Global ETF News Older than One Year
Emerging market central banks and quantitative easing: high-risk advice
August 26, 2020--Central banks in emerging markets with weak currencies should not resort to unorthodox monetary tools such as quantitative easing as a response to the crisis triggered by COVID-19. Preferable alternatives include shifting public spending away from less pressing needs, moderately increasing public debt and falling back on official development assistance.
The idea that 'credible' emerging-market central banks (EMCBs) could embrace quantitative easing (QE) to tackle the consequences of the COVID-19 pandemic, as suggested by Benigno et al (2020), could cause more harm than good. Let us point out the main weaknesses and risks.
First: the different roles of core and peripheral currencies
The suggested approach largely disregards the different roles of 'core' and 'peripheral' currencies in international markets. While 'core' currencies, including the US dollar, the euro and, to lesser degree, the Japanese yen, British pound, Swiss franc and Chinese renminbi, play the role of international (global) money, in all its three functions, and are demanded by both domestic and foreign economic agents, 'peripheral' currencies are subject to only domestic demand.
Source: bruegel.org
Covid Crisis Drives Historic Drop in Global Trade
August 25, 2020--Trade flows collapsed in the spring. Despite recent signs of a rebound, a reshaping of world trade could follow the pandemic.
Global trade flows collapsed in the spring, marking the largest fall in two decades, as coronavirus lockdowns disrupted air and sea transport and dealt a blow to the demand for many consumer and investment goods.
In more recent weeks, signs have emerged of a rebound in the movement of goods across national borders. But the enormous economic and social disruptions caused by the pandemic are expected to reshape global trade in the longer term.
Source: wsj.com
Gold Fever in 2020 Means Exchange-Traded Funds
August 23, 2020--In the 19th century California gold rush, the surest way to a fortune, according to Mark Twain, was to be in the "pick and shovel business."
If 2020 gold fever has an equivalent, it's the ETF business.
Exchange-traded funds backed by physical gold and silver accumulated more than $50 billion of bullion this year. ETFs now hold more gold than every central bank with the exception of the Federal Reserve.
Source: bnnbloomberg.ca
ETFGI reports assets invested in ESG ETFs and ETPs listed globally broke through the 100 billion US dollars milestone at end of July 2020
August 21, 2020-- ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs/ETPs ecosystem, reported today that Environmental, Social, and Governance (ESG) ETFs and ETPs listed globally broke through the US$100 billion milestone at end of July 2020.
The products gathered net inflows of US$6.76 billion during July, bringing year-to-date net inflows to a record US$38.78 billion which is significantly higher than the US$12.37 billion gathered at this point last year and the US$26.71 Billion gathered in all of 2019.
Total assets invested in ESG ETFs and ETPs increased by 14.7% from US$88 billion at the end of June 2020 to US$101 billion, according to ETFGI's July 2020 ETF and ETP ESG industry landscape insights report, a monthly report which is part of a paid-for annual research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Assets invested in ESG ETFs and ETPs listed globally break through the $100 billion milestone to reach a new record of $101 billion.
YTD through end of July, ETF/ETP listed globally gathered a record $38.78 Bn in net inflows surpassing the $26.71 billion gathered in 2019.
Source: etfgi.com
Sustainalytics tells Yahoo! Finance to pull 'highly inaccurate' ranking of responsible companies
August 20, 2020--League table, including Wells Fargo and Dakota Pipeline owner, wrongly claimed firms were highly rated by Morningstar-owned ESG research house
Yahoo! Finance has removed a list of the 30 "most socially responsible companies" at the request of ESG data provider Sustainalytics, which described the US web provider's ranking as a "highly inaccurate" reflection of its ratings.
The now deleted list included unlikely candidates...
Source: responsible-investor.com
Addressing Crisis Through Infrastructure
August 20, 2020-Fiscal policy plays a major role in counteracting recession when monetary policy hits the zero-bound and the worst-hit sectors are not interest-sensitive. Infrastructure stimulus generally creates larger economic benefits, because it not only puts people to work, but also creates durable assets that can help boost long-term growth.
Infrastructure investments formed a significant component of stimulus programs following the 2008 financial crisis (see figure). This type of investment is frequently cited as a necessary element of COVID-19 recovery packages.
Source: worldbank.org
Today's ultra-low interest rates are anything but 'natural'
August 20, 2020-It's inconceivable to overlook that central banks have lower rates of interest at an unprecedented tempo. A standard view is that financial and demographic components are forcing central bankers to maneuver on this course. This can be a misunderstanding. Policymakers shouldn't be let off the hook that simply.
Common rates of interest in developed markets have been in regular decline over the previous 30 years. This seemingly secular development has impressed a plethora of theories about what drives it, from commerce flows and productiveness, to life expectancy and demographic shifts. Relying in your alternative of timeframe, you may certainly see such components shifting with rates of interest previously few many years.
Source: universalpersonality.com
ESG Investments To Go Passive
August 19, 2020--More than half of institutional investors, 55%, believe the majority of their environmental, social and governance investments will be in passive products within the next five years, according to research from asset manager Invesco.
Institutional investors currently hold a fifth of their ESG exposure in passive vehicles such as exchange-trades funds, and nearly half intend to increase their passive holdings over the next two years.>P>view more
Source: marketsmedia.com
WEEKLY ENERGY RECAP: Oil demand set to falter till 2022 as virus uncertainty mounts
August 16, 2020--Crude oil prices remained stable for the third month in a row with Brent crude moving in a tight range between $40 and $45 per barrel since early June.
Brent advanced to $44.80 per barrel by the end of the week as WTI also gained to $42.01 per barrel.
The big three global oil outlooks published by OPEC, the International Energy Agency and the US Energy Information Administration were all bearish and based on the view that demand may not recover to 2019 levels until 2022 at the earliest.
Source: arabnews.com
Funds branded 'ESG' are laden with technology stocks
August 14, 2020--Campaigners say managers have overdosed on US giants such as Apple, Amazon and Microsoft.
Source: FT.com