Global ETF News Older than One Year
Understanding the Rise in Long-Term Rates
April 22, 2021--The rise in long-term US interest rates has become a focus of global macro-financial concerns. The nominal yield on the benchmark 10-year Treasury has increased about 70 basis points since the beginning of the year. This reflects in part an improving US economic outlook amid strong fiscal support and the accelerating recovery from the COVID-19 crisis.
So an increase would be expected. But other factors like investors' concerns about the fiscal position and uncertainty about the economic and policy outlook may also be playing a role and help explain the rapid increase early in the year.
Source: imf.org
Quant winter' thaw ends long spell of drab returns for funds
April 22, 2021--AQR among the big names on the rebound as new phase of pandemic shakes up asset markets
Source: ft.com
Revealed: Leading Asset Managers Doubling Down on Coal Despite Net-Zero Pledges
April 21, 2021--Reclaim Finance has today released the first edition of a scorecard on leading asset managers' climate commitments, focusing on their approach to the coal sector (1). Produced with four partner NGOs from across Europe and North America,* the report compares 29 asset managers, with a focus on the European market (2). The authors reveal that despite 16 asset managers holding long-term climate commitments, nearly all are failing to take the first step to making them a reality: exiting coal.
Less than half of the asset managers assessed have a public policy to limit coal investments - titans like Vanguard, Schroders and PIMCO are notable absences. Where policies do exist, they allow for so many exceptions (3) that only 25% of all the assets managed within the sample are covered by a coal exclusion criterion.
The analysis unveils that while €23 trillion of assets under management are covered by long term climate commitments (like net zero pledges), only €3.4 trillion exclude companies with coal expansion plans. This comes despite a series of highly-publicized net-zero pledges from leading asset managers recently, with 13 of those surveyed having joined the Net Zero Asset Managers' Initiative, among them BlackRock and Allianz GI last month. Despite that, six signatories to the NZAMi are yet to adopt any coal exclusion policy whatsoever.
Source: reclaimfinance.org
Commodity Prices to Stabilize after Early 2021 Gains, Supported by Global Economic Recovery
April 20, 2021--Path of commodity prices depends on pace of recovery and containment of COVID-19
Commodity prices continued their recovery in the first quarter of 2021 and are expected to remain close to current levels throughout the year, lifted by the global economic rebound and improved growth prospects, according to the World Bank’s semi-annual Commodity Markets Outlook.
However, the outlook is heavily dependent on progress in containing the COVID-19 pandemic as well as policy support measures in advanced economies and production decisions in major commodity producers.
Energy prices are expected to average more than one-third higher this year than in 2020, with oil averaging $56 a barrel. Metal prices are expected to climb 30 percent; and agricultural prices are forecast to rise almost 14 percent. Almost all commodity prices are now above pre-pandemic levels, driven by the upsurge in economic activity, as well as some specific supply factors, particularly for oil, copper, and some food commodities.
Source: World Bank
A Future with High Public Debt: Low-for-Long Is Not Low Forever
April 20, 2021--Many countries are experiencing a combination of high public debt and low interest rates. This was already the case in advanced economies even prior to the pandemic but has become even starker in its aftermath. A growing number of emerging market and developing economies are likewise enjoying a period of negative real rates-the interest rate minus inflation-on government debt.
The IMF has called on countries to spend as much as they can to protect the vulnerable and limit long-lasting damage to economies, stressing the need for spending to be well targeted. This is especially critical in emerging market and developing economies, which face tighter constraints and associated fiscal risks, where greater prioritization of spending is of the essence.
Source: IMF.org
BlackRock assets under management surge to record $9tn
April 15, 2021--Investors pour money into fixed income and equity funds
BlackRock's assets under management ballooned to a record $9tn in the first quarter, boosted by record fund inflows across its investment platform, led by fixed income.
Shares in BlackRock rose 2 per cent to a fresh high on Thursday after the results, which eclipsed earnings and revenue forecasts. Investors in particular cheered higher performance fees and organic growth in assets that came in above the long-term target set by the world's largest asset manager.
Source: FT.com
Oil Surges to Highest in a Month With U.S. Demand Picking Up
April 15, 2021--Oil surged to the highest level in a month --breaking out of a weeks-long holding pattern-- as shrinking crude stockpiles in the U.S. supported hopes for a global demand recovery.
Futures rose 4.9% in New York, the most since late March, after trading in a $5 range for weeks.
U.S. crude inventories are at the lowest since February following the biggest decline in two months, according to the Energy Information Administration. At the same time, a gauge for gasoline demand ticked higher for a seventh straight week. That’s helped prices that have struggled to rally past $60 a barrel.
Source: au.finance.yahoo.com
ETFGI reports assets invested in ETFs and ETPs listed globally reach a new record of US$ 8.56 trillion at the end of Q1
April 14, 2021--ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs and ETPs ecosystem, reported today that assets invested in ETFs and ETPs listed globally reach a new record of of US$ 8.56 trillion at the end of Q1. The US$136.20 billion in net inflows gathered during March are the second highest monthly inflows behind the prior record US$139.89 billion gathered during February 2021.
At the end of Q1, the year to date, net inflows are a record US$359.17 billion which are significantly higher than the prior record US$197.2 billion gathered during Q1 2017 and higher than the US$117.61 billion gathered at the end of Q1 2020. Assets invested in the global ETFs and ETPs industry have increased by 2.9% from the prior record US$8.32 trillion at the end of February 2021, to the new record US$8.56 trillion at the end of Q1, according to ETFGI's March 2021 Global ETFs and ETPs industry landscape insights report, the monthly report which is part of an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Assets invested in ETFs and ETPs listed globally reach a record $8.56 trillion at the end of Q1 2021.
The $136.20 Bn in net inflows gathered during March are the second highest monthly inflows behind the prior record $139.89 Bn gathered in February 2021.
Record net inflows year to date of $359.17 Bn at of end of Q1 are significantly higher than the prior record $197.2 billion gathered during Q1 2017.
Source: ETFGI
BlackRock secures largest-ever ETF launch as green investing wave builds
April 9, 2021--Institutional investors have invested $1.25 billion in a new U.S. fund aimed at identifying the winners of the transition to a low-carbon world, making it the largest exchange-traded fund ever launched. ESG products.
The BlackRock US Carbon Transition Readiness Fund opened on Thursday, surpassing the iShares ESGM SCIUSA Leaders Fund, which debuted in May 2019 at $850 million and was the largest ETF list before.
A sister fund that invests in companies outside the United States also launched Thursday after raising $ 475 million from investors. This is also one of the largest new ETFs ever launched.
Source: californianewstimes.com
IMF-Global Financial Stability Report, April 2021: Preempting a Legacy of Vulnerabilities
April 6, 2021--Summary:
Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks. Chapter 1 warns that there is a pressing need to act to avoid a legacy of vulnerabilities while avoiding a broad tightening of financial conditions. Actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities. The recovery is also expected to be asynchronous and divergent between advanced and emerging market economies.
Given large external financing needs, several emerging markets face challenges, especially if a persistent rise in US rates brings about a repricing of risk and tighter financial conditions. The corporate sector in many countries is emerging from the pandemic overindebted, with notable differences depending on firm size and sector. Concerns about the credit quality of hard-hit borrowers and profitability are likely to weigh on the risk appetite of banks. Chapter 2 studies leverage in the nonfinancial private sector before and during the COVID-19 crisis, pointing out that policymakers face a trade-off between boosting growth in the short term by facilitating an easing of financial conditions and containing future downside risks. This trade-off may be amplified by the existing high and rapidly building leverage, increasing downside risks to future growth. The appropriate timing for deployment of macroprudential tools should be country-specific, depending on the pace of recovery, vulnerabilities, and policy tools available. Chapter 3 turns to the impact of the COVID-19 crisis on the commercial real estate sector. While there is little evidence of large price misalignments at the onset of the pandemic, signs of overvaluation have now emerged in some economies. Misalignments in commercial real estate prices, especially if they interact with other vulnerabilities, increase downside risks to future growth due to the possibility of sharp price corrections.
Source: IMF.org
