Global ETF News Older than One Year
Prospects for Growth and Imbalances Beyond the Short Term
July 15, 2010--Introduction
The global financial and economic crisis and the ensuing recession left many OECD countries with a legacy of lower potential output, high unemployment and unsustainable government finances.
While long-term growth rates may well have been unaffected by the crisis, the level of potential output is expected to have fallen by close to 3% in the OECD area as a whole. At the same time, a combination of fiscal stimulus measures, a loss of previous extraordinary revenue buoyancy, and cyclical revenue losses and expenditure hikes, has led to sharp increases in budget deficits, which are projected at almost 8% of GDP in 2011 on average in OECD countries.
The global crisis has also contributed to a temporary narrowing of global current account imbalances. Having reached over 5% of world GDP in 2008, the combined current account surpluses and deficits of the world’s major countries and economic areas almost halved in 2009. These imbalances are beginning to widen again, with the notable exception of China’s current account surplus, which has continued to fall in relation to GDP.
Repairing the damage wrought by the downturn and getting economies back onto the path of strong, sustainable and balanced growth will require concerted efforts in a number of policy domains, including fiscal consolidation targeted at reducing government debt over the medium-to-longer term, some realignment of exchange rates and structural reforms that will boost growth and welfare while at the same time rebalancing the sources of world demand.
On the basis of policy simulations, this note reports different scenarios for the world economy to identify what combination of policies is likely to be most successful in delivering strong, balanced growth, sound public finances and sustainable current account positions.1
Scenarios for the world economy
view The OECD’s new global model paper
Source: OECD
Highlights of the latest OMR
July 13, 2010--Highlights
Benchmark crude prices traded in a $71-79/bbl range in June, after a volatile May, as continued negative sentiment tempered upside price moves. Financial and equity markets remained the focus of attention, and by early July Atlantic basin benchmarks touched four-week lows, before rebounding to around $75.00/bbl by the 12th of the month
OECD industry stocks rose for a second consecutive month in May, across all regions and by a combined 35.0 mb, reaching 2 757 mb or 61.0 days of forward demand cover. Preliminary data point to a further 3.5 mb build in the OECD in June, while crude and products held in floating storage fell, albeit offshore volumes remain high.
Global oil demand for 2011 is expected to rise by 1.6% or 1.3 mb/d year-on-year to 87.8 mb/d, assuming consensus trends in the world economy, crude prices and efficiency gains. Growth will be driven entirely by non-OECD countries (+3.8% or +1.6 mb/d), while the OECD sees resumed decline (-0.5% or -0.2 mb/d). The 2010 outlook remains largely unchanged at 86.5 mb/d (+2.1% or +1.8 mb/d versus 2009).
OPEC crude oil supply averaged 28.9 mb/d in June, down by 65 kb/d from May. A lull in OPEC crude capacity expansion is expected between now and end-2011, although gas liquids output rises by 0.6 mb/d in both 2010 and 2011. The ‘call on OPEC crude and stock change’ for 2010 has been revised up by 100 kb/d, to 28.8 mb/d. It averages 29.2 mb/d in both 3Q10 and 2011.
Non-OPEC supply could rise by 0.4 mb/d in 2011 to 52.8 mb/d, following 0.8 mb/d growth in 2010. Consolidated annual data and recent monthly estimates boost 2008-2010 production by 0.1 mb/d. Increases from Brazil, global biofuels, Azerbaijan, Colombia, Ghana and Oman offset decline from Mexico and the North Sea during 2011.
Global refinery crude throughputs are estimated at 73.5 mb/d for 2Q10, 1.3 mb/d above year ago and 0.7 mb/d higher than in 1Q10. A year-on-year recovery in US runs, plus continued expansions in non-OECD Asia, drive growth. OECD Europe, Pacific and Latin American runs remained weak due to maintenance and operational problems, though a rebound is expected in 3Q10.
view highlights of the Oil Market Report
Source: International Energy Agency (IEA)
ETF Landscape Industry Highlights, End of Q2 2010-BlackRock
July 12, 2010-- United States ETF and ETP Industry end Q2 2010:
The US ETF industry had 846 ETFs, assets of US$693.2 Bn, from 30 providers on two exchanges.
In June 2010 US domiciled ETFs/ETPs experienced net inflows totalling US$12.4 Bn. Fixed Income ETFs/ETPs saw positive flows with US$4.8 Bn net new assets, followed by North American equities with US$4.4 Bn net inflows, while Asia Pacific equities experienced US$0.5 Bn net outflows in June 2010.
YTD US domiciled ETFs/ETPs experienced net inflows totalling US$40.4 Bn. Fixed Income ETFs/ETPs saw positive flows with US$20.6 Bn net new assets, followed by Commodities with US$9.1 Bn net inflows, while Alternative asset classes experienced US$1.7 Bn net outflows YTD.
Global ETF and ETP Industry end Q2 2010:
The global ETF industry had 2,252 ETFs with 4,637 listings, assets of US$1,025.9 Bn, from 130 providers on 42 exchanges around the world.
The global ETF and ETP industry combined had 3,075 products with 5,811 listings, assets of US$1,158.6 Bn from 156 providers on 44 exchanges around the world.
European ETF and ETP Industry end Q2 2010:
The European ETF industry had 961 ETFs with 2,979 listings, assets of US$218.0 Bn, from 35 providers on 18 exchanges.
In June 2010, net new assets into European domiciled ETFs/ETPs totalled US$2.6 Bn, with Fixed Income receiving US$1.5 Bn net inflows, followed by Emerging Markets equities with US$1.3 Bn, while European equities experienced US$1.5 Bn net outflows in June 2010.
YTD net new assets into European domiciled ETFs/ETPs totalled US$24.4 Bn, with Fixed Income receiving US$5.8 Bn new inflows, followed by Commodities with US$5.7 Bn and European equities with US$1.5 Bn net new assets YTD.
Canada ETF and ETP Industry end Q2 2010:
The Canadian ETF industry had 145 ETFs, assets of US$30.4 Bn, from four providers on one exchange.
Asia Pacific ex-Japan ETF and ETP Industry end Q2 2010:
The Asia Pacific ex-Japan ETF industry had 183 ETFs with 286 listings, and assets of US$48.7 Bn from 60 providers on 13 exchanges.
Japan ETF and ETP Industry end Q2 2010:
The Japanese ETF industry had 71 ETFs with 74 listings, and assets of US$25.4 Bn from six providers on two exchanges.
Latin America ETF and ETP Industry end Q2 2010:
The Latin American ETF industry had 21 ETFs with 257 listings, and assets of US$8.4 Bn from three providers on three exchanges. to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
State Street updating study on ESG data
July 9, 2010--Project getting lots of interest from clients
Global banking, asset management and custody group State Street is in the process of updating its own 2008 study which looked at the environmental, social and governance ratings offered by 11 commercial suppliers. It says the original study found that ESG-related issues have gradually exerted a stronger influence on economic performance over time
The update, taking in the financial crisis, is being conducted with the Sydney Advanced Research Center in response to demand from Australian investors. “We have experienced a high level of interest in the findings from Canadian and European clients as well as some US clients,” State Street said.
Source: Responsible Investor
Quarterly National Accounts - Contributions to GDP growth - First Quarter 2010, OECD
July 2, 2010--Real GDP in the OECD area grew by 0.6% in the first quarter of 2010 compared with the last quarter of 2009. Stockbuilding was the main contributor to OECD GDP growth for the third consecutive quarter.
Changes in inventories contributed 0.45 percentage point to overall growth in the first quarter and private consumption contributed 0.3 percentage point but these were partially offset by negative contributions from gross fixed capital formation and net exports, both accounting for minus 0.1 percentage point of overall GDP growth.
Source: OECD
GFSR Market Update (Formerly known as the Financial Market Update)-July 2010
July 8, 2010--Despite generally improved economic conditions and a long period of healing after the failure of Lehman Brothers, progress toward global financial stability has recently experienced a setback. Sovereign risks in parts of the euro area have materialized and spread to the financial sector there, threatening to spill over to other regions and re-establish an adverse feedback loop with the economy.
Further decisive follow-up is needed to the significant national and supranational policy responses that have been taken in order to strengthen confidence in the financial system and ensure continuation of the economic recovery.
view the Global Financial Stability Report GFSR Market Update
Source: IMF
World Recovery Continues, But Risks Increase, Says IMF
IMF forecasts continuing global recovery
But renewed financial turbulence and euro area problems cloud the outlook
Fiscal consolidation should be based on credible medium-term plans
July 8, 2010--Balancing the strong growth numbers for the first half of 2010 and the adverse impact of increased financial turbulence, the IMF forecasts world growth to rise to 4 ½ percent this year, before falling somewhat to 4 ¼ percent in 2011—with the world average masking large differences around the globe.
But despite the stronger than expected first half recovery, the IMF warned that uncertainties surrounding sovereign and financial sector risks in parts of the euro area could spread more widely, posing difficulties for both financial stability and the economic outlook.
“While we predict the recovery will continue, it is clear that downside risks have risen sharply,” Olivier Blanchard, the IMF’s chief economist, told reporters. Blanchard and José Viñals, respectively the Fund’s Economic and Financial Counselors, launched updates to the IMF’s World Economic Outlook (WEO) and Global Financial Stability Report (GFSR) in Hong Kong for the first time.
Differences in performance
As always, these world growth rates hide a large difference between and within advanced and emerging and developing economies, with the United States expected to grow at about 3 ¼ percent in 2010, the euro area at 1 percent, Japan at close to 2 ½ percent, and emerging and developing economies averaging about 6 ¾ percent
view the IMF World Economic Outlook (WEO) Update -- Contractionary Forces
View the World Economic Outlook Update A Policy-Driven, Multispeed Recovery
Source: IMF
ESG issues ‘are’ financial risks for pension funds says influential Towers Watson head, Roger Urwin
Respected consultant predicts advent of ESG credit ratings.
July 7, 2010--The assumption that environmental, social and governance (ESG) issues are ‘extra’-financial is wrong, but better metrics are needed to prove their short- to medium-term material impact on company performance, according to Roger Urwin, global head of investment content at Towers Watson, and one of the world’s most influential investment advisors.
Speaking to Responsible-investor.com, Urwin, who is also an advisory director to MSCI Barra, which recently bought RiskMetrics, the New York-based risk and ESG firm, said he predicted that one development that might dispel the extra-financial argument could be the launch of ESG credit ratings, akin to bond ratings. “There’s a basic assumption that if extra financial issues matter then they should already be there in investment analysis and decisions. It’s not an unreasonable assumption, but as you prod at it you realise that it is a weak argument.” Urwin said that because fund manager mindsets are set on 3- or 12-month returns because of the business structure, there was an “all-too-ready reflection” that extra financial impacts might only affect share prices over a longer time-frame: “I think that is wrong because extra financial influence on stocks is set at a gradient which is quite low which means that it may take five years before you can see the effects. But just because you can’t necessarily assess it in 3 or 12 months that doesn’t mean it doesn’t exist.
Source: Responsible Investor
Index Data Monthly Report-Dow Jones
July 7, 2010--The following Index Data Monthly Report from Dow Jones are now available
Index Data Monthly Report: UBS Commodity Indexes
Index Data Monthly Report: Asia Pacific Edition
Index Data Monthly Report: MENA Edition
Index Data Monthly Report: Dow Jones Islamic Market Indexes
Index Data Monthly Report: Europe Edition
Index Data Monthly Report: Latin America Edition
Index Data Monthly Report: Dow Jones Brookfield Infrastructure Indexes
Index Data Monthly Report: U.S. Edition
for more info, click here
Source: Dow Jones Indexes
Private equity funds recovered from crisis
Although Q1 2010 data will not be published until later this year, Preqin said there are indications the recovery has remained on track.
"Company valuations and performance started to improve from the second quarter of 2009 and the industry has since continued its recovery," said Preqin head of research Etienne Paresys.
The survey recorded returns of 13.8% in the 12 months to the end of December 2009, compared with losses of 9.2% over the year to September 30 2009.
Performance still trailed the major markets over the same period however, with the US S&P 500 up 26.5%, the MSCI Europe rising 35.8% and MSCI Emerging Markets index up a whopping 78.5%, however Preqin said.
Within the asset class, buyout funds posted the highest returns last year, returning 16.7%, with venture capital up 5%, mezzanine by 2.3% and fund of funds 0.2% higher.
The data also showed median returns for 2005 vintage and older buyout funds are now all in positive territory, while 2006 vintage and subsequent median returns are still in the red.
"Although the 2006 buyout vintage was heavily affected by the global downturn and is still showing negative median returns, we have seen a significant improvement in performance, and there is now a strong possibility that it will move into positive territory in the coming months," Paresys added.
Source: Preqin
July 1, 2010--On June 28, 2010, Preqin reported; Private equity funds have recovered from some of the heaviest losses of the global downturn, research has shown.
Analysis of 5,000 funds worldwide by data provider Preqin found valuations increased 13.5% in 2009, almost erasing the losses of in 2008 which saw net asset values drop 15.8%.
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