Global ETF News Older than One Year
The Human Cost of Recessions: Assessing It, Reducing It-IMF position paper
November 11, 2010--Introduction
Recessions leave scars on the labor market; the Great Recession of 2007–09 has left gaping wounds. Over 200 million people across the globe are estimated to be unemployed at present.
Among countries with unemployment data in the IMF’s World Economic Outlook (WEO) database, there has been an increase of over 20 million unemployed people since 2007. The ILO estimates
that globally the increase is over 30 million.
As shown in the left panel of Figure 1, three-fourths of this increase in the number of unemployed people occurred in the “advanced” economies (the term used in the WEO to denote high per capita income countries) and the remainder among emerging market economies. The unemployment rate increased by 3 percentage points in advanced countries since 2007 and by 0.25 percentage points in emerging markets (Figure 1, right panel). In contrast, in low-income countries (LIC) on the whole, unemployment fell during the Great Recession.
Source: IMF
Private equity sees "buckets of money" in water buys
November 10, 2010--Water scarcity will generate big returns for the irrigation sector once climate change and population growth take their toll on farming, private equity managers said on Tuesday.
Asked at an agriculture investing conference whether it is possible to make money from water, typically a public good rather than a bankable commodity, Judson Hill of NGP Global Adaptation Partners was unequivocal.
"Buckets, buckets of money," he told the meeting of bankers and investors in Geneva, a leading European hub for commodity trading. "There are many ways to make a very attractive return in the water sector if you know where to go."
Source: Reuters
The Role of Independent Research and Brokerage
November 10, 2010--The online report where institutional investors examine the role of unbiased independent research and brokerage services in a risk controlled investment strategy as well as the state of the marketplace today.
As a result of both the ‘Dotcom Boom' of 2002 and the more recent ‘Financial Crisis', the sourcing of research for investment purposes has been scrutinised in depth with institutional investors questioning if the advice they receive and brokerage services they use are truly serving their needs instead of that of a third party.
As institutional investments demand higher quality research and brokerage services under strict investment governance guidelines, the independent research and brokerage sector is stepping into the limelight. Priding itself on offering an unbiased approach to trading and investment whilst providing a high quality and rapid service the sector is going through it's own boom period.
'The Role of Independent Research and Brokerage' is the first report of its type where institutional investors will discuss the key issues in working with the independent sector and overcoming challenges they face.
download The Role of Independent Research and Brokerage report
Source: Clear Path Analysis
Emerging from the Global Crisis—Macroeconomic Challenges Facing Low-Income Countries
November 10, 2010--On November 1, 2010, the Executive Board of the International Monetary Fund met to discuss macroeconomic challenges facing low-income countries as they exit from the global crisis.
Background
Low-income countries (LICs) were more resilient during the global crisis than in past downturns. The impact of the crisis was severe, but economic growth stayed positive in two-thirds of LICs, in contrast to richer countries. Growth was supported by a robust countercyclical domestic policy response—a first for LICs and in contrast to past crises when the fiscal stance was typically tightened. Pre-crisis macroeconomic policy buffers, built mainly over the past decade, had created space in many countries for this countercyclical response. To help low-income countries navigate the crisis, the IMF sharply scaled up its liquidity support, reformed its concessional instruments, and endorsed adaptations in program design to accommodate the countercyclical responses, including continued real growth in expenditures.
Source: IMF
World Bank-UN Report Charts Path to Prevent Death and Destruction from Natural Hazards
November 11, 2010 – A new joint report from the World Bank and the United Nations says that annual global losses from natural disasters could triple to $185 billion by the end of this century, even without calculating the impact of climate change. Climate change could then add $28-$68 billion more in damages each year from tropical cyclones alone. The report also says that the number of people exposed to storms and earthquakes in large cities could double to 1.5 billion by 2050.
The 250-page report, Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention, was released in Washington. Targeted directly at the world's finance ministers, it stresses that “prevention pays but you do not always have to pay more for prevention”.
The report outlines a number of measures to prevent death and destruction from natural hazards such as earthquakes, hurricanes, and flooding. These measures are almost stunning in their simplicity and common-sense approach. For example, governments can make information about hazards and risks easily accessible. Providing land titles reduces the possibility of eviction or demolition, and encourages individuals to invest in safer structures. Removing rent controls restores incentives for landlords to maintain buildings. And, reorienting existing public spending to prioritize day-to-day operations and maintenance – mending pot-holes, painting steel bridges, keeping drains clear –would increase prevention. Undertaking these measures does not necessarily require governments to spend more, says the report, but to spend better.
view Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention report
Source: World Bank
BlackRock New Report ETF Landscape Industry Highlights, End of October 2010
November 9, 2010--Below are the ETF Landscape industry highlights as at end October 2010.
United States ETF and ETP Industry end October 2010:
The United States ETF industry had 887 ETFs, assets of US$830.9 Bn, from 28 providers on two exchanges.
In October 2010, United States domiciled ETFs/ETPs experienced net inflows totalling US$13.2 Bn. Equity ETFs/ETPs saw US$10.3 Bn net inflows, of which US$7.5 Bn went into Emerging market equity ETFs/ETPs and US$2.2 Bn into North American equity ETFs/ETPs.
Fixed income ETFs/ETPs saw net inflows of US$1.9 Bn, of which US$1.1 Bn went into government bond ETFs/ETPs and US$0.3 Bn into high yield ETFs/ETPs. Commodity ETFs/ETPs experienced US$0.01 Bn net outflows, of which energy ETFs/ETPs saw net outflows of US$0.12 Bn, while US$0.13 Bn went into industrial metals ETFs/ETPs in October 2010.
In October 2010, United States domiciled ETFs experienced net inflows totalling US$11.8 Bn. Vanguard gathered the largest net inflows with US$5.2 Bn, followed by iShares with US$3.2 Bn net inflows, while ProShares saw US$0.6 Bn net outflows in October 2010.
YTD US$47.0 Bn NNA flows into United States domiciled equity ETFs/ETPs is greater than the US$36.5 Bn for all of 2009. NNA flows into emerging market equity ETFs/ETPs are US$27.0 Bn YTD, in line with the US$27.0 Bn in 2009 and North American ETFs/ETPs are greater at US$14.6 Bn YTD versus US$2.0 Bn in 2009. Fixed income ETF/ETP NNA is US$31.5 Bn YTD versus US$44.8 Bn for 2009 and NNA going into commodity ETFs/ETPs is down significantly from US$32.5 Bn in 2009 to US$8.9 Bn YTD.
Global ETF and ETP Industry end October 2010:
The global ETF industry had 2,409 ETFs with 5,335 listings, assets of US$1,239.0 Bn, from 130 providers on 46 exchanges around the world.
The global ETF and ETP industry combined had 3,404 products with 6,907 listings, assets of US$1,392.6 Bn from 160 providers on 50 exchanges around the world.
European ETF and ETP Industry end October 2010:
The European ETF industry had 1,048 ETFs with 3,512 listings, assets of US$274.1 Bn, from 37 providers on 22 exchanges.
In October 2010, net new assets into European domiciled ETFs/ETPs totalled US$7.9 Bn. Equity ETFs/ETPs gathered US$6.2 Bn net inflows, of which US$2.3 Bn went into emerging markets equity ETFs/ETPs and US$2.4 Bn into European equity ETFs/ETPs. Fixed income ETFs/ETPs saw net inflows of US$1.4 Bn, of which US$0.7 Bn went into money market ETFs/ETPs while government bond ETFs/ETPs saw net outflows of US$0.1 Bn. Commodity ETFs/ETPs saw net inflows of US$0.2 Bn, of which US$0.3 Bn went into broad commodity exposure ETFs/ETPs while energy ETFs/ETPs saw net outflows of US$0.1 Bn.
In October 2010, net new assets into European domiciled ETFs totalled US$7.9 Bn. iShares has received the largest net inflows with US$2.8 Bn, followed by db x-trackers with US$2.5 Bn net inflows, while Swiss & Global Asset Management had the largest net outflows with US$0.1 Bn.
Canada ETF and ETP Industry end October 2010:
The Canadian ETF industry had 154 ETFs, assets of US$35.7 Bn, from four providers on one exchange.
Asia Pacific ex-Japan ETF and ETP Industry end October 2010:
The Asia Pacific (ex-Japan) ETF industry had 188 ETFs with 293 listings, and assets of US$55.1 Bn from 56 providers on 13 exchanges.
Japan ETF and ETP Industry end October 2010:
The Japanese ETF industry had 77 ETFs with 80 listings and assets of US$30.5 Bn from six providers on two exchanges.
Latin America ETF and ETP Industry end October 2010:
The Latin American ETF industry had 26 ETFs with 353 listings, and assets of US$10.7 Bn from four providers on three exchanges.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Recent policy moves a start, but much stronger action is needed to accelerate the transformation of the global energy system, says the IEA’s latest World Energy Outlook
November 9, 2010--“The Copenhagen Accord and the agreement among G20 countries to phase out subsidies are important steps forward. But, these moves still fall a very long way short of what is required to set us on the path to a truly sustainable energy system”, said Nobuo Tanaka, Executive Director of the International Energy Agency today in London at the launch of the latest edition of the IEA’s annual World Energy Outlook (WEO).
“The energy world is facing unprecedented uncertainty”, Mr Tanaka said. The strength of the economic recovery holds the key to how energy markets will evolve over the next few years. But WEO-2010 demonstrates that it is what governments do, and how that action affects technology, the price of energy services and end-user behaviour, that will shape the future of energy in the longer term. “We need to use energy more efficiently and we need to wean ourselves off fossil fuels by adopting technologies that leave a much smaller carbon footprint”.
The central scenario in this year’s Outlook – the New Policies Scenario – takes account of the broad policy commitments and plans that have been announced by countries around the world. “We have taken governments at their word, in assuming that they will actually implement the policies and measures, albeit in a cautious manner, to ensure that the goals they have set are met” said Mr Tanaka. In that scenario, world primary energy demand increases by 36% between 2008 and 2035, or 1.2% per year on average. The assumed policies make a tangible difference to energy trends: demand grew by 2% per year over the previous 27-year period.
view WEO-2010 special early excerpt: Energy Poverty: How to make modern energy access universal
Source: International Energy Agency
Emerging countries become Eldorado for Spanish banks
November 8, 2010--Big Spanish banks are showing more interest in emerging countries like Turkey and Poland by acquiring or buying a stake in national banks.
According to Spanish daily El Pais on Monday, emerging countries are becoming Eldorados (golden countries) for Spanish banks, stating that Santander and Banco Bilbao Vizcaya Argentaria (BBVA) are looking for investments in emerging countries to compensate for the losses they have been experiencing at home.
Source: Todays Zaman
Composite Leading Indicators (CLIs), OECD, November 2010
November 8, 2010--OECD composite leading indicators (CLIs) for September 2010 point to diverging patterns of economic growth across major economies.
The CLIs show signs of continuing expansion in Germany, Japan, the United States and Russia, while pointing to a moderate downturn in Canada, France, India, Italy and the United Kingdom.
The CLIs for Brazil and China continue to point strongly downwards, edging below the long term trend and implying that the level of industrial production will fall below its longer-term trend in these two economies.
Source: OECD
Structural Breaks in Fiscal Performance: Did Fiscal Responsibility Laws Have Anything to Do with Them? IMF Working paper
November 8, 2010--In recent years, many countries have adopted Fiscal Responsibility Laws to strengthen fiscal
institutions and promote fiscal discipline in a credible, predictable and transparent manner. Still, results on the effectiveness of these laws remain tentative. In this paper, we test
empirically whether fiscal performance, measured as the level of primary fiscal balances and their volatility, indeed improved after the implementation of Fiscal Responsibility Laws in a
sample of Latin American and advanced economies.
We show that traditional econometric approaches, which rely on the use of dummies in time series or panel regressions, yield biased estimates. In contrast, our empirical strategy recognizes that, a priori, the timing of the effect of these laws on fiscal performance is unknown, while controlling for the impact of the business and commodity cycles on fiscal outcomes. Overall, we find limited empirical evidence in support of the view that Fiscal Responsibility Laws have had a distinguishable effect on fiscal performance. However, Fiscal Responsibility Laws could still have other positive effects on the conduct of fiscal policy not analyzed here, for instance, through enhanced transparency and guidance in the budget process and lower risk premia.
Source: IMF
