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BlackRock New Report ETF Landscape Emerging Markets Industry Review: November 2010
November 24, 2010--The use of ETFs and ETPs for emerging markets exposure have always been very useful and popular for many investors since it is often difficult to achieve exposure directly in many emerging and frontier markets such as Korea and Taiwan, without foreign investor status due to a limited selection of available futures contracts offering emerging and frontier market exposure.
At the end of August 2010, there were 450 ETFs/ETPs providing exposure to various emerging markets indices with 869 listings, assets of US$193.5 Bn from 94 providers on 38 exchanges in 32 countries.
YTD, ETFs/ETPs providing exposure to emerging and frontier market indices have seen net inflows of US$30.5 Bn, with US$27.9 Bn of net new assets going into emerging and frontier market equity ETFs/ETPs, of which US$18.7 Bn went into broad emerging market equity ETFs/ETPs and US$5.7 Bn into ETFs/ETPs tracking Chinese equity indices.
In comparison, for the full year 2009, ETFs/ETPs providing exposure to emerging and frontier markets had net inflows of US$24.8 Bn, with US$23.2 Bn going into ETFs/ETPs tracking emerging and frontier equity indices, of which US$9.6 Bn went into ETFs/ETPs tracking broad emerging/frontier market equity indices and US$6.5 Bn into ETFs/ETPs tracking Chinese equity indices.
The array of ETFs/ETPs now available to track emerging markets benchmarks has grown significantly, such that an investor can now access every MSCI emerging market country except the Czech Republic and Morocco.
Emerging markets has been one of the markets where we've seen innovation in ETF/ETP structures such as allowing for exposure to India and China A share indices. We expect to see continued growth in the use of these products, as well as emerging market and frontier market exposures availability.
Note: Flow data for many emerging market ETFs is only available 6 weeks after month end via the Simfund global mutual fund database, end of August 2010 data was the latest available when the analysis was produced.
BNY Mellon Asset Management Goes Live On Calastone’s Fund Transaction Network
November 24, 2010--BNY Mellon Asset Servicing has gone live with Calastone's connection to the network to offer full mutual fund processing STP for its UTAS mutual fund clients.
Through this connectivity, BNY Mellon's end clients can reap STP efficiencies and benefit from Calastone's global mutual fund community in addition to the efficiencies that will be provided by their settlement offering.
Calastone said that its independent cross-border transaction network services provides electronic message automation to help clients improve their account opening, re-registration, creation and liquidation, switching, settlement, reconciliation, cash reporting or any associated funds messaging processes.
Inequality, Leverage and Crises-IMF Working Paper
November 24, 2010--The paper studies how high leverage and crises can arise as a result of changes in the income distribution. Empirically, the periods 1920-1929 and 1983-2008 both exhibited a large increase in the income share of the rich, a large increase in leverage for the remainder, and an eventual financial and real crisis.
The paper presents a theoretical model where these features arise endogenously as a result of a shift in bargaining powers over incomes. A financial crisis can reduce leverage if it is very large and not accompanied by a real contraction. But restoration of the lower income group's bargaining power is more effective.
view Inequality, Leverage and Crises-IMF Working paper
Dow Jones Sustainability Index expanded to cover 20% of world index
Move follows split from STOXX earlier this year
November 23, 2010--SAM, the Swiss sustainability fund manager, and Dow Jones Indexes, are to broaden out their joint global sustainability index product, with the launch of the Dow Jones Sustainability World Enlarged Index on November 30.
The new index will increase the number of component companies to 20% (513 comanies) of the largest 2,500 companies in the Dow Jones Global Total Stock Market Index. The existing DJSI World Index, which was launched in 1999, covers 10% of the global universe, or around 300 companies. The new index will be reviewed annually and weighted according to free float market capitalization. It will have a subset index of 459 components that excludes tobacco, alcohol, gambling,
Understanding Financial Interconnectedness-IMF Working paper
November 23, 2010--Summary:
This paper seeks to advance our understanding of global financial interconnectedness by (i) mapping aspects of the architecture of global finance and (ii) investigating critical fault lines related to interconnectedness along which systemic risks were built up and shocks transmitted in the crisis.
It thus takes initial steps toward operationalizing enhanced financial sector and macro-financial surveillance called for by the IMF’s Executive Board and by experts such as de Larosiere et al. (2009). Getting a better handle on interconnectedness would strengthen the Fund‘s ability, together with the Financial Stability Board, to track systemic risk concentrations. It would also inform spillover and vulnerability analyses, and sharpen bilateral and multilateral surveillance.
view Understanding Financial Interconnectedness-IMF Working paper
November 2010 “Market’s Measure” Preliminary Report - A Monthly Report From Dow Jones Indexes On The Performance Of U.S., European, Asia And Other Global Stock Market Indexes
November 23, 2010--Dow Jones Industrial Average Posts 0.54% Gain in November, European Stocks Lose 1.47%, Asia Rises 2.27% and World Equities Rise by 0.08%
Automobiles & Parts Sector Posts Biggest Gain for November in Worldwide
Financials Sector Takes the Hardest Hit for November in Europe
As of November 22, the Dow Jones Industrial Average rose 0.54% in November, closing at 11178.58. Stock market indexes in Europe fell while Asia and globally indexes were up in November, according to preliminary monthly figures from global index provider, Dow Jones Indexes.
The Dow Jones Industrial Average rose 0.54% in November, closing at 11178.58. Year-to-date, the index is up 7.20%.
The Dow Jones Europe Index fell 1.47% in November to 265.48. So far this year, the index is up 0.47%.
The Dow Jones Asian Titans 50 Index rose 2.27% in November to 138.78. So far this year, the index is up 3.36%. •The Dow Jones Global Titans 50 Index rose 0.08% in November, closing at 170.86. Year-to-date, the index is down 1.61%.
Quarterly National Accounts - GDP Growth - Third Quarter 2010, OECD
November 22, 2010--OECD GDP growth slows to 0.6% in the third quarter of 2010
Gross domestic product (GDP) in the OECD area grew by 0.6% in the third quarter of 2010. This marks the sixth consecutive quarter of growth, but is down on the 0.9% recorded in the second quarter.
Euro area and European Union GDP grew by 0.4%, down from the 1.0% recorded in the previous quarter. At 0.7%, growth in Germany remained relatively robust but this was still sharply down on the record 2.3% growth recorded in the previous quarter. GDP growth also slowed in France (0.4%), Italy (0.2%) and the United Kingdom (0.8%). Growth rates accelerated in Japan (0.9%) and, marginally, in the United States (0.5%), compared to the previous quarter.
Relative to a year earlier, GDP in the OECD area expanded by 3.1%, the same rate as in the previous quarter.
Physical commodities draw scrutiny
November 22, 2010--Regulators are to examine trading in some of the biggest physical commodity markets, where actual raw materials such as oil change hands, expanding efforts to overhaul their oversight of derivatives.
In contrast to financial commodities markets, which are tightly scrutinised by national watchdogs, the global physical market is largely unregulated. The industry relies on common law and on private pricing agencies for price discovery.
November 2010 Monthly Preliminary Performance Report Dow Jones-UBS Commodity Indexes
November 22, 2010--The Dow Jones-UBS Commodity Index was down 1.47% for the month of November. The Dow Jones-UBS Single Commodity Indexes for Silver, Feeder Cattle and Lean Hogs had the strongest gains with month-to-date returns of 10.64%, 5.96%, and 5.58%, respectively. The three most significant downside performing single commodity indexes were Zinc, Corn and Sugar, which were down 11.15%, 10.31%, and 10.20% respectively, in November.
Year to date, the Dow Jones-UBS Commodity Index is up 4.25% with the Dow Jones-UBS Cotton Sub-Index posting the highest gain of 68.29% so far in 2010. Dow Jones-UBS Natural Gas Sub-Index has the most significant downside YTD performance, down 42.22%.
Private Equity Faces Fund-Raising Crunch
November 19, 2010--Wall Street Journal reports, private equity is in a tight spot. Buyout firms are sitting on $450 billion in uncommitted capital they raised before the financial crisis. Now, they are rushing to spend it before the cash must be returned to investors.
That is driving up the cost of making new investments at a time when debt still is scarce. That could make life difficult for the many firms hoping to raise new funds in 2011 after a three-year break.