Global ETF News Older than One Year
2013 Midyear SPDR(R) ETF & Investment Outlook: The Search for Yield Evolves
July 11, 2013--With the Dow Jones Industrial Average breaking 15,000 and other markets hitting record highs around the globe, categorizing the market as optimistic seems more than reasonable. But the best performing
global sector, health care, is traditionally considered one of the most defensive.1 What gives? Can the
fact that global treasuries' total returns are negative confirm this sentiment? Commodities are in the red
as well. Is this the start of the next great bull market we have all been waiting for? What, if anything, can
ETF flows tell us?
2013 ETF INDUSTRY HIGHLIGHTS
With nearly $84 billion of inflows during 2013, investors have
found comfort in equity ETFs, but not at the expense of fixed
income funds which brought in $30 billion this year. While this
may simply be a function of the continued acceptance of fixed
income ETFs by a wider investor base, flows as a percentage of
assets were slightly stronger than equities. Investors were busy
putting capital to work in those asset classes, but commodity
exposure has clearly been out of favor in 2013. Even with a sizable
outflow from commodities, the global ETF industry has seen over
$93 billion of net flows over the first five months of the year.
Digging deeper, one can see trends at play in greater detail.
Broad market equity funds have seen the greatest flows on an absolute basis with over $25 billion coming in the door. Within equities, the dividend category also added a staggering $12.6 billon, highlighting investors continued search for yield in today’s environment. Potentially even more impressive is the growth of the beta category, which includes the popular low volatility ETFs. This group saw $6.8 billion of inflows representing over 47% of 2012 assets.
visit www.spdrs.com for complete report
Source: www.spdrs.com
BP registers U.S. unit as swap dealer with regulator
July 10, 2013--Britain's BP Plc (BP.L) on Wednesday filed to register its U.S. unit as a swap dealer with U.S. authorities, a company spokesman said, becoming the first oil company to face tough oversight of its derivatives business.
Since the beginning of the year, the Commodity Futures Trading Commission requires companies to register as dealers if they trade more than $8 billion in swaps a year.
Source: Reuters
Markets: The investor's dilemma
July 10, 2013--Making more money may require resorting to the 'three dirty words of finance'.
Stocks are expensive. Bonds are expensive. What is an investor to do? Unfortunately, the only answer appears to be to invest in new and unfamiliar assets, taking new and unfamiliar risks.
Source: FT.com
SPDR University Latest Commentary-Weekly Market Report-July 5, 2013
July 10, 2013--ECONOMIES: Employment rises in the US. But, jobs slip in Canada. The Bank of England and the European Central Bank
strike dovish tones. Business confidence improves in Japan. The
Reserve Bank of Australia leaves policy rates unchanged but sees scope for more easing.
MARKETS: Equities are mixed. A good US jobs print sends US Treasury yields sharply higher. Dovish European central bankers keep European bonds better bid, except in Portugal where the governing coalition is crumbling. USD is broadly bid. AUD falls to a nearly 3-year low. Gold falls. Oil jumps on Egyptian coup and Libyan outages.
NEXT WEEK PREVIEWED
SPOTLIGHT: The Bank of Japan should leave monetary policy unchanged. The Fed minutes threaten to foment market
volatility yet again
visit www.spdrs.com for complete report
Source: www.spdrs.com
Vanguard assumes lead in ETF race
July 9, 2013--Vanguard has surged into a lead at the halfway stage of the race among exchange traded fund providers for investors cash in 2013, moving ahead of its larger rival BlackRock.
The leadership change occurred in June when the ETF industry registered its first month of net investor outflows for more than two years.
Source: FT.com
Asset management hits record level
July 9, 2013--The animal spirits are stirring again in the markets as the asset management industry grows to a record level and shrugs off some of the debilitating effects of the financial crisis.
The amount of money invested globally by asset managers has for the first time surpassed the highs before the 2007-08 crisis, according to Boston Consulting Group, the management consultants.
Source: FT.com
IMF-World Economic Outlook Update-Growing Pains
July 9, 2013--Global growth is projected to remain subdued at slightly above 3 percent in 2013, the same as in 2012. This is less than forecast in the April 2013 World Economic Outlook (WEO), driven to a large extent by appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as a more protracted recession in the euro area.
Downside risks to global growth prospects still dominate: while old risks remain, new risks have emerged, including the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals. Stronger global growth will require additional policy action. Specifically, major advanced economies should maintain a supportive macroeconomic policy mix, combined with credible plans for reaching medium-term debt sustainability and reforms to restore balance sheets and credit channels. Many emerging market and developing economies face a tradeoff between macroeconomic policies to support weak activity and those to contain capital outflows. Macroprudential and structural reforms can help make this tradeoff less stark.
Source: IMF
Discussion on balancing risk sensitivity, simplicity and comparability within the Basel capital standards initiated by the Basel Committee
July 8, 2013-The Basel Committee on Banking Supervision today released a Discussion Paper on the balance between risk sensitivity, simplicity and comparability, within the Basel capital standards.
In response to the financial crisis, the Basel Committee introduced a range of reforms designed to substantially raise the resilience of the banking system against shocks. In addition to these reforms, during 2012 the Committee commissioned a small group of its members (the Task Force on Simplicity and Comparability) to undertake a review of the Basel capital framework. The goal of the Task Force was to identify opportunities to remove undue complexity within the framework, and improve the comparability of its outcomes. The creation of the Task Force acknowledged that the framework has steadily grown over time as risk coverage has been expanded and more sophisticated risk measurement methodologies have been introduced.
view The regulatory framework: balancing risk sensitivity, simplicity and comparability
Source: BIS
BlackRock Research- ETP Landscape-Market sentiment drives rare outflows
July 8, 2013--Starting on May 22nd, Ben Bernanke's remarks about the Fed tapering its bond buying program set global investors into flight from a variety of asset classes.
Many of these investors turned to ETPs to execute their investment views, resulting in net outflows in June of ($8.2bn), along with elevated ETP trading volumes.
ETFs accounted for 31% of all trading volume in US equity markets in June, up from 20-25% in recent months.
Emerging Markets (EM) Equities saw redemptions continue in June with ($6.6bn). This is the fifth consecutive month of outflows for EM Equities following months of substantial inflow.
Fixed Income ETPs saw monthly outflows for the first time since December 2010. Investors continued to move to shorter duration ETPs, which attracted $5.5bn in June. Other Fixed Income maturity categories saw outflows of ($13.5bn).
Gold ETP redemptions continued in June – a six month trend to date – with ($4.1bn) of outflows, bringing YTD outflows to ($28.2bn).
Developed Market Equity ETPs continued to attract new money, adding $11.8bn in June which is down from May’s level of $30.3bn, but on par with April flows of $13.2bn.
Source: BlackRock
ETFS Precious Metals Weekly-China and Central Banks Step Up Gold Buying as Price Falls
July 8, 2013--Strong June US payroll numbers released on Friday sent precious metals lower.
Not only were June figures higher than consensus expectations, there were
sizable upward revisions to previous months' figures. Investors took this as
further confirmation the Fed will be reducing its bond buying program in the next few months.
On the other hand, forward guidance by the European Central Bank and the Bank of England (the latter under new leadership), made it clear that they don’t foresee tightening monetary conditions any time soon. This helped push up the US dollar, which further weighed on precious metals performance. Earlier in the week, the Chinese push to ease the liquidity crunch in China’s interbank market is helping allay fears of a sharp slowdown in China’s growth. Easier monetary conditions may provide support for platinum and palladium in coming weeks and months. While rising rates and a strong US dollar have been negative for gold price performance, as noted below, central banks and China consumers appear to view the price weakness as a buying opportunity.
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Source: ETF Securities
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