Global ETF News Older than One Year
Glaciers of Global Finance: The Currency Composition of Central Banks' Reserve Holdings
December 15, 2020--The currencies that are being held by central banks as foreign exchange reserves have remained largely steady over decades. Changes in the composition of these holdings can, at best, be described as glacial in pace.
But geopolitical shifts and technological revolutions are reshaping the global economy and the international use of currencies. These forces, and the fallout from the COVID-19 pandemic, could further accelerate the transformations in the reserve holdings of central banks.
The status quo
There are currently around 180 national currencies, but only a few are widely used for international transactions, such as invoicing, paying for imports, and issuing debt or investing abroad. These currencies are the U.S. dollar, the euro, and, to a lesser extent, the Japanese yen, the British pound, and a few others. When crises hit, companies and investors usually seek safety in dollars.
Source: IMF
G20 GDP Growth-Third quarter of 2020, OECD-G20 GDP showed a strong recovery in the third quarter of 2020, but remained below pre-pandemic high
December 14, 2020--Gross domestic product (GDP) in the G20 area rebounded by 8.1% in the third quarter of 2020 following the unprecedented falls in the first half of the year due to COVID-19 containment measures. However, GDP remained 2.4% below its pre-crisis high of the final quarter of 2019.
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Among the G20 economies, GDP in India rebounded strongest, by 21.9%, following a fall of 25.2% in the second quarter, the sharpest drop ever recorded.
GDP also rebounded with double-digit numbers in the third quarter, after double-digit falls in the second quarter, in France (by 18.7%, following a contraction of (minus) 13.8%), Italy (by 15.9%, after minus 13.0%), Turkey (by 15.6%, after minus 10.8%), United Kingdom (by 15.5%, after minus 19.8%), South Africa (by 13.5%, after minus 16.6%) and Mexico (by 12.1%, after minus 17.0%). GDP also grew in the other major economies: 8.9% in Canada; 8.5% in Germany; 7.7% in Brazil; 7.4% in the United States; 5.3% in Japan; 3.3% in Australia; 3.1% in Indonesia; 2.7% in China; 2.1% in Korea; and 1.2% in Saudi Arabia.
GDP in the G20 area as a whole remained significantly below the levels of the same quarter a year earlier (minus 2.0%), with only Turkey and China recording positive growth (of 5.4% and 4.9%, respectively), while the United Kingdom experienced the largest fall (minus 9.6%). A similar picture emerges when comparing economic activity in the third quarter with pre-pandemic levels, as approximated by the cumulative growth rate for the first three quarters of 2020.
Source: OECD
The Behavior of Fixed-income Funds during COVID-19 Market Turmoil
December 14, 2020--Summary:
This note analyzes the stress experienced (and caused) by open-end mutual funds during the March COVID-19 stress episode, with a focus on global fixed-income funds. In light of increased valuation uncertainty, funds experienced a short period of intense withdrawals while the market liquidity of their holdings deteriorated substantially.
To cover redemptions, afflicted funds predominantly shed liquid assets first-for example, cash, cash equivalents, and US Treasury securities. But forced asset sales amplified price pressures in markets and contributed to liquidity falling across fixed-income markets. This drop in market liquidity, as well as the general stress in financial markets, may have led to fund investors becoming even more sensitive to challenging portfolio performance and encouraged further withdrawals. Only after central banks intervened, directly and indirectly supporting asset managers, did liquidity and redemption stress subside. Overall, the March episode validated the financial-stability concerns about liquidity vulnerabilities in the fund industry and calls for further action to address them.
Source: IMF
2020 Year in Review: The impact of COVID-19 in 12 charts
December 14, 2020--This time last year, concepts such as "lockdowns","mask mandates" and "social distancing" were unknown to most of us. Today they are part of our everyday language as the COVID-19 pandemic continues to impact all aspects of our lives.
Through the following 12 charts and graphics, we try to quantify and provide an overview of our colleagues' research in the face of a truly unprecedented crisis.
The New Poor
Over the past 12 months, the pandemic has harmed the poor and vulnerable the most, and it is threatening to push millions more into poverty. This year, after decades of steady progress in reducing the number of people living on less than $1.90/day, COVID-19 will usher in the first reversal in the fight against extreme poverty in a generation.
Source: World Bank
ETFGI reports assets invested in ETFs and ETPs listed globally reached a new record of US$7.62 trillion at the end of November 2020
December 14, 2020--ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs and ETPs ecosystem, reported today that assets invested in ETFs and ETPs listed globally reached new records of US$7.62 trillion and net inflows reached a new record of US$670.57 billion at the end of November.
ETFs and ETPs listed globally gathered record net inflows of US$131.99 billion during November, bringing year-to-date net inflows to a record US$670.57 billion which is higher than the US$475.53 billion gathered at this point last year, the full year 2019 NNA of US$571.15 billion as well as the prior full year record for net inflows of US$654 billion set at the end of 2017. Assets invested in the global ETFs/ETPs industry have increased by 11.4% from US$6.84 trillion at the end of October 2020, to US$7.62 trillion at the end of November, according to ETFGI's November 2020 Global ETFs and ETPs industry landscape insights report, the monthly report tht is part of an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Assets invested in ETFs and ETPs listed globally reach a new record high of $7.62 trillion at the end of November.
Net inflows reach an all time high of $670.57 Bn beating the prior record of record of $654 billion set at the end of 2017.
Source: ETFGI
Cheap tracker funds trounce private equity
December 12, 2020--Low cost index monitoring funds beat the returns of personal fairness investments over the previous 20 years, in response to a survey of pension schemes.
The findings by CEM Benchmarking, a Toronto-based consultancy, elevate extra questions on claims of superior efficiency by personal fairness.
CEM examined the web returns (after charges) of 330 pension funds and different giant institutional buyers within the US, Canada and remainder of the world between 1996 and 2018.
Source: FT.com
BlackRock vows to back more shareholder votes on climate change
December 10, 2020--World's largest asset manager has come under increasing pressure to wield its influence
BlackRock has vowed to back more shareholder resolutions on climate and social issues at annual meetings, as the world's largest asset manager faces growing pressure to use its clout to change companies' behaviour.
The $7.8tn asset manager has faced years of criticism after overwhelmingly backing management rather than voting for shareholder proposals on issues such as climate change.
Source: FT.com
BlackRock promises to support more shareholder votes on climate change
December 10, 2020--BlackRock has pledged to support more shareholder resolutions on climate and social issues at annual meetings, as the world's largest asset manager faces increasing pressure to use its influence to change corporate behavior.
The $ 7.8 billion asset manager has known for years critical after overwhelmingly supporting management rather than voting for shareholder proposals on issues such as climate change companies.
Source: FT.com
From Vaccine Delivery to Remote Working, Experts Predict Internet-Enabled Devices Will Shape Global COVID-19 Recovery
December 9, 2020--Increased dependency on technology during the COVID-19 pandemic highlights the enormous benefits and new challenges posed by our connected world
37 world-leading initiatives in six continents have come together as part of a multi-year effort to shape the development of the internet of things
As the world awaits a COVID-19 vaccine, attention is focused on how to track and safely deliver these temperature-sensitive vaccines to billions of people. Sensors and internet-enabled devices are expected to play a central role in this process, much as they have throughout the pandemic.
COVID-19 has accelerated global trends towards remote working, telehealth, distance learning and automation, according to a new report by the World Economic Forum in collaboration with the Global Internet of Things (IoT) Council and PwC. The pandemic is also boasting adoption of wearable technologies like fitness trackers and smart-home devices. As the dependency on connected technologies increases, so do the associated risks and the need for good governance.
view the World Economic Forum State of the Connected World 2020 Edition
Source: World Economic Forum
Navigating Capital Flows-An Integrated Approach
December 9, 2020-In a continuous effort to help countries manage volatile cross-border capital flows, the IMF has taken a major step toward a new analytical macroeconomic framework that can guide appropriate policy responses.
The work reflects evolving thinking on macroeconomic policy and will feed into the upcoming review of the IMF's Institutional View on the Liberalization and Management of Capital Flows, which currently guides the Fund’s advice and assessments of members' policies.
While flexible exchange rates can act as a useful shock absorber in the face of capital flow volatility, this mechanism does not always offer sufficient insulation, in particular when access to global capital markets is interrupted or market depth is limited.
Source: IMF
