Global ETF News Older than One Year
Rebuilding Together: Europe and the United States
Under Secretary for International Affairs Lael Brainard U.S. Treasury House of Finance of Goethe University Frankfurt, Germany
September 29, 2010--Auf Deutsch
Vielen Dank fuer Ihre Gastfreundschaft hier im House of Finance der Goethe-Universitaet. Es freut mich immer sehr, die Gelegenheit zu haben Deutschland zu besuchen. Ich bin in Hamburg geboren und meine Erfahrungen als Kind in Deutschland, und auch in Polen, haben mein Welt- und Wirtschafts-verstaendnis gepraegt. Ich habe am eigenen Leib erfahren, in welchem Masse dynamische Maerkte, wirtschaftliche Kooperation und politischer Wille, ein Leben veraendern und Frieden und Sicherheit befoerdern koennen
[I am always glad for the chance to visit Germany. I was born in Hamburg, and my experience growing up in Germany, and also in Poland, shaped my view of the world and economics. I saw first-hand the power of dynamic markets, economic cooperation, and political will to change lives, and underwrite peace and security.]
Those same forces are equally relevant today. Together, we surmounted the financial crisis through action that was bold, proactive, and coordinated. While action by individual countries was necessary, it would not have been decisive without coordinated action by Europe and the United States working together and with our partners in the G-20. In response to the most globally synchronized recession the world has seen, we joined together to mount the most globally coordinated response the world has known.
Crisis Response
Two years ago, the world economy was in the grips of a crisis on a scale not seen since the Great Depression. Trade was plunging by more than a third, global output was contracting at an annual rate of six percent, financial markets were frozen, and people were losing their jobs at an alarming rate.
Source: U.S. Department of the Treasury
Tightening copper supply buoys prices
September 29, 2010--The price of copper surged above $8,000 a tonne to its highest level since the financial crisis, as tightening physical supplies spurred investors to pour money into the red metal.
Analysts, producers and investors are almost unanimously bullish about the prospects for copper in the next year, with many believing the metal could rise to an all-time high above $9,000 a tonne.
Michael Jansen, metals analyst at JPMorgan said: “It looks like the Chinese will probably run down their inventory level through to year-end as much as they can, but eventually they’ll have to come back to the market and buy.”
Source: FT.com
September 2010 Monthly Preliminary Performance Report Dow Jones-UBS Commodity Indexes
September 28, 2010--The Dow Jones-UBS Commodity Index was up 7.20% for the month of September. The Dow Jones-UBS Single Commodity Indexes for Sugar, Corn and Cotton had the strongest gains with month-to-date returns of 28.50%, 18.78%, and 15.93%, respectively. The three most significant downside performing single commodity indexes were Feeder Cattle, Natural Gas and Live Cattle, which were down 5.02%, 3.35%, and 1.86% respectively, in September.
Year to date, the Dow Jones-UBS Commodity Index is up 0.75% with the Dow Jones-UBS Tin Sub-Index posting the highest gain of 38.44% so far in 2010. Dow Jones-UBS Natural Gas Sub-Index has the most significant downside YTD performance, down 37.13%.
Source: Mondovisione
FTSE Announces Launch of FTSE Diversification Based Investing Index Series
September 28, 2010--– FTSE Group (“FTSE”), the award winning global index provider, and QS Investors, LLC, an independent investment firm providing asset management and advisory services to institutional clients, today jointly announce the launch of the FTSE Diversification Based Investing (DBI) Index Series. The indexes are alternatively weighted to promote diversification across countries and industry sectors. They seek higher absolute and risk-adjusted returns compared to market cap-weighted indexes with less downside risk.
The FTSE DBI Index Series is currently made up of three indexes, including the:
FTSE DBI Developed Index
FTSE DBI Developed ex US Index
FTSE DBI Developed ex Japan Index
The investment philosophy behind the FTSE DBI Index Series is that both geography and industry are the primary drivers of global equity risk and return; and that market sentiment can lead to momentum effects, causing concentration risk in market-cap weighted indexes. A diversified portfolio helps to avoid this concentration risk and lessens downside risk. Using a transparent, rules-based formula, the indexes diversify exposure by re-weighting countries and industries to avoid concentration risk and momentum effects. Risk assessment will occur annually and index rebalancing will occur quarterly.
Source: FTSE
New Report * ETF Landscape Industry Review August 2010
September 28, 2010--At the end of August 2010 the global ETF industry had 2,308 ETFs with 4,922 listings, assets of US$1,061.9 Bn, from 129 providers on 43 exchanges around the world.
Additionally, there were 874 other Exchange Traded Products (ETPs) with 1,439 listings and assets of US$135.0 Bn from 48 providers on 20 exchanges.
YTD assets have increased by 2.5% from US$1,036.0 Bn to US$1,061.9 Bn, compared to the 7.5% decrease in the MSCI World Index in US dollar terms.
The top 100 ETFs, out of 2,308, account for 63.4% of global ETF while 389 ETFs have less than US$50.0 Mn in assets and 483 ETFs have less than US$10.0 Mn in assets.
YTD the number of ETFs increased by 18.7% with 401 new ETFs launched, while 38 ETFs were delisted.
The number of ETFs listed in Europe surpassed the US in April 2009, now with 985 ETFs listed in Europe, compared to 871 in the US at the end of August 2010.
There are currently plans to launch 944 new ETFs.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Retirement Shunned by 'Nevertiree' Wealthy, Says New Global Report
60% of global high net worth individuals say they will 'never' retire
High Net Worth Individuals Exhibit Case of Retirement Jitters
Actuality of Retirement Doesn't Always Match Aspirations
September 27, 2010--Retirement is being rejected by a new breed of wealthy workers – the 'Nevertirees' - who want to carry on working for as long as they are able, says Barclays Wealth in its latest Insights report, The Age Illusion: How the Wealthy are Redefining Their Retirement.
Sixty percent of wealthy individuals polled in a global survey say that they plan to become a Nevertiree, shunning traditional retirement, instead continuing to work, start businesses and take on new projects in their later years.
The report, the 12th in the Barclays Wealth Insights series, is based on a survey of more than 2,000 high net worth individuals, who were asked to consider what retirement and later life means to them.
The findings show that the concept of nevertirement is expected to grow over the coming decades, with over 70% of respondents under the age of 45 saying that they will always be involved in some form of work.
Emerging markets such as Saudi Arabia (92%), United Arab Emirates (91%) and South Africa (89%) illustrated the biggest desire to keep on working in later life, however the concept is also popular in developed economies with the U.S. (54%), and the U.K. (60%) showing a desire to carry on working. Switzerland (34%), Spain (44%) and Japan (46%) are the most likely to want a conventional retirement.
In particular, 75% of U.S. respondents plan to work part time after they have stopped working permanently, seven percent more than the global average. Specifically, 32% plan to work between five and 20 hours per week in "retirement", and seven percent plan to work more than 20 hours per week.
Matt Brady, Head of Wealth Advisory, Americas at Barclays Wealth says: "This represents a step change for wealthy people. While previous generations looked to create their wealth early on in life with a view to enjoying it when they retired, this report reflects a different attitude, with people wanting to continue to challenge themselves well beyond the traditional retirement age. Indeed, many Nevertirees prefer to be actively engaged and challenged and are not bound by their age with regards to continuing their working life."
While the majority of wealthy expect retirement will mean being involved in some type of work, attitudes are also shifting in terms of when to retire. For 63% of U.S. wealthy, "simply reaching the normal age to retire" is not at all important in determining when they stop working.
Source: Barclays Wealth
Developing Countries Come to the Global Economy’s Rescue
They account for half of global growth and will surpass economic size of developed nations by 2015
September 27, 2010--While the rich world puts its house in order, developing countries are becoming a new engine of global growth and a pulling force for advanced economies, says a new book by World Bank economists.
According to The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World, almost half of global growth is currently coming from developing countries. As a group, it is projected that their economic size will surpass that of their developed peers in 2015.
“Developing countries have come to the global economy’s rescue,” said Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management (PREM), and co-editor of the book. “They are the new locomotives of growth which will move global growth forward while high-income countries remain stagnant.”
According to the publication, growth in developing countries is estimated to reach 6.1 percent in 2010, 5.9 percent in 2011, and 6.1 percent in 2012, while corresponding figures are 2.3 percent, 2.4 percent, and 2.6 percent for high-income countries. These diverging growth prospects continue in the medium term. Five factors account for it: faster technological learning, larger middle- classes, more South-South commercial integration, high commodity prices, and healthier balance sheets that will allow borrowing for infrastructure investment.
“The economic horizon of the developing world is promising,” said Marcelo Giugale, World Bank’s Director for Poverty Reduction and Economic Management in the Latin America and Caribbean Region, and co-editor of the study. “The rebalancing of global growth toward a multiplicity of engines will give the developing countries new relevance. It will also change their policy agendas: on average, economic management will be stronger, governments will be better, and the beginning of the end of poverty will be within reach.”
view The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World
Source: World Bank
Top 25 Financial Sectors to Get Mandatory IMF Check-Up
Stability part of voluntary Financial Sector Assessment Program now mandatory
25 biggest, most interlinked financial sectors to get IMF review every five years
Decision strengthens, integrates IMF’s financial, economic surveillance
September 27, 2010--Economies with financial sectors that have the greatest impact on global financial stability are now required to undergo in-depth reviews of their financial health by the International Monetary Fund every five years.
The landmark decision by the IMF’s Executive Board on September 21 converts the financial stability component of the voluntary Financial Sector Assessment Program (FSAP) into a mandatory part of the IMF’s surveillance for the world’s top 25 financial sectors.
The global economic crisis laid bare the devastating economic consequences a financial crisis in one country can have on the global economy. This decision is a concrete step toward strengthening the IMF’s surveillance of those members whose financial sectors could have the biggest potential impact on global stability. It is one of the key steps taken by the Fund to modernize its surveillance mandate and modalities in light of the recent crisis, and is consistent with the commitment made by the leaders of the Group of 20 advanced and emerging economies at the Washington Summit in November 2008 to subject their financial sectors to greater scrutiny.
Source: IMF
Towards investment clarity on controversial weapons
Could non-compliance with prohibition of controversial weapons be a problem for institutional investors?
September 27, 2010--In 2004, Belgium was the first country to introduce legislation explicitly prohibiting the financing of anti-personnel mines, a weapon banned under the 1997 Mine Ban Treaty. Since then, Belgium has progressively extended its prohibition to cover other controversial weapon categories, including cluster munitions, ahead of the signing of the international Convention on Cluster Munitions in late 2008, and depleted uranium ammunition.
A proposal to extend the prohibition to also cover incendiary weapons with white phosphorus is now under discussion. However, the Belgian government has provided little guidance to investors regarding what is required to be in compliance with the law. Similar financing prohibitions are being discussed across Europe, with Ireland and Luxembourg having already introduced financing prohibitions on anti-personnel mines and cluster munitions. Also, a significant number of investors have taken action to address concerns regarding controversial weapons.
Source: Responsible Investor
S&P launches website to help pension funds better understand ratings process
September 24, 2010--Standard & Poor's has launched a website to help pension funds and plan sponsors better understand how the company arrives at its ratings.
The free website provides articles, videos, podcasts and educational guides on what credit ratings are – "and what they are not" – the processes by which S&P produces ratings and how those ratings have performed over time.
Over the last two years, investors have consistently called for more transparency about how S&P determines its ratings, according to Bruce Schachne, vice-president of market development.
Source: IP&E
