Global ETF News Older than One Year
Government Borrowing Is Rising Risk to World Financial System
Projected losses shrinking among banks
Government risk is new threat to prolonging financial crisis
Credit recovery will be slow
April 21, 2010--The global financial system and the world economy are slowly regaining their health, thanks in large part to unprecedented interventions by governments, but the sharp rise in government debt during the economic crisis from already elevated levels helped create what the IMF says is the newest threat to the financial system: growing sovereign risk.
That is not to say that the private financial sector is fully recovered. Indeed, the recovery in the financial sector remains “fragile,” according to José Viñals, Financial Counselor and Director of the IMF’s Monetary and Capital Markets Department.
Bank balance sheets still contain bad assets, consumers and businesses remain stretched, and credit recovery is some time off, the IMF said in its latest Global Financial Stability Report (GFSR), released April 20. Moreover, a large part of the financial system continues to rely in varying degrees upon the extraordinary measures governments began to introduce two years ago—such as purchasing bad assets from, and injecting capital into, troubled institutions.
Source: IMF
World Must Now Focus on Financial Sector Reform, Says IMF
World economy to bounce back to 4.2 percent growth, says Strauss-Kahn
But major problems remain including weak private sector demand, high unemployment
Need to tackle financial sector reform around the world more quickly
April 22, 2010--The international economy is recovering faster than expected from the global crisis, but the world remains a dangerous place and governments should now focus on stepping up reform of financial sector regulation to avoid future crises, said IMF Managing Director Dominique Strauss-Kah.
Speaking ahead of meetings in Washington of the International Monetary Fund, the World Bank, and the Group of Twenty (G-20) leading industrial and emerging market countries, Strauss-Kahn said the faster-than-expected recovery was testament to the unprecedented cooperation between major economies to combat the crisis.
But in a wide-ranging press conference that also touched on Greece, Iceland, Argentina, China, and reform of the IMF, among other issues, he told reporters on April 22 that the recovery remained uneven and the world could not go back to business as usual.
Need to secure recovery
The goal now is to secure and advance the recovery, because even if the recovery is stronger and faster than expected, it is still fragile. And it is fragile mainly because it is uneven, he said. The world is still a dangerous place, and I don't like that many people have in mind that the crisis is over, that everything is behind us, and we can go back to business as usual.
Strauss-Kahn pointed to a variety of problems, including high unemployment in advanced economies, weak private demand, high government debt, the risk of asset price bubbles in emerging markets, and the need to press ahead rapidly with financial sector reform.
Releasing the IMF's latest economic forecast on April 21, IMF Chief Economist Olivier Blanchard said the world faced an important new stage of the crisis. Achieving strong, sustained, and balanced growth would require more work, namely fiscal consolidation in advanced countries, exchange rate adjustments, and a rebalancing of demand across the world.
view the WORLD ECONOMIC OUTLOOK April 2010-Rebalancing Growth
Source: IMF
Hedge fund managers move cautiously in an uncertain world
April 22, 2010--While the crisis that afflicted the hedge fund sector in 2008 and early 2009 may be essentially over, with market conditions remaining volatile and investors still cautious, there is no prospect of an immediate return to the buoyant growth conditions that prevailed through the mid-2000s, according to industry professionals. And continuing economic uncertainty, especially in Europe, continues to weigh on prospects for the next 12 months – although some hedge fund managers have been relishing the return of volatility to the markets over the past couple of years.
An average performance loss of around 20 per cent in 2008 was matched by a virtually equal rebound last year, and while hedge fund returns over the first couple of months of this year were patchy, March saw a fresh uplift of as much as 3 per cent – albeit helped by a surge of more than 5 per cent in US equity prices – according to index providers such as hedge fund advisory firm Hennessee Group, whose main index increased by 3.05 per cent. The Barclay Hedge Fund Index gained 3.08 per cent and Hedge Fund Research’s HFRI index 2.70 per cent, while the Lyxor Hedge Fund Index rose by 2.12 per cent and the Credit Suisse/Tremont Hedge Fund Index by 2.22 per cent.
Source: ETF Express
Bank, Donors Take Long-Term View on Food Security
Against this background, the World Bank Group is set to become trustee of a new fund aimed at reducing global hunger and poverty by focusing on food security and agriculture.
The United States, Canada, Spain, the Republic of Korea and the Bill and Melinda Gates Foundation will together provide about $900 million in support to the Global Agriculture and Food Security Program (GAFSP). The World Bank will serve as trustee and host of a coordination unit for the fund, and if requested, as a supervising entity.
Source: The World Bank
FTSE RI chief Will Oulton to leave the company
FTSE has not yet made public who will replace Oulton as director of RI and the company could not be reached at the time of going to press.
Source: Responsible Investor
Master ETF Database Subscription Service Launched by Global Strategy Board
The Database contains precise categories for research purposes and is one of the most comprehensive and accurate ETF databases available. Subscribers to the service will receive the current edition of the Database, the current edition of the Master ETF Directory, as well as regular e-mail updates highlighting the dynamic changes in the ETF marketplace.
Source: Globl Strategy Board
NASDAQ OMX Announces First Quarter and Year-to-Date Global Index Group Report
Business Highlights On March 22, the NASDAQ-100 Index became the benchmark for the first
foreign index-linked financial product in China. The Guotai NASDAQ-100
Fund is open for subscription by Guotai Asset Management Co., Ltd., one
of the original asset managers in China, and is now available to investors in China.
Nordea Bank launched on March 10 four new Bull and Bear Certificates
based on the NASDAQ-100 Index and the OMX Helsinki 25 (OMXH25). The
certificates are listed on NASDAQ OMX Helsinki.
Source: NASDAQ OMX
World Bank’s IFC issues first $200m green bond
Similarly, Sweden’s SEB will be the manager for the new four-year, $200m (€148m) fixed-rate bond. Proceeds from the issue will be set aside in a separate “green account” for investing exclusively in renewable energy, energy efficient, and other climate-friendly projects in developing countries, the IFC said.
Source: Responsible Investor
Balancing risk and reward sustainably in the BRICS
While the long-term rewards are evident, there are significant risks to investing in these economies short- term. However, with sound risk management strategies in place, supported by ethical business principles and environmental and social policies, foreign companies working in the BRICs, and in partnership with domestic companies overseas, are poised to benefit from their projected phenomenal growth over the next decade. Even before the global economic and financial crisis, the growth potential of the BRICs – Brazil, Russia, India and China – was luring investors from across the globe. In 2003, two years after the concept was founded by Goldman Sachs chief economist, Jim O’Neill, economists were predicting that by 2040 the BRICs economies together could be larger than the G6 in US dollar terms.
Source: Responsible Investor
ETF Landscape: Industry Highlights - End March 2010
We also celebrate the 20th anniversary since the launch of the very first ETF globally. Twenty years ago on 9 March 1990 the first ETF was listed in Canada on the Toronto Stock Exchange (TSX): the TIPs (Toronto 35 Index Participation Fund) tracking the TSX 35 Index. It was followed by the HIPs (Hundred Index Participation Fund) tracking the TSX 100 Index on 26 September 1995. Ten years ago on 7 March 2000, the TIPs and HIPs ETFs were merged into the iUnits S&P/TSE Index Participation Fund (XIU CN): an ETF that was originally listed on 4 October 1999. Global ETF and ETP Industry end March 2010:
* The global ETF industry had 2,131 ETFs with 4,133 listings, assets of
US$1,081.9 Bn, from 123 providers on 42 exchanges around the world.
European ETF and ETP Industry end March 2010:
* The European ETF industry had 910 ETFs with 2,579 listings, assets of US$233.7 Bn, from 36 providers on 18 exchanges.
* Net new assets into European domiciled ETFs/ETPs totalled US$11.5 Bn YTD, with Emerging Market equities receiving US$2.3 Bn net inflows, followed by Asia Pacific equity with US$1.9 Bn and Commodities with US$1.7 Bn net new assets YTD.
United States ETF and ETP Industry end March 2010:
* Net new assets into US domiciled ETFs/ETPs totalled US$8.9 Bn YTD, with Fixed Income receiving US$10.1 Bn net inflows, followed by Global (ex-US) equities with US$1.9 Bn net new assets while North American equities experienced US$2.4 Bn net outflows.
Canada ETF and ETP Industry end March 2010:
Asia Pacific ex-Japan ETF and ETP Industry end March 2010:
* The Asia Pacific ex-Japan ETF industry had 159 ETFs with 255 listings, and assets of US$40.6 Bn from 53 providers on 13 exchanges.
Japan ETF and ETP Industry end March 2010:
* The Japanese ETF industry had 70 ETFs with 73 listings, and assets of US$27.3 Bn from six providers on two exchanges.
Latin America ETF and ETP Industry end March 2010:
* The Latin American ETF industry had 21 ETFs with 231 listings, and assets of US$9.3 Bn from three providers on three exchanges.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
April 22, 2010--Across the globe, more than 1 billion people go to bed hungry each night- a number exacerbated by the 2007-08 food price crisis.
While the global price spike is abating, grain stocks remain low and food prices are forecast to be, on average, 10-20% higher through 2018, compared to the 1997-2006 average. Food price volatility-impacted by volatile fuel prices-continues to hurt farmers in food-insecure nations, who are often ill-equipped to manage their crops against market uncertainty.
April 20, 2010--Will Oulton, director of Responsible Investment at FTSE, the index group, is leaving the company.
The company has announced internally that Oulton will depart at the end of April. His destination is not yet known, although it is believed that he will stay in the sustainable investment space
April 19, 2010--Global Strategy Board, the independent international research firm and a leading provider of ETF databases for institutions and individuals has announced the expansion of its popular knowledge product, the Master ETF Database.
April 19, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced the first quarter and year-to-date activities report for the NASDAQ OMX Global Index Group. The Global Index Group creates and licenses indexes, which are the basis of financial instruments, and provides full-service index support to financial product issuers, sponsors and investors.
-- The NASDAQ Stock Market(R) (NASDAQ) began trading on February 11 two new exchange-traded funds (ETFs) designed to provide leveraged and inverse
exposure to the NASDAQ-100 Index(R) (NDX).
The following ETFs are
sponsored by ProShares:
-- ProShares UltraPro QQQ (TQQQ)
-- ProShares UltraPro Short QQQ (SQQQ)
Move builds on success of World Bank green issuances.
April 19, 2010--The International Finance Corp., the World Bank’s private-sector lending institution, has issued its first Green Bond to raise funds to support climate-friendly projects in developing countries. The move builds on the success of the World Bank’s Green Bonds which have attracted investment from pension funds including the California State Teachers’ Retirement System (CalSTRS), the United Nations Joint Staff Pension Fund, Sweden’s AP2 and AP3 pensions buffer funds.
April 19, 2010--As the world slowly emerges from the global economic and financial crisis, businesses and governments are realising that the global economic and financial landscape has changed and that they must adapt to this new environment. As consumption in advanced economies remains stunted, increasing attention is focused upon the potentially vast consumer market in the BRICs, which many are hoping will play a key role in driving global demand and pulling the world out of recession.
April 15, 2010-Highlights
We celebrate the 10th anniversary of ETFs in Europe as the first ETFs to launch in Europe were the iShares DJ STOXX 50 (EUN1 GY) and iShares DJ Euro STOXX 50 (EUN2 GY) on 11 April 2000 on the Deutsche Boerse, followed by the iShares FTSE 100 (ISF LN) on the London Stock Exchange extraMARK segment on 28 April 2000.
* The US ETF industry had 814 ETFs, assets of US$736.3 Bn, from 29 providers on two exchanges.
* The Canadian ETF industry had 132 ETFs, assets of US$32.8 Bn, from four providers on one exchange.
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