Global ETF News Older than One Year
Passive investing presents a challenge for decarbonisation. Here are six projects we're backing to help change things
January 4, 2021--The Hewlett Foundation recently awarded $2.45m to 'climate-forward' passive asset management. Marilyn Waite explains why.
With thousands of fixed-income and public equity funds on the global market, retail and institutional investors face difficulty deciphering which are climate-forward at best, and not harmful to the planet at least.
Efforts such as France's SRI label help as a first filter for what may qualify, but most funds are not aligned with decarbonisation. To make matters worse, computer algorithms are taking over asset management, and the rules are programmed to track an uninhabitable world.
Over $100trn is invested through the asset management industry. In the US, 80% of employer-sponsored retirement plans are stuck in the default allocation offered; and this default is most often a passively-managed fund that directs capital to high carbon emitting projects and companies. While at least $17trn of professionally managed funds now consider ESG factors, the incorporation of climate risk and impact is not at scale. One of the culprits preventing the decarbonisation of asset management is the use of passives, where a fund's portfolio mirrors a high-carbon market index.
Source: responsible-investor.com
A $13 Trillion Debt Bill Comes Due for Big Economies
January 4, 2021--G-7, emerging economies face biggest refinancings in decade
Central banks in pandemic-fighting mode to keep yields low
The world's biggest economies shouldering record debt burdens are about to confront an unwelcome legacy of the financial crisis: a $13 trillion debt bill.
The Group of Seven nations plus key emerging markets face the heaviest bond maturities in at least a decade, much of them borrowings to dig their economies out of the worst slump since the Great Depression. According to data compiled by Bloomberg, these governments may need to roll over 51% more debt than in 2020.
Source: bloomberg.com
Bitcoin Blasts Past $34K for First Time, Less Than 24 Hours After Blowing Through $30K
January 3, 2021--Another day, another $1,000-plus increase in bitcoin's price, bringing the leading cryptocurrency's combined gains this new year to about $5,000.
The price of bitcoin surged past $34,000 for the first time ever early Sunday morning Eastern time, extending a record-setting holiday rally and adding an immediate exclamation point to the Bitcoin Network's 12-year anniversary.
Source: coindesk.com
Global Policy Responses to Capital Flow Volatility
December 23, 2020--The COVID-19 health and economic crisis has once again focused attention on the fickleness of capital flows and the need to have an adequate policy toolkit to manage the risks that stem from these flows, while maximizing their benefits.
A virtual workshop organized by the Bank of England, Banque de France, International Monetary Fund and the Organization for Economic Co-operation and Development (OECD) highlighted risks emerging from the changing landscape of global capital flows and the need for greater international efforts to address these including by broadening the regulatory perimeter.
Source: IMF
Precious Metals Outlook: December 2020
December 23, 2020--Outlook for 2021
The background for 2021's outlook shows sentiment quite stretched in one direction. Multi-asset investors lament rich valuations in both stocks and bonds despite the potential for extensive and transformative policy changes under a new U.S. administration, which would warrant higher uncertainty discounts.
The S&P 500 Index's CAPE Ratio is double its historical mean.0F1 The CAPE ratio is a measure of stock prices divided by inflation-adjusted earnings adjusted for the economic cycle. A higher CAPE ratio means you are paying more for a stock's earnings. Bond valuations are not much better. The amount of negative-yielding sovereign bonds recently hit a new record of $17.1 trillion. It is hardly a stretch to say one of the few asset classes that could be considered "value" is commodities.
Source: Aberdeen Standard Investments
Private-Debt Funds Withstand Covid-19, but Bigger Test Comes Next Year
December 23, 2020--Funds that lend to smaller companies such as dentist offices and software makers have grown into a major part of the financial infrastructure
The riskiest corners of corporate-debt markets have escaped widespread damage from the Covid-19 economic crunch.
Some fund managers think a reckoning may still be in store in the rapidly growing universe of private lending to smaller companies.
Private debt has grown to become a major part of the financial infrastructure in the U.S. and Europe since the 2008 financial crisis, as banks reduced lending to smaller companies. It is different from other forms of lending because it is done directly from a specialist fund manager to all sorts of companies-dentists, restaurants, insurance brokers and software makers, among others-without going through either a bank or bond markets.
Source: wsj.com
Reclaiming Our World Post-2020
December 22, 2020-As 2020 draws to a close, many of us cannot wait for this annus horribilis to end. And for good reason: this year has seen more than a million and a half COVID-19 deaths; an economic collapse far greater than that of the 2008 financial crisis; a boiling-over of resentment against decades of racial and social injustice; record numbers of wildfires decimating millions of acres of pristine forests; and locust plagues of Biblical proportions.
Yet, 2020 also gives us reason for hope. The development, within a few short months, of at least three COVID-19 vaccines that promise a high degree of efficacy is nothing short of miraculous: a great triumph of medical science, technology, and yes, globalization.
Source: IMF
IOSCO seeks to help regulators address retail market conduct risks during stress events such as COVID-19
December 22, 2020--IOSCO seeks to help regulators address retail market conduct risks during stress events such as COVID-19 The Board of the International Organization of Securities Commissions today published a report that seeks to assist regulators in responding to the retail market conduct issues caused by stress events such as the current COVID-19 pandemic.
Enhancing investor protection and investor confidence in the integrity of securities markets are fundamental objectives for IOSCO.The report examines common retail misconduct risks that have arisen in the financial services industry during the pandemic and sets out measures to assist authorities in responding to this unprecedented and challenging environment.
Source: IOSCO
OSCO publishes report on education of retail investors regarding risks of crypto-asset
December 22, 2020--The Board of the International Organization of Securities Commissions today published a report that seeks to help regulators inform retail investors about the risks and characteristics of crypto-assets. Crypto-assets carry risks that retail investors may not fully understand, increasing the chance of losses on investments in these assets.
The IOSCO report titledInvestor Education on Crypto-Assets identifies an array of possible risks to investors, including such things as lack of market liquidity, volatility, partial or total loss of the invested amount, insufficient information disclosure and fraud.
SOurce: OECD
IOSCO Issues Industry Survey on Exchange-Traded Funds
December 22, 2020--The International Organization of Securities Commissions (IOSCO) has issued a Questionnaire for industry participants on Exchange-Traded Funds (ETFs). IOSCO, through its Committee 5 on Investment Management, has conducted extensive work related to ETFs since 2018.
To date, the project has considered potential investor protection, market integrity and financial stability issues related to ETFs. In doing so, IOSCO has consulted with industry stakeholders regularly, including at a Committee 5 industry roundtable on ETFs in 2018 and a joint FSB/IOSCO workshop on ETFs and Market Liquidity in June 2019.
Source: IOSCO
