Global ETF News Older than One Year
The Economics of Social Unrest-Economic analysis can shine a revealing light on the causes and consequences of social unrest
September 21, 2021--The past decade was marked by a series of high-profile social protests-the Arab Spring, Black Lives Matter, the Gilets Jaunes, and Occupy Wall Street, to name just a few. Yet while there has been a lot of soul-searching about their causes and consequences, and even though many commentators have pointed their fingers at economic forces, the economics profession has been relatively slow to respond. Indeed, rigorous quantitative economic analysis of social unrest is scant, with evidence limited to isolated cases until recently.
However, a new body of IMF staff research is filling this gap by analyzing the risks and economic costs of social unrest.
Measuring unrest
A key challenge when researching social unrest-defined as protests, riots, and other forms of civil disorder and conflict-is identifying when such events have occurred. Although sources of information are available, many are sporadic or are inconsistent in their coverage.
Source: IMF
BIS-An inflation process in flux: BIS Quarterly Review
September 20, 2021--New study shows that price changes in narrowly defined sectors account for most of the fluctuations in consumer price inflation, indicating that the recent rise in inflation is likely to be transitory.
The study also finds that in an environment of sector-specific price changes, monetary policy is limited in its ability to steer inflation within tight ranges, putting a premium on flexibility in pursuing inflation targets.
Financial markets sent mixed signals in the period under review, with some developments pointing to an upbeat outlook while others indicated unease.
In a regime of low and stable inflation, most of the fluctuations in headline inflation are due to price swings in finely defined expenditure categories rather than to generalised price movements, according to a new study released today in the Quarterly Review of the Bank for International Settlements (BIS). These changes tend to have only a transitory impact of inflation, which is thus more likely to remain range-bound.
Source: BIS
Climate change ETFs found to be undermining war on global warming
September 20, 2021--Academic research shows the funds also starve sectors of capital to invest in transition to cleaner energy
Climate-focused investment funds are undermining the fight against global warming by routinely engaging in greenwashing, academic research has claimed.
Passive exchange traded funds tracking "low carbon", "climate change" or "Paris-aligned" indices allocate little of their money to the greenest companies and habitually increase the weighting of companies whose environmental performance is deteriorating.
Source: ft.com
To Safeguard Global Financial Stability, Boost the Resilience of Investment Funds
September 17, 2021--Our brush last year with one of the biggest economic shocks of our lifetimes revealed some fundamental vulnerabilities that could affect global financial stability. Caught up in the financial market turmoil generated by risk averse investors, many investment funds were heavily affected by the "dash-for-cash" that extended across borders-and which triggered significant outflows from risky assets and from emerging and developing economies.
As this happened, and investor capital flowed out of money market and open-end mutual funds, asset managers were forced to fire-sell these assets, which accelerated the drying up of liquidity and the drop in market value of key assets.
Source: IMF
IMF-Departmental Paper-Investment Funds and Financial Stability: Policy Considerations
September 17, 2021--Summary:
The paper's analysis underscores the importance of the ongoing Financial Stability Board-led process of identifying policy options, involving national authorities and the International Organization of Securities Commissions and other standard setters.
In this context, the global nature of the investment fund business and fungibility of financial flows makes it vital to ensure consistency of global policy choices that can secure financial stability by precluding regulatory arbitrage.
Source: IMF
Regulation and respectability amid the rapid evolution of cryptoassets
September 16, 2021--If recent news is anything to go by, the cryptoasset industry is continuing to evolve at breakneck pace.
In the last few weeks alone, El Salvador became the first country to accept digital currency as legal tender, the UK's Financial Conduct Authority (FCA) called for more powers to protect consumers from risky crypto ventures promoted by influencers like Kim Kardashian, and Jay Clayton (former head of the Securities and Exchange Commission) became the latest high-profile regulator to turn to the crypto industry.
Despite this rapid transformation, many observers still think of it as being akin to the Wild West after the Silk Road darknet marketplace or criminally-complicit trading exchange Liberty Reserve-scandals that marred crypto's early years.
Source: ukfinance.org.uk
Trackinsight-ETF markets in focus: August 2021-Investors have flocked to ETFs over 2021, adding $789 Billion of flows year-to-date
September 16, 2021---ETFs on track to hit $10 trillion AuM, but European ETF flows slow
Having smashed through the $9 Trillion AuM barrier in July, growth continued, but slowed over August, according to the latest data from Trackinsight, setting the industry up for a record-setting year of unprecedented growth and issuance.
Over August, the 7,400 ETFs covered by Trackinsight saw $86.2 Billion of new flows to command a total of $9.32 Trillion in AuM. Investors have flocked to ETFs over 2021, adding $789 Billion of flows year-to-date.
Competing for this wave of new money are over 559 new ETFs which have launched this year, including over 160 actively-managed ETFs and 119 ESG ETFs. This far exceeds the 458 launches seen in 2020, indicating that ETFs have become the preferred distribution technology for asset managers promoting their investment ideas.
Source: trackinsight.com
G20 GDP growth slows to 0.4% in the second quarter of 2021, but large differences exist across countries
September 15, 2021--Gross domestic product (GDP) of the G20 area grew by 0.4% in the second quarter of 2021, down from 0.9% in the first quarter of 2021. However, this figure conceals large differences in the growth observed across countries.Among the G20 economies, GDP growth slowed in Turkey(to 0.9%, from 2.2%),Korea(to 0.8%, from 1.7%) and Australia(to 0.7%, from 1.9%). GDP contracted sharply in India(by (minus) 10.2%, after 2.3% growth).
GDP also contracted, to a lesser extent, in Canada (by (minus) 0.3%, after 1.4% growth) and Brazil (by (minus) 0.1%, after 1.2% growth). GDP growth resumed in the United Kingdom(to 4.8%, following a contraction of (minus) 1.6%),in the European Union as a whole (to 2.1%, following a contraction of (minus) 0.1%), in Germany (to 1.6%, following a contraction of (minus) 2.0%), in Saudi Arabia (to 1.1%, following a contraction of (minus) 0.5%) and in Japan(to 0.5%, following a contraction of (minus) 1.1%).
Remaining G20 economies recorded accelerating growth rates in the second quarter of 2021: Italy (2.7%, from 0.2%), the United States (1.6%, from 1.5%), Mexico(1.5%, from 1.1%), China and Indonesia (1.3% in both countries, from 0.4% and 0.3%, respectively) and France(1.1%, from 0.0%).
Source: OECD
How Can Cities Tackle Climate Change & Biodiversity Loss in Nature-Smart Ways?
September 14, 2021--Every day, the world awakens to news of another heatwave, flood, drought, tropical cyclone, wildfire, or other climate-induced natural hazard. The new report by the Intergovernmental Panel on Climate Change (IPCC) gives a code-red climate warning, with a forecast for global warming of 1.5℃C by 2040.
The global community has grown ever more aware that biodiversity, climate change, economic prosperity, the well-being of people, and the health of the planet are interconnected.
And cities are of particular concern: They consume 78 percent of the world's energy and produce more than 70 percent of greenhouse gas emissions. Moreover, seven of 10 people are projected to live in cities by 2050, so urban areas aren't just a contributor to climate and biodiversity challenges; they also have the unique opportunity to address them in a sustainable, lasting way.
Source: World Bank
Sustainable Financing and Investing Survey -Global Report
September 13, 2021--New roles and responsibilities for issuers and investors gains potency and permanence
The revolution in how companies and institutional investors see their role and responsibility on social and environmental issues has continued to gain strength and momentum in the past year.
Indeed, if the pandemic helped provoke a reassessment of the relationship the capital markets have with society, its participants are now actively redefining this relationship with sustainability increasingly at the core. Such profound change is evidenced in our fifth annual global survey of 2,000 capital markets issuers and institutional investors, conducted during May and June.
Powerfully, it shows that in addition to values underpinning why companies and investors care about these issues -89% of issuers and investors say they are important -the financial benefits of doing so are now recognised more widely than before. In fact, 51% believe that paying attention to these issues can help improve returns or reduce risk, which is the highest percentage in three years.
Source: gbm.hsbc.com
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