Global ETF News Older than One Year
Gold retreats from new record high
April 15, 2011--Gold prices steadied off record highs in Europe on Friday and silver edged back below $42 an ounce as a decision by rating agency Moody's to cut Ireland's debt rating to just above junk pressured the euro.
The metal earlier hit a record high and silver a 31-year peak as the dollar index fell to 16-month lows, with inflation concerns, worries over unrest in North Africa, and expectations US interest rates will stay low also supporting gold.
Source: miningmx
Overheating, Inflation Threatens Region’s Economic Success
April 14, 2011--- It is no secret now that Latin America is one of the world's best performing regional economies with growth averages that almost double the rates in high income countries.
After leaving behind a global economic crisis that bruised many around the world but did not inflict major trauma on the region's economies, Latin America is on a path to achieving 4-5 rate percent annually, similar to the East Asia Tigers. Meanwhile inflation rates are expected to remain below the two-digit mark, between 6 and 7 percent.
But its own success may be creating the conditions for future difficulties, according to a report on the region's economic outlook, presented at the World Bank's headquarters to a global audience via the Bank's social networks.
view the report-Latin America and the Caribbean's Success Put to the Test
Source: World Bank
Brics eye global monetary reform
April 14, 2011-The five Brics nations discussed reform of the international monetary system at a meeting in southern China on Thursday, but steered clear of the contentious topic of the Chinese exchange rate, a senior Chinese official said.
Wu Hailong, an assistant Chinese foreign minister, said the leaders of Brazil, Russia, India, China and South Africa had also discussed the composition of the Special Drawing Right, the International Monetary Fund’s unit of account.
Source: FIN24
Base-Metal ETFs May Attract Less Interest Than Gold, BlackRock’s Fuhr Says
April 13, 2011--Exchange-traded funds for base metals are unlikely to attract as much demand as those for gold and silver, according to Deborah Fuhr, head of ETF research at BlackRock Inc. (BLK), which is planning a product backed by copper.
“I don’t expect them to be as popular as gold and silver, that’s my personal view,” said Fuhr, who’s led the ETF research team at the world’s largest asset manager since September 2008. Caroline Hancock, a BlackRock spokeswoman, declined comment, citing regulatory constraints as the New York-based company applies for the copper-backed exchange-traded fund, or ETF.
Commodity-backed funds and products have proved popular with investors seeking to diversify their portfolios as prices for metals, grains and energy gain on increased demand. They enable buyers to invest in commodities without taking physical delivery of them. Gold held in exchange-traded products climbed to 2,050.33 metric tons yesterday, from 12 tons in 2003, when Bloomberg started data tracking such holdings.
Source: Bloomberg
Global Financial Stability Report Durable Financial Stability: Getting There from Here
April 13, 2011--The Global Financial Stability Report provides semiannual assessments of global financial markets and addresses emerging market financing in a global context.
Global financial stability has improved over the past six months, bolstered by better macroeconomic performance and continued accommodative macroeconomic policies (see the April 2011 World Economic Outlook), but fragilities remain. The two-speed recovery—modest in advanced economies and robust in emerging market economies—has posed different policy challenges for countries.
Source: IMF
Currency wars fade as inflation hits emerging world
April 13, 2011--One by one, the countries of the emerging world are loosening the shackles with which they tried to prevent their currencies from appreciating.
It is not that they care less about export competitiveness than they did even a few weeks ago. It’s that they now care more, much more, about inflation. And with rising prices of commodities, especially food and oil, stoking inflation, officials are deciding that allowing a currency to appreciate is a good way to relieve the pressure.
Source: FT.com
Market structures and systemic risks of exchange-traded funds
April 13, 2011--Abstract:
Crisis experience has shown that as the financial intermediation chain lengthens, it becomes complicated to assess the risks of financial products due to a lack of transparency as to how risks are managed at different levels of the intermediation chain. Exchange-traded funds, which have become popular among investors seeking exposure to a diversified portfolio of assets, share this characteristic, especially when their returns are replicated using derivative products. As the volume of such products grows, such replication strategies can lead to a build-up of systemic risks in the financial system.
This article examines the operational frameworks of exchange-traded funds and identifies potential channels through which risks to financial stability can materialise.
Source: BIS
FSB publishes note on Shadow Banking
April 12, 2011--The Financial Stability Board (FSB) published on 12 April a note entitled Shadow Banking: Scoping the Issues.
This note provides information on the work of the FSB to develop recommendations to strengthen the oversight and regulation of the shadow banking system. This work is taking place through a task force that will develop initital recommendations for discussion that will:
clarify what is meant by "the shadow banking system";
set out potential approaches for monitoring the shadow banking system; and
explore possible regulatory measure to address the systemic risk and regulatory arbitrage concerns posed by the shadow banking system.
The FSB welcomes comments from the public on this note by 16 May 2011.
view the Shadow Banking: Scoping the Issues.
Source: The Financial Stability Board (FSB)
US Financial Crisis Was "Avoidable" US Inquiry Commission Tells MEPs
April 12, 2011--The findings of the US Financial Crisis Inquiry Commission were presented by its chairman Phil Angelides to the European Parliament's Financial, Economic and Social Crisis Committee on Monday afternoon. MEPs found its account of the causes of the crisis plausible, and stressed the need for EU-US co-operation to help overcome it.
"How did it come to pass that in 2008 we were forced to choose between two stark and painful alternatives - either risk the total collapse of our financial system and economy - or inject trillions of taxpayers dollars into the system and into private companies - even as millions of people still lost their jobs, their savings and their homes?" asked US Financial Crisis Inquiry Committee Chairman Phil Angelides, before outlining a serious of failures that led to the collapse.
The US Commission's final report, presented on 27 January, concluded that the crisis was "avoidable". Its causes included "widespread failures" in financial regulation and supervision as well as in corporate governance and management, which allowed the formation of an "explosive brew of excessive borrowing, risky investments and lack of transparency". The crisis itself was triggered by "breaches in accountability and ethics", but key policy makers were clearly "ill prepared" for it.
Source: European Parliament
NASDAQ-100 Index to Undergo a Special Rebalance on Monday, May 2, 2011
April 12, 2011--This year marks the 40th anniversary of The NASDAQ Stock Market and its flagship index, the NASDAQ Composite (COMP). Upon launch in 1971, the Composite tracked 2,048 securities listed on NASDAQ with a base value of 100.00.
Today, the Composite measures 2,662 NASDAQ domestic and international-based common type stocks. On its 40th anniversary on February 8th, the Composite closed at a value of 2,797.05, representing a 2,697.05% return since 1971. Because of its broad reach, the Composite is one of the most widely followed and quoted major market indexes.
GIG’s Harry Tutwiler, Vice President, has been involved with the Composite since its inception. Harry began his career with NASDAQ in 1971 and has watched the index world grow over the last 40 years. “The big inflection point was the adoption of indexes as a portfolio management tool, as opposed to being just a benchmarking tool,” Harry said. “Our indexes had always been just a gauge for measuring market performance, but what we suddenly found was that people were calling us and had an interest in licensing and tracking the Index. With the simultaneous evolution of Efficient Market Theory and Modern Portfolio Theory the research suggested that, not only was picking winners in an active investment strategy extremely difficult, but picking winners was unnecessary. Voila… passive investment through index tracking provided the winning investment strategy."
Source: NASDAQ OMX
