Global ETF News Older than One Year
HSBC hires ex-Merrill Knight for new climate change research role as broker hiring spree continues
July 1, 2010--Banking giant HSBC has hired Zoe Knight, former senior director of socially responsible investing (SRI) research at Merrill Lynch in London, for a new role as director of climate change strategy. The hire by HSBC adds to the recent turnaround in the recruitment of sustainability analysts at investment banks after a cull in numbers during the credit crunch as costs were cut.
Rivals including Citi, Morgan Stanley and Merrill Lynch itself have all been adding to their sustainability teams in recent months as demand for related research grows. Nick Robins, head of HSBC’s Climate Change Centre of Excellence, which bridges group sustainability and research at the bank, said Knight’s appointment reflected a rise in client requests for climate research.
Source: Responsible Investor
Fears mount over slowing global demand
July 1, 2010--Fears grew that the global recovery is faltering on Thursday after a slew of data pointed to weaker global demand led by slower growth in China.
Figures showed manufacturing output slowing across large parts of the world, posing further challenges to leading economies as they attempt to shore up shaky fiscal positions without falling back into recession.
In Asia – the world’s production powerhouse whose economies are still largely dependent on export demand – manufacturing activity indices for China, South Korea, Taiwan, India and Australia all showed weaker activity for June.
Source: FT.com
BlackRock ETF Landscape Industry Review, May 2010
June 30, 2010--GLOBAL
At the end of May 2010 the global ETF industry had 2,218 ETFs with 4,478 listings, assets of US$1,044.1 Bn from 131 providers on 42 exchanges around the world.
YTD ASSETS INCREASED BY 0.8%, COMPARED TO THE 7.6% DECREASE IN
THE MSCI WORLD INDEX IN US DOLLAR TERMS.
THE TOP 100 ETFs, OUT OF 2,218, ACCOUNT FOR 64.5% OF GLOBAL
ETF AUM, WHILE 458 ETFs HAVE LESS THAN US$10.0 MN IN ASSETS.
YTD THE NUMBER OF ETFs INCREASED BY 13.7% WITH 290 NEW
ETFs LAUNCHED.
THE NUMBER OF ETFs LISTED IN EUROPE HAS SURPASSED THE US WITH
946 ETFs LISTED IN EUROPE, COMPARED TO 836 IN THE US.
THERE ARE CURRENTLY PLANS TO LAUNCH 884 NEW etFS.
YTD THE NUMBER OF EXCHANGES WITH OFFICIAL LISTINGS INCREASED FROM
40 TO 42.
YTD THE AVERAGE DAILY TRADING VOLUME IN Us DOLLARS INCREASED BY
132.8% TO US$117.1 BN.
MSCI AND STANDARD & POOR’S (S&P) ARE VIRTUALLY TIED IN TERMS OF
etF aUm TIED TO THER BENCHMARKS WITH ASSETS OF US$241.0 BN
AND 308 ETFs TRACKING MSCI, WHILE S&P HAS US$239.8 BN AND 272
ETFs, FOLLOWED BY BARCLAYS CAPITAL WITH US$101.4 AND 78 ETFs.
>Source: Global ETF Research & Implementation Strategy Team, BlackRock
Securitisation drops 5% in second quarter
June 30, 2010--The amount of money raised through securitisation dropped in the second quarter of 2010 compared with the previous year, highlighting the slow pace of recovery in this once-dominant part of the capital markets.
On a global basis, the volume of securitised deals reached just $139bn, according to figures from Thomson Reuters, a 5 per cent drop on the amount seen in the second quarter of 2009.
Compared with the peaks of 2006, when bonds were sold backed by payments on loans ranging from residential mortgages to car loans to leases on aircraft, the securitised markets are still only a fraction of their former selves, in spite of efforts by US and European central banks to prop them up.
Source: FT.com
SPDR Gold Shares exceeds USD50bn in assets
June 30, 2010--Assets in the SPDR Gold Trust have surpassed USD50bn, according to State Street Global Advisors and World Gold Trust Services, a wholly-owned subsidiary of the World Gold Council.
"With assets having increased by approximately 32 per cent year-to-date (as of 25 June 2010), SPDR Gold Shares has radically transformed the way in which a wide range of investors access the gold market," says James Ross, senior managing director at State Street Global Advisors.
Jason Toussaint, managing director, investments, World Gold Trust Services, adds: "Strategic asset allocation will continue to play a central role in investors' portfolio performance moving forward, and portfolios that contain even a small allocation in gold have the potential to better cope with varying market scenarios. This milestone for GLD underscores that investors have embraced gold as a viable core holding over the long-term."
As of 25 June, assets under management in the trust totalled more than USD53bn, making it the second largest ETF by assets in the world.
GLD is also cross-listed on the Bolsa Mexicana de Valores, the Singapore Exchange the Tokyo Stock Exchange and the Stock Exchange of Hong Kong.
Source: Online News
EDHEC-Risk Study Finds No Theoretical or Empirical Justification for Cap-Weighted Indices
June 29, 2010--After the financial crisis and the accompanying falls in the stock markets, many commentators have questioned the appropriateness of tracking cap-weighted indices. These indices are particularly inefficient and, through their momentum properties, favour the emergence of speculative bubbles.
New research from the EDHEC-Risk Institute shows that financial theory, despite widely-held views to the contrary, does not support investment in these types of indices. It is therefore urgent for investors to seek alternatives to these indices which are justified by neither fact nor theory.
The three main conclusions of the research are the following:
1.A cap-weighted stock market index is not the market portfolio of financial theory (the Capital Asset Pricing Model (CAPM) theory is often evoked to show that cap-weighted stock market indices are efficient portfolios and attractive investments). That it is not is clear from the choices made in empirical studies that attempt to come up with reasonable proxies for the market portfolio. These studies attach great importance to including many more stocks than indices do, and their proxies of the market portfolio include bonds, real estate, and non-tradable assets such as human capital.
2. Even if it were possible to construct and hold the market portfolio, the theory does not predict that the market portfolio is efficient unless we make highly unrealistic assumptions. In fact, the authors of the seminal academic research in the 1950s and 1960s, Harry Markowitz and William Sharpe, have themselves emphasised (Sharpe (1991) and Markowitz (2005)) that the market portfolio may not be efficient in a more realistic setting.
3. In view of these arguments, financial theory alone does not justify the current practice of cap-weighting. In fact, from a theoretical perspective, cap-weighted stock market indices seem to offer no particular advantage.
Source: EDHEC
ETF Securities Gold Holdings Increase to a Record $10 Billion
June 28, 2010--Gold held in ETF Securities Ltd.’s European exchange-traded products rose to a record $10 billion, accounting for half of the provider’s total global assets under management.
Its ETFS Physical Gold product held $5.2 billion of metal as of June 11, and ETFS Gold Bullion Securities contained $4.8 billion, London-based ETF Securities said today in a report.
Total assets under management climbed to an all-time high $20 billion as of June 17 including commodity, currency and equity products, up 70 percent from last July, it said.
Gold ETP holdings advanced to an all-time high this year and coin sales from mints accelerated on buying by investors seeking to protect their wealth from Europe’s sovereign-debt crisis and on concern the global economic recovery may falter. Bullion climbed to a record $1,265.30 an ounce on June 21 and is up 15 percent this year.
Source: Business Week
Keeping Ahead of the Curve: Investment Management in the New Regulatory Landscape
June 25, 2010--Ensuring compliance with existing regulations and preparing for new regulatory developments is a normal part of doing business for financial services organizations. However, the breadth and volume of regulatory initiatives around the world has surged in response to the global financial crisis, putting increasing strain on businesses already under pressure. Proposed regulatory reforms to the investment management and financial services industries seek to lessen systemic risk and enhance investor protection.
This report by KPMG International highlights a survey of top executives in the investment management services industry on how they view new regulatory reform and the potential impact on their business.
The executives were polled on new regulations affecting strategic objectives, the markets in which they operate, financial targets for the future, and the impact of regulation on investment returns.
view Keeping Ahead of the Curve: Investment Management in the New Regulatory Landscape
Source: KPMG
BlackRock's O'Brien steps down, leaves investment management
June 25, 2010--Mike O’Brien, head of EMEA institutional business at BlackRock, is to leave the company.
He is to pursue business interests outside investment management.
O’Brien spent 10 years at Barclays Global Investors before it was acquired by BlackRock last year.
His successor is to be Charles Prideaux, currently chief executive of BlackRock's fundamental equities business.
Source: IP&E
Banks win battle for limits to Basel III
June 24, 2010--Plans by global regulators to compel banks to set aside billions of dollars in extra capital to cope with future crises are to be pared back after intense lobbying by the industry.
After wrangling over the details of a regulatory overhaul published six months ago, a consensus on the Basel committee is suggesting that its proposals be thinned down.
A draft of the latest thinking of the committee, set up to oversee global financial regulation, is to be presented at this weekend’s G20 summit in Toronto.
Source: FT.com
