 2020, according to calculations by JPMorgan.
Trackinsight Global ETF Survey: Mid-Year Update Reveals Mixed Fortunes for Vanguard
July 12, 2021--The update includes re-ranked league tables for ETF issuers and index providers alongside new commentary and analysis on thematic, ESG and active ETF market activity.
The update reveals that the North American ETF market, which reached $5.8 Trillion in AuM in Q1 2021, saw growth dominated by Vanguard. The issuer captured over 42% of total flows in the region, adding an incredible $95 Billion in the first quarter. Total ETF flows in North America were $218 Billion over the quarter.
Post-COVID vaccination behaviours and return to activities
July 8, 2021--A new Ipsos study conducted in partnership with the World Economic Forum finds a majority of adults in each of nine countries surveyed saying they are likely to continue socially distancing and wearing a mask in public if or when vaccinated against COVID-19.
The study also highlights widely different levels of confidence across countries when it comes to resuming activities once vaccinated -eating in restaurants, attending sporting events or concerts, using public transportation, and flying domestically or internationally.
The survey was conducted on Ipsos' Global Advisor online platform, June 3-6, 2021, in Brazil, France, Germany, Italy, Japan, Mexico, Spain, the United Kingdom, and the United States among 12,497 adults under the age of 75.
James and Kathryn Murdoch back $250m BlackRock climate fundraising
July 8, 2021--Vehicle hopes to raise $500m to invest in clean energy assets in emerging markets.
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Urgent Action Needed to Address a Worsening 'Two-Track' Recovery
July 7, 2021--When G-20 finance ministers and central bank governors gather in Venice this week, they can take inspiration from the city's unbreakable spirit.
As the world's first international financial center, Venice has faced the vagaries of economic fortunes over centuries, while being directly affected by climate change.
This extraordinary resilience is needed more than ever as policymakers continue to face extraordinary challenges.
The good news is that the global recovery is progressing broadly in line with the IMF's April projections of 6 percent growth this year. After a crisis like no other, we are seeing in some countries a recovery like no other, propelled by a combination of strong fiscal and monetary policy support and rapid vaccinations.
As stocks smash all records, money managers say: get used to it
July 5, 2021--Money managers say equity markets to keep rising in second half of the year & many investors look overseas for returns.
As stocks around the world continue to smash one record after another, some of the world's biggest money managers have a simple message: Get used to it.
The likes of BlackRock Inc., State Street Global Markets, UBS Asset Management and JPMorgan Asset Management expect equity markets to keep rising in the second half of the year, with many investors increasingly looking outside the U.S. for more returns.
Renewables were the world's cheapest source of energy in 2020, new report shows
July 5, 2021--The cost of renewable technologies like wind and solar is falling significantly, according to a new report.
This is fuelling the rise of renewables as the world's cheapest power.
The cost of large-scale solar projects has plunged 85% in a decade.
Retiring costly coal plants would also cut around three gigatonnes of CO2 a year.
Renewables are now significantly undercutting fossil fuels as the world's cheapest source of power, according to a new report.
Of the wind, solar and other renewables that came on stream in 2020, nearly two-thirds-62% -were cheaper than the cheapest new fossil fuel, according to the International Renewable Energy Agency (IRENA).