Global ETF News Older than One Year
Shell to review Dow Jones Sustainability Index as bonus metric after being dumped from benchmark
Response to “subjective” decision by Dow Jones/SAM
October 18, 2010--Oil giant Shell is reviewing whether to continue using the Dow Jones Sustainability Indexes as a metric to gauge senior management bonuses after it was deleted from the index.
Performance against the index currently accounts for half of the sustainable development part – or 10% of variable pay – of a scorecard Shell uses to judge executive committee members
Dow Jones and its partner SAM, the sustainable investing arm of Robeco, dropped Shell from the index in September after having removed BP in June following the Gulf of Mexico oil spill.
view the Shell Sustainability Report
Source: Responsible Investor
Global Aging Preparedness Index
October 17, 2010--The world is being overtaken by a stunning demographic transformation known as global aging. Over the next few decades, global aging promises to affect everything from business psychology and workforce productivity to the shape of the family and the direction of global capital flows. Perhaps most fatefully, it could throw into question the ability of societies to provide a decent standard of living for the old without imposing a crushing burden on the young.
Which countries are most prepared to meet the challenge? And which countries are least prepared? The Global Aging Preparedness Index (or GAP Index) provides the first comprehensive quantitative assessment of the progress that countries worldwide are making in preparing for global aging, and particularly the old-age dependency dimension of the challenge. The GAP Index consists of two separate subindices—the fiscal sustainability index and the income adequacy index. It covers twenty countries, including both developed economies and emerging markets. To learn more about the GAP Index, please visit its website at gapindex.csis.org.
view Global Aging Preparedness Index Full Report
Source:Center for Strategic and International Studies (CSIS)
IOSCO publishes recommendations for market interventions and securitisation in Emerging Markets
October 15, 2010--The Emerging Markets Committee (EMC) of the International Organization of Securities Commissions (IOSCO) meeting in Istanbul this week has approved two reports containing recommendations for regulators in emerging markets jurisdictions aimed at assisting them in relation to market interventions and the securitisation market.
Effectiveness of Market Interventions in Emerging Markets-Final Report
Securitization and Securitized Debt Instruments in Emerging Markets-Final report
Source: IOSCO
US Treasury delays ruling on renminbi
October 15, 2010--The US Treasury has announced it will push back a decision about whether to brand China a currency manipulator, underlining a difficult trade-off between placating an angry domestic constituency and stopping international tensions over currency escalating.
For the second time this year, Barack Obama’s administration on Friday delayed the twice-yearly currency report, which assesses the exchange rate policies of trading partners. It has not formally named any country as a manipulator since 1994 despite rising demands from Congress.
Source: FT.com
BlackRock ETF Landscape Industry Highlights, End Q3 2010
October 14, 2010--Below are the ETF Landscape industry highlights as at end Q3 2010.
Global ETF and ETP Industry end Q3 2010:
The global ETF industry had 2,379 ETFs with 5,204 listings, assets of US$1,181.3 Bn, from 129 providers on 45 exchanges around the world.
The global ETF and ETP industry combined had 3,257 products with 6,649 listings, assets of US$1,328.2 Bn from 158 providers on 48 exchanges around
the world.
European ETF and ETP Industry end Q3 2010:
The European ETF industry had 1,030 ETFs with 3,396 listings, assets of US$256.2 Bn, from 37 providers on 21 exchanges.
In September 2010, net new assets into European domiciled ETFs/ETPs totalled US$5.0 Bn. Equity ETFs/ETPs gathered US$3.9 Bn net inflows, of which US$1.8 Bn went into emerging markets equity ETFs/ETPs and US$1.1 Bn into European equity ETFs/ETPs. Fixed income ETFs/ETPs saw net inflows of US$0.4 Bn, of which US$0.8 Bn went into government bond ETFs/ETPs while money market ETFs/ETPs saw net outflows of US$0.7 Bn. Commodity ETFs/ETPs saw net inflows of US$0.7 Bn, of which US$0.6 Bn went into precious metals ETFs/ETPs while agriculture ETFs/ETPs saw net outflows of US$0.2 Bn.
In September 2010, net new assets into European domiciled ETFs totalled US$4.8 Bn. db x-trackers has received the largest net inflows with US$2.2 Bn, followed by iShares with US$1.0 Bn net inflows, while Lyxor Asset Management had the largest net outflows with US$0.1 Bn.
United States ETF and ETP Industry end Q3 2010:
The United States ETF industry had 890 ETFs, assets of US$797.2 Bn, from 29 providers on two exchanges.
In September 2010 US domiciled ETFs/ETPs experienced net inflows totalling US$28.0 Bn. Equity ETFs/ETPs saw US$24.7 Bn net inflows, of which US$18.8 Bn went into North American equity ETFs/ETPs and US$5.6 Bn into emerging markets equity ETFs/ETPs. Fixed income ETFs/ETPs saw net inflows of US$1.5 Bn, of which US$0.9 Bn went into high yield ETFs/ETPs and US$0.7 Bn into corporate bond ETFs/ETPs. Commodity ETFs/ETPs experienced US$1.1 Bn net inflows, of which US$1.2 Bn went into precious metals ETFs/ETPs, while broad commodity exposure ETFs/ETPs saw net outflows of US$0.2 Bn in September 2010.
In September 2010, United States domiciled ETFs experienced net inflows totalling US$26.5 Bn. State Street Global Advisors gathered the largest net inflows with US$12.3 Bn, followed by PowerShares with US$4.8 Bn net inflows, while ProShares saw US$0.3 Bn net outflows in September 2010.
Canada ETF and ETP Industry end Q3 2010:
The Canadian ETF industry had 152 ETFs, assets of US$34.0 Bn, from four providers on one exchange.
Asia Pacific (ex-Japan) ETF and ETP Industry end Q3 2010:
The Asia Pacific (ex-Japan) ETF industry had 185 ETFs with 289 listings, and assets of US$51.3 Bn from 56 providers on 13 exchanges.
Japan ETF and ETP Industry end Q3 2010:
The Japanese ETF industry had 74 ETFs with 77 listings, and assets of US$30.7 Bn from six providers on two exchanges.
Latin America ETF and ETP Industry end Q3 2010:
The Latin American ETF industry had 21 ETFs with 347 listings, and assets of US$10.0 Bn from three providers on three exchanges.
Source: Source: Global ETF Research & Implementation Strategy Team, BlackRock
Government Investment and Fiscal Stimulus-an IMF Working paper
October 14, 2010--Summary: Effects of government investment are studied in an estimated neoclassical growth model. The analysis focuses on two dimensions that are critical for understanding government investment as a fiscal stimulus: implementation delays for building public capital and expected fiscal adjustments to deficit-financed spending.
Implementation delays can produce small or even negative labor and output responses to increases in government investment in the short run. Anticipated fiscal adjustments matter both quantitatively and qualitatively for long-run growth effects. When public capital is insufficiently productive, distorting financing can make government investment contractionary at longer horizons.
Source: IMF
Hedge Funds Saw August Inflows of $11.3B - TrimTabs/Barclays
October 14, 2010--The hedge-fund industry saw estimated inflows of $11.3 billion in August--the biggest inflow the industry has seen since February after about $3.1 billion of total redemptions in June and July--according to TrimTabs and Barclays.
"Hedge fund managers exhibited caution in August and it served them well," said Sol Waksman, founder and President of BarclayHedge. "The industry outperformed the market by a large margin. While the S&P 500 sank 4.7%, hedge funds posted a negative return of less than 1%."
Hedge-fund investors have gotten hungrier for risk, the firms said, and TrimTabs Executive Vice President Vincent Deluard said, "We suspect hedge-fund managers might invest aggressively in the current quarter" because "the fresh cash flowing into the industry needs to be put to work.
About one-third of managers are still sitting on a year-to-date return of less than 1%, and they'd need to end the year "with a bang" in order to collect performance fees, Deluard said.
Source: Wall Street Journal
Bridging the Refinancing Cliff-Volume II
Slow Signs of Progress
October 13, 2010--Executive Summary
This special report provides an update on recent loan refinancing, “amend and extend” (A&E), and bond-for-loan takeout activity over the last nine months and their collective
impact on redistributing loan and bond maturities in the 2010?2015 time frame. Fitch Ratings’ key observations and findings are as follows:
Strong refinancing activity in the leveraged loan market coupled with record levels of high yield bond issuance has diminished a portion of leveraged loan debt that matures over the next two years. However, limited progress has been made toward addressing the nearly $1.1 trillion of leveraged loans expected to mature between 2012 and 2014.
The rapid pace of A&E activity through the first nine months of 2010 has affected the shape of the refinancing “cliff” by decreasing loan maturities between 2010 and 2011. However, this has come at the expense of the steeper portion of the refinancing cliff as maturity totals have increased in 2012 through 2014. Fitch expects A&E volume to continue to increase through 2015 due to an increase in maturities during this period and increased willingness on the part of lenders. Fitch expects most extensions of 2013 and 2014 maturities will take place in 2011 and 2012. This activity should allow the market to redistribute loan maturities to a level more easily absorbed by traditional market sources.
Source: Fitch Ratings
New EDHEC Risk Institute research shows that without the use of robust estimators, minimising extreme risks may be worse than not minimising them
October 13, 2010--In recent research on advanced modelling for alternative investments*, supported by Newedge Prime Brokerage, EDHEC Risk Institute analysed whether portfolio selection techniques with a focus on extreme risks are truly superior to traditional return and risk analysis in situations when risk management matters most.
The results show that in trying to minimise extreme risk and make their risk evaluation more sophisticated, many asset managers increase the number of risk parameters to be estimated, which in turn leads to less robust and less relevant results than if they had stuck with a simple measure of portfolio volatility.
As outlined in the research, one key problem with explicitly introducing a focus on extreme risk in portfolio diversification techniques is that such techniques require estimates not only for variance-covariance parameters, but also for higher-order moments and comoments of the return distribution, the so-called coskewness and cokurtosis parameters, which describe how the portfolio constituents contribute to the overall fat-tailed and asymmetric distribution of the portfolio (skewness refers to the degree to which the distribution is skewed to the left or the right; kurtosis measures the “peakedness” of the distribution; a “fat tail” distribution is tilted towards the extremes). This is a formidable challenge that significantly exacerbates the dimensionality problem already present with mean-variance analysis.
Source: EDHEC
Environmental taxation can spur innovation, says OECD
October 13, 2010--Governments could make better use of environmental taxes to discourage polluting activities and boost innovative ‘green technologies.’
“To achieve a greener future we need new technologies that can lower the cost of saving the planet,” says OECD Secretary-General Angel Gurría.
“Shifting part of the tax burden onto pollution makes it more attractive to develop and adopt these clean technologies and promotes green growth.”
OECD and many other governments already apply a range of taxes to energy, air and water pollutants and waste. Environmental taxes, along with tradable permit systems, are the most cost-effective and efficient environmental policy tool available. Citizens and industry react to green taxes by changing their behaviour, especially if government gives a strong signal that they intend to maintain tax rates and the price of carbon at high levels in the long-term.
view Taxation, Innovation and the Environment
Source: OECD
