Global ETF News Older than One Year
BIS-What Comes Next?
November 2, 2020--Summary
Focus
The Covid recession has had profoundly uneven effects at an industry level. Although some industries have recovered quickly since the middle of the year, customer service industries could face ongoing constraints until a vaccine or effective treatment for the virus becomes widely available. The quantitative implications of these constraints for other industries and for aggregate GDP are uncertain.
Contribution
I use a multi-industry macroeconomic model to estimate the aggregate and industry-specific disturbances that explain economic activity in a number of large economies during the Covid recession. I then use the model to forecast the recovery under various assumptions about how these disturbances evolve. I model the Covid crisis as a sequence of structural changes, meaning that I account for the effects of the crisis on the steady state of these economies, as well as the dynamic relationships between economic variables.
Findings
The output of customer service industries in large advanced economies, like the United States and the euro area, could remain 10% below its pre-Covid trend until constraints on these industries ease. These economies could face a '98% economy' in the years ahead, with output returning to at best 2% below its pre-crisis trend.
Source: BIS
BlackRock pushes for global ESG standards
October 30, 2020--BlackRock, the world's largest asset manager, has called for the "alphabet soup" of standards used by companies to showcase their sustainability efforts to be replaced by a globally recognised framework, warning an overhaul was vital for investors to understand the risks companies face.
Demand from asset managers for environmental, social and governance information has soared in recent years on the back of strong client interest in sustainable investing-an area of fund management that is growing rapidly.
In response, a wide array of private sector reporting frameworks and standards around sustainability have sprung up.
But the $7.8tn asset manager said these needed to be replaced with a single global framework, warning that the current "proliferation of disclosure initiatives, many of which are overlapping, has led to duplicative efforts by reporters and a lack of consistent and comparable data".
Source: technocodex.com/
Growth uncertainty, European Central Bank intervention and the Italian debt
October 29, 2020--A second term for US President Donald Trump would complete the demolition of the post-war international economic system. Trump's aggressive unilateralism, chaotic trade initiatives, loathing of multilateral cooperation and disregard for the very idea of a global commons would overpower the resilience of the web of rules and institutions that underpin globalisation.
But would a victory for Joe Biden lead to a repair of the global system-and, if so, of what kind? This is a much harder question to answer.view more
Source: bruegel.org
Fourth Annual IIA Benchmark Survey Reveals Significant Growth in ESG, Continued Multi-Asset Innovation & Heightened Competition
October 28, 2020--More than 40% increase in the number of indexes measuring environmental, social & governance (ESG) criteria in the past year, a new record for the survey.
Indexes covering fixed income markets grew 7.1% in the past year and nearly 15% in the last two years.
Index providers responded to a year of market disruption & global pandemic by not only meeting those challenges but by expanding their global product offerings & diversifying into new asset classes.
Index Industry Association (IIA), the industry trade group for the global independent index provider community, is pleased to share the results of its fourth annual global benchmark survey. This year's survey shows an industry that is growing and diversifying its products and services to meet expanding investor needs.
Source: Index Industry Association (IIA)
Regulators Seek Faster Fintech Innovation to Cope with Covid-19
October 28, 2020--Central Banks and other regulators are accelerating innovative initiatives for digital financial services to broaden access during the COVID-19 pandemic, according to a joint study by the World Bank and the Cambridge Centre for Alternative Finance at the University of Cambridge's Judge Business School.
Access to affordable financial services is critical for poverty reduction and economic growth. For poor people, especially women, access to, and use of, basic financial services can increase incomes and resilience, and improve quality of life. Fintech innovations are helping reduce the cost of providing services, making it possible to reach more people, and reducing the need for face-to-face interactions, essential for keeping up economic activity during the pandemic.
view the 2020 Global COVID-19 FinTech Regulatory Rapid Assessment Study
Source: World Bank
ETFGI reports assets invested in Active ETFs and ETPs reached a new record high of US$228.41 billion at the end of Q3 2020
October 27, 2020--ETFGI, a leading independent research and consultancy firm covering trends in the global ETF and ETP ecosystem, reported today that active ETFs and ETPs gathered net inflows of US$8.24 billion during September, bringing year-to-date net inflows to a record US$51.48 billion which is significantly more than the US$29.41 billion gathered through Q3 2019 as well as the US$42.10 billion gathered in all of 2019.
Assets invested in Active ETFs and ETPs increased 10.5% during September, reaching a new record of US$228.41 billion, according to ETFGI's September 2020 Active ETF and ETP industry landscape insights report, an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Assets invested in Active ETFs and ETPs reached a new record high of $228.41 billion at the end of Q3
YTD net inflows are at a record $51.48 billion which is significantly more than the $29.41 billion gathered through Q3 2019 as well as the US$42.10 billion gathered in all of 2019.
Source: ETFGI
Z/Yen Global Green Finance Index 6- Europe Leads The Way For Green Finance: London Loses Top Place For Quality
October 27, 2020--In the sixth Global Green Finance Index (GGFI 6), Western Europe continues to lead world centres in green finance depth and quality, taking nine of the top 10 places in depth and all top 10 places in quality. This reflects the continuing work being undertaken by European financial institutions, central banks, regulators, and the European Union to embed sustainability in their regulatory work, including their economic support in response to the covid-19 pandemic.
We indicated in GGFI 5 that London5s lead in the quality index had been narrowing and that its leading position for quality was threatened. This prediction came to pass in GGFI 6. Zurich and Amsterdam have overtaken London to lead the quality index.
Source: Z/Yen Group Limited
Short-sellers step up scrutiny of ESG stocks
October 24, 2020--Whenever big money starts flowing into a hot new sector, it seems inevitable that companies that list on the stock market fall short of hype and hope around them.
One of the market's current hottest areas is environmental, social and governance investing. And, like the cryptocurrency boom and cannabis stock surge, the flood of money has been followed closely by allegations of fraud.
These claims are often made by activist investors and short-sellers, who bet on the fall in value of stock or bond. As interest in ESG has surged, they have been on the prowl, looking for companies where investors have overlooked flaws and fraud in the rush to gain exposure to a technology or sector.
While often assailed by companies under attack, these short-sellers play a key role in identifying these issues.
Source: technocodex.com
Emerging-market currencies diverge on expectations of Biden win
October 24, 2020--Rising expectations for Joe Biden winning the US election are shaking up emerging-market currencies, with exchange rates moving to anticipate a softer line on Beijing and a tougher one on Moscow and Ankara.
As the polls have shifted further in favour of the Democratic challenger over the past month and a half, emerging-world currencies joined a global rally in riskier assets- reflecting a growing expectation that a sweeping victory for Mr Biden's party would clear the way for a second major stimulus package for the world’s biggest economy.
A broad MSCI index of EM currencies has risen about 2.4 per cent since the start of September.
A Biden presidency would "likely be seen as a more favourable outcome for emerging markets currencies as a whole, given a less confrontational approach on tariffs,"” said Meera Chandan, a currency strategist at JPMorgan Chase.
Source: technocodex.com
Emerging and Frontier Markets: Policy Tools in Times of Financial Stress
October 23, 2020--After the unprecedented hit to economic activity in emerging market economies from the COVID-19 pandemic, their economic output is projected to shrink by 3.3 percent in 2020. Central banks across emerging markets responded swiftly and forcefully with an unprecedented response of their own. They did this by using a variety of policy tools and, to a great extent, helped stabilize markets and keep them functioning.
Nearly all central banks cut rates, most of them intervened in currency markets, and about half of them cut reserve requirements for banks, which provided liquidity to the financial system and eased credit conditions. And some 20 emerging market central banks for the first time launched quantitative easing-formally known as asset purchase programs-by buying government and private sector debt to alleviate stress and help keep markets functioning. Our recent analysis in the Global Financial Stability Report shows these asset purchase programs have generally proven effective, including by helping to stabilize local financial markets.
Source: IMF
