Global ETF News Older than One Year
IMF Working paper-Extensive Margin Adjustment of Multi-Product Firm and Risk Diversification
June 30, 2017--Summary:
Product scope adjustment is a key mechanism through which multi-product firms achieve efficient resource allocations. In this paper, we take a novel perspective to study firms' product scope adjustment behavior through the lens of asset pricing. Using a unique panel scanner data set containing detailed information on products, matched with the financial information of their manufacturers, we find that multi-product firms with higher product turnover have lower financial risks and lower risk premia.
To understand this channel, we propose a stylized model with a time-dependent (Calvo-type) product turnover rate to highlight the 'risk absorption channel' of product scope adjustment. In response to an economy-wide shock, a firm that can adjust its product scope more flexibly shows lower excess equity returns and lower asset volatility.
Source: IMF
ULTUMUS-Global ETF Monitor
June 30, 2017--Americas:
Goldman Sachs has launched a new ETF, Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW), which tracks the Solactive Equal Weight US Large Cap Index. The index captures the 500 largest American companies and weighs them equally.
Active ETF specialist AdvisorShares has launched a new ETF offering exposure to the press and tech sectors, the AdvisorShares New Tech and Media ETF (FNG). FNG invests at least 80% of its assets (in technology and media companies, including social media and internet retail companies.
iShares has launched two new socially responsible bond ETFs,... Europe:UBS has cross listed its UBS MSCI USA Select Factor Mix (Net Return) ETF into Milan. USFMD...
Source: ULTUMUS-Financial Data Management
ULTUMUS-Global ETF Monitor
June 29, 2017--Asia:
Korean issuer KBSTAR has launched two new active ETFs. The Short-term KTB Active ETF (272560), which tries to beat short term Korean government bonds (3- 15 months); and the KBSTAR Mid-long Term KTB Active ETF (272570), which tries to beat the an index of mid-long term government bonds (4-5 years).
KODEX has launched two new active fixed income ETFs.
Europe:
Ishares has cross listed their MSCI World High Div & MSCI Europe Mid Cap, QDVW & QDVV
view more
Source: IP&E
Basel Committee consults on a simplified alternative to the market risk standardised approach
June 29. 2017--The Basel Committee on Banking Supervision today published the consultative document Simplified alternative to the standardised approach to market risk capital requirements.
In January 2016, the Basel Committee issued revised Minimum capital requirements for market risk. This global standard includes a standardised approach which is used by banks other than those that are large and internationally active.
Source: BIS
Sixty-six Countries Struggling with Oil, Gas and Mining Governance-Resource Governance Index
June 28, 2017--New index shows promise in some developing countries, but raises alarms over sovereign wealth funds and citizens' freedom to hold governments to account.
The majority of governments inadequately govern their oil, gas and mining sectors, according to the 2017 Resource Governance Index. Sixty-six countries were found to be weak, poor or failing in their governance of extractive industries. Less than 20 percent of the 81 countries assessed achieved good or satisfactory overall ratings.
view the 2017 Resource Governance Index
Source: Natural Resource Governance Institute (NRGI)
Blockchain: The Next Generation of the Internet
June 28, 2017--Blockchain, or distributed ledger technology, signals the beginning of a new era of the internet that will be defined by value rather than information, according to a World Economic Forum white paper
However, its potential for transforming industries and society will require new kinds of cooperation between stakeholders
Blockchain, or distributed ledger technology, could soon give rise to a new internet era even more disruptive and transformative than the current one, according to a white paper, Realizing the Potential of Blockchain, published by the World Economic Forum today.
Source: WEF (World Economic Forum)
ETF Securities-Investment Insights June 2017-Which Market Shocks Matter for Metals?
June 28, 2017--Summary
Heightened equity volatility historically benefits gold and
platinum, while equity drawdowns favor gold and silver.
Positive oil shocks tend to boost all precious metals while platinum has had the least sensitivity to extreme price drops
Shifts in reserve currencies may drag on precious metals, but shocks from emerging market currencies may be limited.
Source: etfsecurities.com
China's Current Account: External Rebalancing or Capital Flight?
June 28, 2017--Abstract: This paper examines an anomaly in China's current account: its large and rapidly growing travel expenditure. Drawing evidence from counterparty data, Chinese international arrival statistics, and gravity equation models extended to travel trade, I find that a significant amount of China's travel spending in the period 2014-2016 could not be explained by accounting factors or economic fundamentals.
The unexplained travel imports are inversely associated with domestic growth and positively associated with renminbi depreciation expectations against the dollar, suggesting that they are less likely to be consumption of goods and services abroad than domestic residents' acquisition of foreign financial assets.
Source: federalreserve.gov
China's fake travel spending masks capital flight, warns Fed
June 28, 2017--Outflows have also artificially cut country's trade surplus, says discussion paper
Capital flight disguised as overseas tourism spending has artificially cut China's reported trade surplus while masking the extent of investment outflows, according to research by the US Federal Reserve. A significant share of overseas spending classified in official data as travel-related shopping, entertainment and hospitality may over a 12-month period have instead been used for investment in financial assets and real estate, the Fed paper argued.
Source: FT.com
