Global ETF News Older than One Year
BlackRock New ETF Landscape Report: Industry Highlights – August 2011
September 22, 2011--The ETF Landscape: Monthly Highlights provides a snapshot of ETF and ETP AUM and asset flows3 at a combined global level and various regional levels as of the most recent month-end period. All currency values are denominated in US dollars.
Key global ETF/ETP statistics at a glance:
Month-end AUM: US$1,575 Bn
Decrease from prior month AUM: -US$68 Bn
August 2011 NNA: US$1.6 Bn
YTD NNA: US$106 Bn
# of ETFs and ETPs: 4,036
August 2011 monthly flow highlights:
The “risk-off” market conditions of August 2011 were evident in ETF/ETP AUM flows.
Overall, fixed income and commodity products attracted US$5.6 Bn and US$0.8Bn NNA respectively, while equity products experienced net outflows of US$3.7 Bn for the month.
AUM of US$1,575 Bn decreased by US$68 Bn (-4%) in August 2011 as NNA of US$1.6 Bn were combined with US$70 Bn of negative market and exchange rate move, which represents a one month return of -4% compared to the MSCI All Countries World Index2 one month return of -7.3%.
This marks the third month in 2011 where global AUM has decreased from the prior month-end, which likewise occurred in May and June 2011 when AUM decreased 2% and 1%, respectively.
Despite challenging market conditions, AUM has grown by US$378 Bn or 32% versus August 2010 AUM of US$1,197 Bn
Global ETF/ETP YTD flows and market share
August 2011 YTD flow highlights:
AUM increased by US$93 Bn YTD through August 2011. Underlying this YTD change were NNA of US$106 Bn offset by US$13 Bn of negative market and exchange rate move, or -0.9% YTD return as compared to the MSCI All Countries World Index YTD return of -4.5%.
North America equity funds generated the largest 2011 YTD NNA with US$35 Bn, followed by fixed income with US$28 Bn, Europe equity with US$16 Bn, global/other with US$13 Bn, commodities with US$13 Bn, and Asia Pacific equity with US$3 Bn. Emerging markets equity funds generated NNA outflows of -US$2 Bn.
Regional highlights:
The global business remains concentrated in the United States with 68% of AUM market share.
Europe has market share of 22%, Asia Pacific (ex-Japan) has 6% and other regions have market share in the range of 1% to 3%.
United States AUM of US$1,066 Bn has grown 5% YTD through August 2011. Other regions have experienced higher growth rates including Europe which grew by US$339 Bn (8%), Asia Pacific (ex-Japan) grew by US$61 Bn (12%) and Latin America grew by US$11 Bn (10%).
Source: BlackRock Investment Institute
Global Experts Poll: Confidence Severely Lacking in the State of the Global Economy
New quarterly Global Confidence Index polls 1,500 experts from business, government, international organizations and academia who are members of the Forum’s Network of Global Agenda Councils
Less than 10% express confidence in the state of the global economy over the next 12 months
Less than 10% express confidence in the state of global governance over the next 12 months
September 21, 2011--The World Economic Forum’s Global Confidence Index shows very little confidence worldwide in the state of the global economy and in global governance over the next 12 months.
Over 1,000 global experts from the public and private sectors were surveyed; one-half of the respondents are pessimistic about the global economic outlook and one-quarter anticipates there will be an economic disruption during the next year. One in four say there is a lack of global leadership to deal with problems during this time and a majority fear a geopolitical as well as societal upheaval, according to the quarterly Global Confidence Index.
Perspectives outside the private sector were the most bearish with almost 54% of the respondents indicating that they are not confident in the state of the global economy; just over 40% expressed little confidence in the economy in the next 12 months.
view results-Global Confidence Index
Source: World Economic Forum
IMF: Global Financial System Risks Escalate
Weak growth, balance sheets and political resolve cause crisis of confidence
Large number of countries affected by government debt risks
Policymakers need to act to repair household, government and financial balance sheets
September 21, 2011--Financial stability risks have risen sharply in recent months, as slower economic growth, market turbulence in Europe, and the credit downgrade of the United States have weighed on the global financial system, according to new analysis by the IMF.
Financial markets have begun to question the ability of policymakers to command broad political support for needed policy actions, the IMF said in its latest Global Financial Stability Report.
“We are in the middle of a crisis of confidence, which is taking its toll on both the economy and the financial system” said José Viñals, Financial Counsellor and head of the IMF”s Monetary and Capital Markets Department, which produced the report. Improvements in financial stability over the past three years have been partly reversed, said Viñals.
view the Global Financial Stability Report Grappling with Crisis Legacies
Source: IMF
FTSE Announces 2011 Country Classification Changes
September 20, 2011--FTSE Group (“FTSE”), the award winning global index provider, today announces the results of its 2011 Country Classification Annual Review.
The FTSE Country Classification Annual Review, carried out every September, is the process by which global equity markets are classified as Developed, Advanced Emerging, Secondary Emerging or Frontier within the FTSE Global Equity Index Series.
The Review has assumed particular importance this year in the light of speculation about the possibility of a sovereign default within the Eurozone. If such a default were to occur, FTSE will immediately review the affected country’s ranking against the country classification criteria, and determine whether any further classification changes are warranted.
2011 Country Classification Changes
As a result of the 2011 annual review, the FTSE Policy Group has approved the following changes:
Thailand will move from Secondary to Advanced Emerging
Ghana will be included as a Frontier market
The change to Thailand’s market status will be implemented in the FTSE Global Equity Index Series in March 2012. The inclusion of Ghana as a Frontier market will take effect from June 2012.
Source: FTSE
Mining: Sector Results Profile
September 20, 2011-The World Bank has supported 39 mining sector reform projects in 24 countries since 1988. The reforms have contributed to an increase in investment in the mining sector and related economic indicators such as exports, fiscal revenues and gross domestic product (GDP) in most recipient countries. The critical next steps are promoting policies and programs to strengthen governance and the links to the rest of the economy to ensure that the benefits are widespread and sustained.
Challenge
Many countries now view the mining sector as a key engine of economic development. Ample evidence exists that countries which adopt modern mining legislation and offer an enabling environment can attract private sector investment in mining exploration and production. This, in turn, contributes to increased tax revenues, export earnings, employment opportunities, infrastructure development especially in rural areas, and transfer of technology to the host countries. However, there is the risk that mining operations turn into socio-economic enclaves as well as cause environmental damage. Attention to social and environmental considerations, and government commitment to good governance and transparency is important. Countries, communities, and companies face tough questions about opportunities and risks as they develop steps to ensure responsible approaches toward mineral resource development.
Source: World Bank
IMF: World Economic Outlook - Slowing Growth, Rising Risks
September 20, 2011--Relative to our previous World Economic Outlook last April, the economic recovery
has become much more uncertain. The
world economy suffers from the confluence of two adverse developments. The first is a much slower recovery in advanced economies since the beginning of the year, a development we largely
failed to perceive as it was happening. The second is a large increase in fiscal and financial uncertainty,
which has been particularly pronounced since August.
Each of these developments is worrisome— their combination and their interactions more so. Strong policies are urgently needed to improve the outlook and reduce the risks.
Growth, which had been strong in 2010, decreased in 2011. This slowdown did not initially cause too much worry. We had forecast some slowdown, due to the end of the inventory cycle and fiscal consolidation. One-time events, from the earthquake and tsunami in Japan to shocks to the supply of oil, offered plausible explanations for a further slowdown. And the initial U.S. data understated the size of the slowdown itself. Now that the numbers are in, it is clear that more was going on.
view the MF: World Economic Outlook - Slowing Growth, Rising Risks report
Source: IMF
FOA Announces Independent Study On The Impact Of Speculative Trading In Commodity Markets
September 20, 2011--The Futures and Options Association (FOA) announces the findings of a report on speculation in commodities markets. The report “The impact of speculative trading in commodity markets – a review of the evidence”, which was compiled by the economic research group, FTI Consulting (FTI), constitutes a literature review of the evidence on market speculation and an investigation into the underlying arguments for and against
financial participation in commodity markets.
The report notes that speculation is one element of financial activity in commodity markets (which may also
include portfolio hedging and investment diversification). FTI found little evidence to support the common
perception that speculation is a direct or major cause of long-term pricing trends but recommends that further
work should be undertaken to fully understand the complex interaction between financial and commodity
markets. In addition, the report concluded:
speculation is not a major cause of market volatility, but can amplify underlying price movements;
the most critical reports accept that, at worst, speculation accounts for no more than 25% of
commodity price movements in recent years, leading to the conclusion that 75% of such movements
Source: FOA
Opportunities to hide in murky world of ETFs
September 19, 2011--Director ETF and Delta1 Trading,” read the job title listed on the LinkedIn profile of Kweku Adoboli, the junior trader charged last week with causing a $2.3bn loss at UBS.
Just underneath this line in Mr Adoboli’s profile was a much more telling career detail: the 31-year-old Ghanaian’s former position in the back office of UBS as a “Trade Support Analyst”.
Source: FT.com
Copper Tumbles Most in 10 Months on Mounting European-Debt Woes
September 19, 2011-Copper futures tumbled the most in 10 months on speculation that Europe’s escalating debt woes will hinder the global economy, eroding demand for industrial metals.
European manufacturing contracted in September for the second straight month, economists said before a report on a purchasing-managers index this week. Europe’s economy is cooling as governments extend spending cuts to narrow budget deficits. In China, home prices in all 70 cities monitored rose for the first time this year, the statistics bureau said yesterday.
Source: Bloomberg Business Week
Growth Spillover Dynamics from Crisis to Recovery-IMF Working paper
September 19, 2011--Summary: Can positive growth shocks from the faster-growing countries in Europe spill over to the slower growing countries, providing useful tailwinds to their recovery process? This study investigates the potential relevance of growth spillovers in the context of the crisis and the recovery process.
Based on a VAR framework, our analysis suggests that the U.S. and Japan remain the key source of growth spillovers in this recovery, with France also playing an important role for the European crisis countries. Notwithstanding the current export-led cyclical upswing, Germany generates relatively small outward spillovers compared to other systemic countries, but likely plays a key role in transmitting and amplifying external growth shocks to the rest of Europe given its more direct exposure to foreign shocks compared to other European countries. Positive spillovers from Spain were important prior to the 2008 - 09 crisis, however Spain is generating negative spillovers in this recovery due to a depressed domestic demand. Negative spillovers from the European crisis countries appear limited, consistent with their modest size.
view the Growth Spillover Dynamics from Crisis to Recovery -IMF Working paper
Source: IMF