Global ETF News Older than One Year
Smart Beta, Alternative Beta, Exotic Beta, Risk Factor, Style Premia, and Risk Premia Investing: Data Mining, Arbitraged Away, or Here to Stay?
March 24, 2016--The white paper outlines foundational characteristics of smart beta strategies and the impact of data mining and arbitrage on historical backtests when attempting to calculate accurate forward-looking return estimates for such strategies.
The key identifying assumption for the particular smart betas and time periods analyzed is motivated by Nobel Laureate Eugene Fama's famous 1991 Efficient Capital Markets survey paper (i.e. "Efficient Capital Markets: II").
Source: FT.com
RBS euro UCITS range sold to China Post
March 24, 2016--Royal Bank of Scotland has sold its exchange traded fund range to China Post Global, the international asset management arm of China Post & Capital Fund Management, a state-owned postal company.
Terms of the sale, which gives China Post a stake in the European market for the first time, weren't disclosed.
Source: internationalinvestment.net
Emerging market region bankers leery of Basel III credit risk plans
March 23, 2016--A move towards a more standardized approach to credit risk under Basel III might be too onerous for some banks, several bankers familiar with discussions on the new rules have told MLex.
They have also called for better coordination among national regulators for more effective implementation of global banking standards.
Source: mlexfs-core.com
IMF Working paper-Credit, Securitization and Monetary Policy: Watch Out for Unintended Consequences
March 23, 2016--Summary: We show evidence that interest rate hikes slowdown loan growth but lead intermediation to migrate from banks' balance sheets to non-banks via increased securitization activity.
As such, higher interest rates have the potential for unintended consequences; raising systemic risk rather than lowering it by pushing more intermediation activity to more weakly regulated sectors. In the past,this increased securitization activity was driven primarily byb private-label securitization. On the other hand, the government sponsored entities like Freddie Mac and Fannie Mae appear to react to higher policy rates by cutting back on their securitization activity but expanding loans to the Federal Home Loan Bank system.
Source: IMF
Investors replace futures with ETFs
Lower costs and wider range attract institutional funds
March 23, 2016--Competition is heating up between exchange traded funds and listed derivatives to win the business of big investors.
In recent years, retail and institutional money has flocked to ETFs, attracted by lower fees compared with buying mutual funds.
Source: FT.com
ETF Securities: Precious metals update: Gold responds to policy error
March 23, 2016--The price of the gold was driven higher on the lack of follow-up from the Federal Reserve (Fed) after it embarked on a rate tightening cycle in December 2015.
Investors fear that the US central bank is committing a policy error after it downgraded the number of times it expects to raise rates this year. The market expects the next rate rise to occur in September. We believe the Fed needs to raise rates more and sooner.
Source: ETF Securities
IMF Working paper-Avoiding the New Mediocre: Raising Long-Term Growth in the Middle East and Central Asia
March 22, 2016-- Summary: Raising the Middle East and Central Asia's long-term growth prospects is critical for meeting the region's pressing need for jobs and higher living standards.
Source: IMF
Morningstar's Annual Global Asset Flows Report Shows 2015 Inflows One-Third Lower than in 2014
Equity funds again top other category groups despite lower year-over-year inflows
March 22, 2016--Morningstar, Inc. (NASDAQ: MORN, a leading provider of independent investment research, today published its fourth annual Global Asset Flows Report examining worldwide 2015 mutual fund and exchange-traded product (ETP) asset flows.
At $949 billion, total flows in 2015 were notably lower than the $1.4 trillion that flowed into funds globally in 2014. The U.S. fund industry had new asset flows of $263 billion, down from $580 billion in 2014. Asia showed the strongest organic growth rate, 18.6 percent, among the regions analyzed by Morningstar.
view the Morningstar 2015 Global Asset Flows Report
Source: Morningstar
Money managers shake up ETF landscape
March 22, 2016--The booming exchange traded fund industry, in which investors can buy shares that track an underlying basket of securities, shows few signs of slowing down.
Within the industry, institutional investors play a prominent role, attracted by lower costs and flexibility of the product.
Source: FT.com
IMF Working paper-Financial Stability and Interest-Rate Policy: A Quantitative Assessment of Costs and Benefits
March 21, 2016--Summary: Should monetary policy use its short-term policy rate to stabilize the growth in household credit and housing prices with the aim of promoting financial stability?
We ask this question for the case of Canada. We find that to a first approximation, the answer is no-especially when the economy is slowing down.
