Global ETF News Older than One Year
Exchange Traded Funds are directly financing fossil fuel companies at large scale-Oxford research
June 15, 2021--Financial institutions with over $70 trillion in assets have pledged to achieve net zero portfolios and loanbooks by 2050, including meeting ambitious interim 2030 targets.
However, new research by the Oxford Sustainable Finance Programme reveals that passive funds not only hold fossil fuel assets, but directly finance them by buying large quantities of new bonds issued by fossil fuel companies.
To track and manage transactions that are channeling capital flows directly into fossil fuels, the Oxford researchers propose a new metric, Primary Market Carbon Exposure (PMCE). PMCE measures the proportion of securities bought in primary market transactions, for example shares at IPO or new bond issuance, from fossil fuel companies.
They find that between 2015-2020, 14% of the value of new bond issues bought by U.S. corporate bond Exchange Traded Funds (ETFs) were in fossil fuels.
For example, the largest bond ETF, the iShares Core U.S. Aggregate Bond ETF with $88 billion in assets, had a PMCE of 14% in corporate bonds, while the iShares iBoxx USD Investment Grade and High Yield ETFs, with $39 billion and $22 billion in assets, had PMCEs of 9% and 20% respectively. The researchers also apply this metric to ETFs bought by the US Federal Reserve in 2020, resulting in a PMCE of 13%.
Source: smithschool.ox.ac.uk
Hedge funds expect to hold 7% of assets in crypto within five years
June 15, 2021--Hedge funds expect to hold $310 billion in cryptocurrencies within 5 years-more than 7% of their assets.
Hedge funds plan to ramp up their crypto holdings to more than 7% of assets by 2026, a survey showed. That would equate to around $313 billion of cryptocurrency holdings, Intertrust Group said.
Source: businessinsider.in
BlackRock's ETF assets race past $3tn
June 14, 2021--Assets in BlackRock's exchange traded fund business raced beyond the $3tn milestone for the first time in May as the ETF industry's global assets surged to a fresh all-time high above $9tn.
BlackRock predicted last week that the ETF industry's assets would reach $15tn as early as the end of 2025, helped by increasing demand for environmentally friendly strategies and more usage by debt investors.
ETFs currently account for just 3 per cent of assets held in equity and bond markets globally, according to BlackRock.
Source: telegraf.id
Climate change is making ocean waves more powerful, threatening to erode many coastlines
June 14, 2021--A new report looks at the impacts of rising ocean temperatures on the size of waves.
Rising ocean levels and stronger waves could have devastating consequences for coastal communities.
But reducing greenhouse emissions and helping communities to adapt can help to reverse these effects.
Sea level rise isn't the only way climate change will devastate the coast. Our research, published today, found it is also making waves more powerful, particularly in the Southern Hemisphere.
We plotted the trajectory of these stronger waves and found the coasts of South Australia and Western Australia, Pacific and Caribbean Islands, East Indonesia and Japan, and South Africa are already experiencing more powerful waves because of global warming.
This will compound the effects of sea level rise, putting low-lying island nations in the Pacific- such as Tuvalu, Kiribati and the Marshall Islands- in further danger, and changing how we manage coasts worldwide.
view the Natural Variability and Warming Signals in Global Ocean Wave Climates report
Source: weforum.org
World Bank Report: Investing in Protected Areas Reaps Big Rewards
June 14, 2021--A new World Bank report released today shows that for every dollar governments invest in protected areas and support for nature-based tourism, the economic rate of return is at least six-times the original investment.
The report, "Banking on Protected Areas: Promoting sustainable nature-based tourism to benefit local communities" found that the original investment triggered a chain of benefits for local businesses and households-even for those not directly connected to the tourism sector.
Given these economic benefits, the report argues that the promotion of sustainable tourism in protected areas should be included in COVID-19 economic recovery plans, an investment that creates local jobs, improves incomes and protects biodiversity.
view the World Bank Report: Investing in Protected Areas Reaps Big Rewards
Source: worldbank.org
ETF securities lending almost doubles in four years
June 9, 2021--The funds' securities lending jumps 77% outstripping the 21% growth of the broader market
Securities lending by exchange traded funds has almost doubled since 2017, data from EquiLend show, reflecting the huge growth in assets under management in the ETF industry as a whole.
The value of ETFs' on-loan balances-the value of securities on loan at any point in time- rose 77 per cent, from an average of $37.5bn in 2017 to $66bn between January 1 and mid-May, according to EquiLend, a securities lending platform. This dwarfed an overall increase of 21 per cent in the wider securities lending market.
Source: FT.com
Trackinsight: Shipping, Silver and Sector Plays Dominate ETF Markets in May
June 8, 2021--A new record high of $8.8 Trillion has been reached by ETF assets in May. Significant positive flows across European and North American ETFs were registered over this past month, achieving a total of $509 Billion of new flows year-to-date.
Over this period, investors have been migrating to traditional store-value products such as Gold and Silver. Finally, the cost of shipping good has skyrocketed leading to a 192% increase in the Breakwave Dry Bulk Shipping ETF since the start of the year.
Source: trackinsight.com
Four Factors Behind the Metals Price Rally
June 8, 2021--As economies reopen in various parts of the world, the price of some commodities has soared, including the prices of prominent industrial metals. The extent to which the metals price rally may lose steam depends on how multiple factors will play out.
As our latest chart of the week shows, metals prices have increased by 72 percent relative to their pre-pandemic levels-reaching a nine-year high in May (in inflation adjusted terms). The increase has been broad-based across industrial metals-copper is up 89 percent in May (year-over-year), iron ore is up 116 percent, and nickel is up 41 percent. The prices of most agricultural and energy commodities are also tracking upward, but at a slower rate. Energy commodities (oil, coal, and natural gas), in particular, sit only a few percentage points above pre-pandemic levels.
Source: IMF
Global Recovery Strong but Uneven as Many Developing Countries Struggle with the Pandemic's Lasting Effects
June 8, 2021--Output to remain below pre-COVID trends despite robust rebound by US and China
The global economy is expected to expand 5.6% in 2021, the fastest post-recession pace in 80 years, largely on strong rebounds from a few major economies.
However, many emerging market and developing economies continue to struggle with the COVID-19 pandemic and its aftermath, the World Bank says in its June 2021 Global Economic Prospects.
Despite the recovery, global output will be about 2% below pre-pandemic projections by the end of this year. Per capita income losses will not be unwound by 2022 for about two-thirds of emerging market and developing economies. Among low-income economies, where vaccination has lagged, the effects of the pandemic have reversed poverty reduction gains and aggravated insecurity and other long-standing challenges.
view the World Bank Global Economic Prospects June 2021 report
Source: worldbank.org
World Bank The Global Economic Outlook in five charts
June 8, 2021-The global economy is set to expand 5.6 percent in 2021-its strongest post-recession pace in 80 years. This recovery is uneven and largely reflects sharp rebounds in some major economies amid highly unequal vaccine access, with many poorer countries facing subdued prospects.
By 2022, last year's per capita income losses are not anticipated to be reversed in about two-thirds of emerging market and developing economies (EMDEs). To help repair the damage from the pandemic, policy makers will need to promote growth-enhancing reforms and steer their economies onto a green, resilient, and inclusive development path.
1. Global growth is projected to recover in 2021, fueled by robust rebounds in some major economies
The strength of the near-term global recovery is largely attributable to a few major economies, such as the United States and China, with many emerging market and developing economies (EMDEs) lagging behind. The United States and China are each expected to contribute over one-quarter of global growth in 2021, with the U.S. contribution nearly triple its 2015-19 average.
Source: worldbank.org
