Global ETF News Older than One Year
Fast-Growing $2 Trillion Private Credit Market Warrants Closer Watch
April 8, 2024--Rapid growth of this opaque and highly interconnected segment of the financial system could heighten financial vulnerabilities given its limited oversight
The private credit market, in which specialized non-bank financial institutions such as investment funds lend to corporate borrowers, topped $2.1 trillion globally last year in assets and committed capital.
About three-quarters of this was in the United States, where its market share is nearing that of syndicated loans and high-yield bonds.
This market emerged about three decades ago as a financing source for companies too large or risky for commercial banks and too small to raise debt in public markets. In the past few years, it has grown rapidly as features such as, speed, flexibility, and attentiveness have proved valuable to borrowers. Institutional investors such as pension funds and insurance companies have eagerly invested in funds that, though illiquid, offered higher returns and less volatility.
Source: imf.org
Housing is One Reason Not All Countries Feel Same Pinch of Higher Interest Rates
April 8, 2024--Effects may be delayed in some countries: if interest rates remain higher for longer, homeowners will likely feel their effects as mortgage rates adjust
Central banks have raised interest rates significantly over the past two years to combat post-pandemic inflation. Many thought this would lead to a slowdown in economic activity. Yet, global growth has held broadly steady, with deceleration only materializing in some countries.
Why are some feeling the pinch from higher rates and not others? The answer partly lies in differences in mortgage and housing market characteristics. The effects of rising monetary policy rates on activity partly depend on housing and mortgage market characteristics, which vary significantly across countries, as we show in a chapter of our latest World Economic Outlook.
Source: imf.org
Fast-Growing $2 Trillion Private Credit Market Warrants Closer Watch
April 8, 2024--Rapid growth of this opaque and highly interconnected segment of the financial system could heighten financial vulnerabilities given its limited oversight
The private credit market, in which specialized non-bank financial institutions such as investment funds lend to corporate borrowers, topped $2.1 trillion globally last year in assets and committed capital.
About three-quarters of this was in the United States, where its market share is nearing that of syndicated loans and high-yield bonds.
This market emerged about three decades ago as a financing source for companies too large or risky for commercial banks and too small to raise debt in public markets. In the past few years, it has grown rapidly as features such as, speed, flexibility, and attentiveness have proved valuable to borrowers. Institutional investors such as pension funds and insurance companies have eagerly invested in funds that, though illiquid, offered higher returns and less volatility.
Source: imf.org
IMF Working Paper-Changing Global Linkages: A New Cold War?
April 5, 2024--Summary:
Global linkages are changing amidst elevated geopolitical tensions and a surge in policies directed at increasing supply chain resilience and national security. Using granular bilateral data, this paper provides new evidence of trade and investment fragmentation along geopolitical lines since Russia's invasion of Ukraine, and compares it to the historical experience of the early years of the Cold War.
Gravity model estimates point to significant declines in trade and FDI flows between countries in geopolitically distant blocs since the onset of the war in Ukraine, relative to flows between countries in the same bloc (roughly 12% and 20%, respectively). While the extent of fragmentation is still relatively small and we do not know how longlasting it will be, the decoupling between the rival geopolitical blocs during the Cold War suggests it could worsen considerably should geopolitical tensions persist and trade restrictive policies intensify. Different from the early years of the Cold War, a set of nonaligned ‘connector’ countries are rapidly gaining importance and serving as a bridge between blocs. The emergence of connectors has likely brought resilience to global trade and activity, but does not necessarily increase diversification, strengthen supply chains, or lessen strategic dependence.
Source: imf.org
IMF-Gender and Business Cycles
April 4, 2024-This note reviews the literature on the complex relationship between gender and business cycles. It focuses on nuanced patterns that challenge the notion of gender neutrality in economic fluctuations.
The note also analyzes dimensions, such as unemployment, income risk, hours worked, and responses to monetary and fiscal policy shocks, and documents distinctive disparities.
For a long time, debt dynamics remained very benign. That’s because real interest rates were significantly below growth rates. This reduced the pressure for fiscal consolidation and allowed public deficits and public debt to drift upwards. Then, during the pandemic, debt increased even more as governments rolled out large emergency support packages.
Source: imf.org
Cboe Global Listings Reaches New Milestone Surpassing 1,000 ETFs Listed Across its Global Network
April 2, 2024--Latest milestone marks continued progress in Cboe's mission to build a global listings network and expand the investable universe for investors
Cboe welcomed 106 new ETF securities across its global network of listings exchanges in the first quarter of 2024
More than 120 issuer partners currently list ETF products on Cboe's global network of stock exchanges in the U.S., Canada, UK, European Union, and Australia
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading securities and derivatives exchange network, today announced that it has achieved a new milestone, surpassing more than 1,000 exchange traded funds (ETFs) listed across its global network of listings exchanges.
Source: Cboe Global Markets, Inc.
The Fiscal and Financial Risks of a High-Debt, Slow-Growth World
March 28, 2024-Higher long-term real interest rates, lower growth, and higher debt will put pressure on medium-term fiscal trends and financial stability
Inflation-adjusted interest rates are well above post global financial crisis lows, while medium-term growth remains weak. Persistently higher interest rates raise the cost of servicing debt, adding to fiscal pressures and posing risks to financial stability.
Decisive and credible fiscal action that gradually brings global debt levels to more sustainable levels can help mitigate these dynamics.
Public debt sustainability
Debt sustainability depends upon four key ingredients: primary balances, real growth, real interest rates, and debt levels. Higher primary balances—the excess of government revenues over expenditures excluding interest payments-and growth help to achieve debt sustainability, whereas higher interest rates and debt levels make it more challenging.
For a long time, debt dynamics remained very benign. That’s because real interest rates were significantly below growth rates. This reduced the pressure for fiscal consolidation and allowed public deficits and public debt to drift upwards. Then, during the pandemic, debt increased even more as governments rolled out large emergency support packages.
Source: imf.org
IMF Working paper-Global Value Chain and Inflation Dynamics
March 22, 2024-Summary:
We study the inflationary impacts of pandemic lockdown shocks and fiscal and monetary stimulus during 2020-2022 using a novel harmonized dataset of sectoral producer price inflation and input-output linkages for more than 1000 sectors in 53 countries. The inflationary impact of shocks is identified via a Bartik shift-share design, where shares reflect the heterogeneous sectoral exposure to shocks and are derived from a macroeconomic model of international production network.
First, using a simple three-period model, we show how policy delay worsens inflation outcomes, but can mitigate or even reverse the output decline that occurs when policy responds without delay. Then, using a calibrated new Keynesian framework and two measures of loss that incorporate a "balanced approach" to weigh inflation and the output gap, we find that loss is monotonically increasing in the length of the delay. Loss is reduced if policy, when it does react, is more aggressive. We find that pandemic lockdowns, and subsequent reopening policies, were the most dominant driver of global inflation in this period, especially through their impact on aggregate demand. We provide a decomposition of lockdown shock by sources, and find that between 20-30 percent of the demand effect of lockdown/reopening is due to spillover from abroad. Finally, while fiscal and monetary policies played an important role in preventing deflation in 2020, their effects diminished in the recovery years.
Source: imf.org
World Happiness Report 2024: Most comprehensive picture yet of happiness across generations
March 20, 2024-Fresh insights from the World Happiness Report 2024, released today (March 20), paint the richest picture yet of happiness trends across different ages and generations.
The findings, announced today to mark the UN's International Day of Happiness, are powered by data from the Gallup World Poll and analysed by some of the world's leading wellbeing scientists.
Experts use responses from people in more than 140 nations to rank the world's 'happiest' countries. Finland tops the overall list for the seventh successive year, though there is considerable movement elsewhere:
Serbia (37th) and Bulgaria (81st) have had the biggest increases in average life evaluation scores since they were first measured by the Gallup World Poll in 2013, and this is reflected in climbs up the rankings between World Happiness Report 2013 and this 2024 edition of 69 places for Serbia and 63 places for Bulgaria.
The next two countries showing the largest increases in life evaluations are Latvia (46th) and Congo (Brazzaville) (89th), with rank increases of 44 and 40 places, respectively, between 2013 and 2024.
Source: worldhappiness.report
World Happiness Report 2024: Most comprehensive picture yet of happiness across generations
March 20, 2024--Fresh insights from the World Happiness Report 2024, released today (March 20), paint the richest picture yet of happiness trends across different ages and generations.
The findings, announced today to mark the UN's International Day of Happiness, are powered by data from the Gallup World Poll and analysed by some of the world's leading wellbeing scientists.
Experts use responses from people in more than 140 nations to rank the world's 'happiest' countries. Finland tops the overall list for the seventh successive year, though there is considerable movement elsewhere:
Serbia (37th) and Bulgaria (81st) have had the biggest increases in average life evaluation scores since they were first measured by the Gallup World Poll in 2013, and this is reflected in climbs up the rankings between World Happiness Report 2013 and this 2024 edition of 69 places for Serbia and 63 places for Bulgaria.
Source: worldhappiness.report
