Global ETF News Older than One Year
IMF sees 'profound uncertainty' about global recovery
June 16, 2020--Chief economist warns the Covid crisis was more global and playing out differently than past crises
The International Monetary Fund will likely forecast a worse contraction in the global economy than previously estimated for 2020 and sees "profound uncertainty" about the path of recovery, IMF chief economist Gita Gopinath said in a new blog.
Ms Gopinath said the economic crisis triggered by the novel coronavirus pandemic was more global and playing out differently than past crises, with the services sector hit harder than manufacturing in both advanced and emerging market economies, and inflation low across the board.
Source: irishtimes.com
IMF Working paper-Who will Bear the Brunt of Lockdown Policies? Evidence from Tele-workability Measures Across Countries
June 12, 2020--Summary:
Lockdowns imposed around the world to contain the spread of the COVID-19 pandemic are having a differential impact on economic activity and jobs.
This paper presents a new index of the feasibility to work from home to investigate what types of jobs are most at risk.
We estimate that over 97.3 million workers, equivalent to about 15 percent of the workforce, are at high risk of layoffs and furlough across the 35 advanced and emerging countries in our sample. Workers least likely to work remotely tend to be young, without a college education, working for non-standard contracts, employed in smaller firms, and those at the bottom of the earnings distribution, suggesting that the pandemic could exacerbate inequality. Crosscountry heterogeneity in the ability to work remotely reflects differential access to and use of technology, sectoral mix, and labor market selection. Policies should account for demographic and distributional considerations both during the crisis and in its aftermath.
Source: IMF
IMF Working Paper-Who will Bear the Brunt of Lockdown Policies? Evidence from Tele-workability Measures Across Countries
June 12, 2020--Summary:
Lockdowns imposed around the world to contain the spread of the COVID-19 pandemic are having a differential impact on economic activity and jobs. This paper presents a new index of the feasibility to work from home to investigate what types of jobs are most at risk. We estimate that over 97.3 million workers, equivalent to about 15 percent of the workforce, are at high risk of layoffs and furlough across the 35 advanced and emerging countries in our sample.
Workers least likely to work remotely tend to be young, without a college education, working for non-standard contracts, employed in smaller firms, and those at the bottom of the earnings distribution, suggesting that the pandemic could exacerbate inequality. Crosscountry heterogeneity in the ability to work remotely reflects differential access to and use of technology, sectoral mix, and labor market selection. Policies should account for demographic and distributional considerations both during the crisis and in its aftermath.
Source: IMF
An Inconvenient Fact: Private Equity Returns & The Billionaire Factory
June 10, 2020--June 10, 2020--Abstract
Private Equity (PE) funds have returned about the same as public equity indices since at least 2006. Large public pension funds have received a net Multiple of Money (MoM) that sits within a narrow 1.51 to 1.54 range. The big four PE firms have also delivered estimated net MoMs within a narrow 1.54 to 1.67 range.
Three large datasets show average net MoMs across all PE funds at 1.55, 1.57 and 1.63. These net MoMs imply an 11% p.a. return, which matches relevant public equity indices; a result confirmed by PME calculations. Yet, the estimated total performance-related fee collected by these PE funds is estimated to be $230 billion, most of which goes to a relatively small number of individuals. The number of PE multibillionaires rose from 3 in 2005 to over 22 in 2020. Rebuttals from the big four and the main industry lobby body are provided and discussed.
Source: papers.ssrn.com
Growing Number of Institutional Investors Believe That Digital Assets Should Be a Part of Their Investment Portfolios, According to New Research from Fidelity Digital AssetsSM
June 9, 2020--More U.S. investors are finding appeal in digital assets vs. a year ago
Investors in Europe are more likely to own digital assets and have a more progressive view of the asset class vs. U.S. investors
Digital assets are gaining in favorability and appeal amongst institutional investors, with almost 80% of investors surveyed finding something appealing about the asset class.
In a comprehensive survey of almost 800 institutional investors across the U.S. and Europe, 36% of respondents say they are currently invested in digital assets, and 6 out of 10 believe digital assets have a place in their investment portfolio. These and other findings from a Fidelity Digital AssetsSM survey cast an in-depth light on a class of investors who have widely been expected to lead broad adoption of digital assets.
Source: Fidelity Digital Assets & Fidelity Center for Applied Technology
World Bank-COVID-19 to Plunge Global Economy into Worst Recession since World War II
June 8, 2020--Per Capita Incomes to Shrink in All Regions
The swift and massive shock of the coronavirus pandemic and shutdown measures to contain it have plunged the global economy into a severe contraction.
According to World Bank forecasts, the global economy will shrink by 5.2% this year.[1] That would represent the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870, the World Bank says in its June 2020 Global Economic Prospects.
Economic activity among advanced economies is anticipated to shrink 7% in 2020 as domestic demand and supply, trade, and finance have been severely disrupted. Emerging market and developing economies (EMDEs) are expected to shrink by 2.5% this year, their first contraction as a group in at least sixty years. Per capita incomes are expected to decline by 3.6%, which will tip millions of people into extreme poverty this year.
view the World Bank June 2020 Global Economic Prospects
Source: World Bank
COVID-19 to Plunge Global Economy into Worst Recession since World War II
June 8, 2020--Per Capita Incomes to Shrink in All Regions
The swift and massive shock of the coronavirus pandemic and shutdown measures to contain it have plunged the global economy into a severe contraction.
According to World Bank forecasts, the global economy will shrink by 5.2% this year.[1]
That would represent the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870, the World Bank says in its June 2020 Global Economic Prospects.
Economic activity among advanced economies is anticipated to shrink 7% in 2020 as domestic demand and supply, trade, and finance have been severely disrupted. Emerging market and developing economies (EMDEs) are expected to shrink by 2.5% this year, their first contraction as a group in at least sixty years. Per capita incomes are expected to decline by 3.6%, which will tip millions of people into extreme poverty this year.
view the World Bank Global Economic Prospects 2020 report
Source: World Bank
Threat from climate change to financial stability bigger than Covid-19
June 7, 2020--Report urges capital requirement rules for banks lending to fossil fuel groups to be tightened
Climate change poses a bigger threat to financial stability than the coronavirus pandemic and the rules on bank lending to fossil fuel groups must be tightened to address it, a new report has warned.
In his latest research for the Finance Watch advocacy body, Thierry Philipponnat -a board member at the French financial regulator, and one of the EU's technical experts on sustainable finance- has recommended increasing the risk weightings banks must apply to their oil, gas and coal exposures. This would make them treat fossil fuel lending in the same way as other risky investments, increasing their capital requirements to insulate them against possible losses.
Source: FT.com
Covid-19 and emerging economies: What to expect in the short- and medium-term
June 3, 2020--This article was originally published in the Observer Research Foundation. As Brazil, Russia, India and Mexico record the fast spread of the Covid-19 contagion, a third wave of the pandemic is reaching the emerging world. As a result, business sentiment has decreased in March and April in the region.
As Brazil, Russia, India and Mexico record the fast spread of the Covid-19 contagion, a third wave of the pandemic is reaching the emerging world. As a result, business sentiment has decreased in March and April in the region. What’s more, as emerging economies gradually moved towards tighter mobility restrictions, the lack of mobility is set to weigh on the economic outlook. In fact, the International Monetary Fund (IMF) is expecting the emerging world to enter a recession of -1 percent in 2020, which could be worse than the aftermath of the global financial crisis in 2008.
Source: bruegel.org
BetaShares Market Trends: June 2020
June 3, 2020--Key global trends-equity rally continues
Global equities pushed higher in May, continuing the rebound of the previous month, reflecting ongoing hopes of a speedy return to economic normalcy as both new COVID-19 cases and social distancing restrictions eased further in most advanced economies.
Risk-on sentiment contributed to an easing in the U.S. Dollar, though bond yields held steady and gold prices rose further.
The MSCI All-Country World Equity Return Index rose by 4.3% in local currency terms, after a gain of 10.4% in April. As seen in the chart set below, global bond yields remain in a strong downtrend*, and gold prices in a strong uptrend. The previous uptrend in $US has levelled off into a choppy range over recent months. Global equities have effectively been in an extended choppy range since early 2018.
Source: Betashares
