Global ETF News Older than One Year
IMF Working Paper-Rogue Waves: Climate Change and Firm Performance
May 27, 2022--Summary:
Climate change is an existential threat to the global economy and financial markets. There is a large body of literature documenting potential macroeconomic consequences of climate change, but firm-level empirical research on how climate change affects the performance of firms remains scarce.
This paper aims to close this gap by empirically investigating the impact of climate change vulnerability on corporate performance using a large panel dataset of more than 3.3 million nonfinancial firms from 24 developing countries over the period 1997-2019.
We find that nonfinancial firms operating in countries with greater vulnerability to climate change tend to experience difficulty in access to debt financing even at higher interest rates, while being less productive and profitable relative to firms in countries with lower vulnerability to climate change. We confirm these findings with alternative measures of climate change vulnerability. Furthermore, partitioning the sample reveals that these effects are significantly greater for smaller firms, especially in high-risk sectors and countries and countries with weaker capacity to adapt to and mitigate the consequences of climate change.
Source: IMF
IMF Working paper-For Whom the Bell Tolls: Climate Change and Inequality
May 27, 2022--Summary:
Climate change is the defining challenge of our time with complex and evolving dynamics. The effects of climate change on economic output and financial stability have received considerable attention, but there has been much less focus on the relationship between climate change and income inequality. In this paper, we provide new evidence on the association between climate change and income inequality, using a large panel of 158 countries during the period 1955-2019.
We find that an increase in climate change vulnerability is positively associated with rising income inequality. More interestingly, splitting the sample into country groups reveals a considerable contrast in the impact of climate change on income inequality. While climate change vulnerability has no statistically significant effect on income distribution in advanced economies, the coefficient on climate change vulnerability is seven times greater and statistically highly significant in the case of developing countries due largely to weaker capacity for climate change adaptation and mitigation.
Source: IMF
ETFGI reports thematic ETFs listed globally gathered net inflows of US$7.16 billion during April 2022
May 26, 2022--ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs/ETPs ecosystem, reported today that Thematic ETFs listed globally gathered net inflows of US$7.16 billion during April, bringing year to date net inflows to US$38.62 billion.
Total assets invested in Thematic ETFs and ETPs have decreased by 6.8% from US$450 billion at the end of March 2022 to US$419 billion, according to ETFGI's April 2022 ETF and ETP Thematic industry landscape insights report, an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Assets of $419 Bn invested in Thematic ETFs and ETPs listed globally at the end of April 2022.
Assets decreased by 3.8% YTD in 2022, going from $436 Bn at end of 2021, to $419 Bn.
Net inflows of $7.16 Bn during April 2022.
YTD net inflows of $38.62 Bn are 2nd highest after YTD net inflows in 2021 of $49.29 Bn.
$69.55 Bn in net inflows gathered in the past 12 months.
Source: ETFGI
Western financial warfare and Russia's de-dollarization strategy: How sanctions on Russia might reshape the global financial system
May 24, 2022--Since 2014, Russia's de-dollarization plan has been guided by security and geopolitical considerations. By dumping the US dollar from its foreign currency reserves, Russia diverted from the traditional approach where liquidity and the credibility of the issuer determine the choice of currency.
In 2022, Russia has doubled down on its efforts to de-dollarize the economy. What started as de-dollarization in 2014, transformed into full-blown rouble-ization in 2022.
Following the dynamic of an emerging multipolar world order, the global financial system is also gravitating towards fragmentation and currency multipolarity.
Source: fiia.fi
New travel and tourism study shows need to prepare for future headwinds, as sector shows signs of recovery
May 24, 2022--The World Economic Forum's biennial travel and tourism study finds a recovering sector following pandemic lows, but the recovery has been uneven and challenges remain.
Development strategies are crucial to build resilience and support those who depend on the industry for work.
The Travel and Tourism Development Index assesses 117 economies, identifying key factors in enabling the sustainable and resilient growth of travel and tourism economies; Japan takes the top spot.
The World Economic Forum released today its latest travel and tourism study, revealing that the sector is showing signs of recovery in many parts of the world after being hard-hit by the COVID-19 pandemic. Japan, the United States, Spain, France and Germany are at the top of the list.
The Travel & Tourism Development Index 2021: Rebuilding for a Sustainable and Resilient Future, ranks 117 economies on a range of factors that are crucial to the development, sustainability and resiliency of their travel and tourism industry, which in turn contributes to economic and social development.
Source: weforum.org
Global Carbon Pricing Generates Record $84 Billion in Revenue
May 24, 2022--Global carbon pricing revenues increased by 60% over past year, according to latest World Bank report
Global carbon pricing revenue in 2021 increased by almost 60 percent from 2020 levels, to around $84 billion, providing an important source of funds to help support a sustainable economic recovery, finance broader fiscal reforms, or invest in communities as part of the low-carbon transition future, according to the World Bank's annual "State and Trends of Carbon Pricing" report released today.
The report, which presents the latest carbon pricing developments around the world, finds that there are 68 direct carbon pricing instruments operating today: 36 carbon taxes and 32 Emissions Trading Systems (ETSs).
Source: worldbank.org
ETFGI reports ESG ETFs listed globally gathered net inflows of 6.83 billion US dollars during April 2022
May 23, 2022--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 listed globally gathered net inflows of US$6.83 billion during April, bringing year to date net inflows to US$31.45 Bn which is much lower than the US$66.65 Bn gathered at this point last year.
During the month, total assets invested in ESG ETFs decreased by 7.3% from US$398.33 billion at the end of March 2022 to US$369.31 billion, according to ETFGI's April 2022 ETF and ETP ESG industry landscape insights report, the monthly report which is part of an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Assets of $369.31 Bn invested in ESG ETFs listed globally at the end of April 2022.
Assets decreased 7.5% YTD in 2022, going from $399.46 Bn at end of 2021 to $369.31 Bn at the end of April.
Net inflows of $6.83 Bn during April 2022.
YTD net inflows of $31.45 Bn are the second highest on record, after YTD net inflows in 2021 of $66.65 Bn.
$128 Bn in net inflows gathered in the past 12 months.
Source: ETFGI
GDP Growth-First quarter of 2022, OECD
May 23, 2022--OECD GDP growth slows sharply in the first quarter of 2022
In the first quarter of 2022, gross domestic product (GDP) in the OECD rose by just 0.1% quarte-on-quarter according to provisional estimates, a sharp slowdown compared with the 1.2% increase in the fourth quarter of 2021.
In the G7, quarter-on-quarter GDP growth turned negative in Q1 2022, falling by 0.1% compared with an increase of 1.2% in Q4 2021. The G7 result in the first quarter of 2022 reflects negative GDP growth in the United States (minus 0.4%), Italy (minus 0.2%) and Japan (minus 0.2%), as well as zero growth in France and weaker positive growth in the United Kingdom (0.8%) and Canada (1.4%) than in the previous quarter.Germany was the only G7 country where the pace of growth increased, with GDP growth of 0.2% in the first quarter of 2022 compared with a contraction of 0.3% in the previous quarter.
Source: OECD
WEF-Chief Economists Outlook: May 2022
May 23, 2022-The May 2022 edition of the Chief Economists Outlook comes out amid extremely high uncertainty about geopolitical developments, the trajectory of the global economy and the next steps for economic policy.
Instead of entering a post-COVID recovery phase, economies are experiencing additional shocks, first and foremost from the war in Ukraine and associated geopolitical repercussions, but also from new outbreaks of COVID-19 and lockdowns in major industrial centres.
Source: weforum.org
BIS Working Paper-Banking in the shadow of Bitcoin? The institutional adoption of cryptocurrencies
May 18, 2022--Summary
Focus
The market capitalisations of cryptocurrencies and related economic activities have grown phenomenally in recent years. While the role of retail investors has received much attention,we know less about the role of financial intermediaries in this sector. How significant is the presence of traditional intermediaries such as banks and investment funds in crypto markets,and what motivates them to take on cryptocurrency exposures? And how important are novel intermediaries such as crypto exchanges?
Contribution We gauge the significance of financial intermediaries in crypto markets,using a novel global supervisory database of banks' cryptocurrency exposures and a range of additional data sources.
We assess the factors that determine banks' holdings of cryptocurrencies. In addition,we investigate the role played by novel crypto exchanges,and examine the cross-country drivers of institutionalisation.
Findings
The potential for cryptocurrencies to scale up quickly calls for a comprehensive approach to assessing and mitigating risks,even though the interlinkages between crypto markets and mainstream finance have remained limited. The exposures of major banks to cryptocurrency exposures are currently still very modest,amounting to less than USD 200 million in 2020. We find that banks are more likely to hold cryptocurrencies when country indicators for greater innovation capacity,more advanced economic development,and financial inclusion are high.
Source: BIS.org
