Global ETF News Older than One Year
Leverage ratio squeeze hits options trades
May 7, 2020--Derivatives clearing, bank leverage, and options trades make a potent concoction. Add in the volatility caused by the coronavirus pandemic, shake well, and the result is a cocktail that would give most market-makers a nasty headache.
Proprietary traders are complaining that the leverage ratio is forcing clearing banks to turn down options business, crimping trade volumes and threatening the orderly functioning of markets.
Source: risk.net
BetaShares-Market Trends: May 2020
May 6, 2020--Key global trends-equities rebound
Following heavy losses in March, global equities rebounded in April on hopes that coronavirus-driven economic shutdowns would quickly "flatten the curve" of new infections and allow economies to re-open.
Extreme monetary and fiscal policy responses also supported investor optimism. The MSCI All-Country World Equity Return Index rose by 10.4% in local currency terms, after a decline of 12.8% in March. After some credit market disruptions in March, the yield on the Bloomberg Global Aggregate Bond Index edged back down in April, from 1.17% to 1.0% p.a., allowing global bonds to post a modest gain in the month. The $US stabilised after recent solid gains while gold prices pushed higher.
Source: BetaShares
New Report Sheds Light on Financing Options for Off-Grid Solar Electricity to Accelerate Progress Toward Universal Access
May 4, 2020--The World Bank Group and the Cambridge Centre for Alternative Finance (CCAF), based at the University of Cambridge Judge Business School, have published a joint report that examines a wide range of financing solutions for delivering Off Grid Solar (OGS) electricity to more than 840 million people still living without access to reliable power.
The report, Funding the Sun-New Paradigms for Financing Off-Grid Solar Companies, explores an array of innovative as well as traditional financing solutions for providing electricity access to hundreds of millions of people, predominantly in sub-Saharan Africa. It also offers guidance for companies seeking to deploy their OGS solutions by outlining which financing option best suits their specific approach, the preconditions for each financing option, and the associated opportunities and challenges.
view the World Bank The 2020 Global Off-Grid Solar Market Trends Report
Source: World Bank
Sustainable Funds Fell Less During the Selloff
May 3, 2020--It is only a short period, but ESG funds held up a bit better than the overall market during the coronavirus-fueled stock drop
Most stock funds saw declines due to coronavirus-and energy-related selling during the first quarter, but "do good" funds saw smaller declines than most other types.
Funds that practice sustainable, also referred to as ESG, strategies typically base investments on environmental, social and governance criteria. Some exclude specific products or sectors—such as tobacco, arms, fossil fuels or gambling-while others invest in companies that take actions to protect the environment or their workers.
Source: wsj.com
Mifid II influence spreads beyond EU borders
May 3, 2020--Mifid II, European market rules introduced two years ago, are having a significant impact on fund managers' use of investment research around the world.
More than two-thirds of investment groups have rolled out changes to their approach to paying for research globally, despite the rules covering just the EU, according to estimates.
But commentators have warned of large disparities in research budgets between those fund managers paying for it themselves and those passing on the costs to their clients-with the differences exacerbated by the coronavirus crisis.
Source: technocodex.com
"It's a dress rehearsal for the climate transition": What does the oil slump mean for green investment?
May 1, 2020--What's the impact of the fall on investment themes, carbon prices and stewardship?
When the United States Oil Fund began offloading its short-term contracts earlier this week, it sent another shock to an already devastated market.
Having just recovered from a tumble into negative prices the week before, US oil benchmark the West Texas Intermediate plunged 27.7% to $12.25 on Monday.
Brent Crude fell below $20 a barrel. Records were broken, share prices nosedived and yet more oil companies filed for bankruptcy.
Things have rebounded slightly in recent days, but-in a sign of just how profound the damage is-Shell yesterday stunned the stock markets by slashing its dividend payments for the first time since the Second World War.
Source: responsible-investor.com
ETFs have proved critics wrong during the crisis
April 30, 2020--Popular funds have survived a period of intense market stress
In the decade since a 2008 crisis exacerbated by newfangled credit derivatives, exchange traded funds have often been flagged as the next area that would demonstrate the destructive power of financial innovation gone wrong.
Many pointed to the potential for a liquidity mismatch in funds that offer equity-like ease of price discovery but may contain bundles of illiquid assets such as junk bonds. However, when placed under enormous strain over the past few months, ETFs have mostly managed to prove their critics wrong.
Source: FT.com
Basel Committee publishes stocktake report on climate-related financial risk initiatives
April 30, 2020--First report by high-level Task Force on Climate-related Financial Risks.
Most BCBS members are undertaking regulatory and supervisory initiatives on climate-related financial risks.
Future work includes analytical reports and developing effective supervisory practices.
The Basel Committee on Banking Supervision is today publishing a stocktake report on its members' existing regulatory and supervisory initiatives on climate-related financial risks. The report was prepared by the Committee's high-level Task Force on Climate-related Financial Risks (TFCR). The TFCR is co-chaired by Frank Elderson (Executive Director of Supervision at the Netherlands Bank) and Kevin Stiroh (Executive Vice President of the Federal Reserve Bank of New York and head of the Supervision Group).
SOurce: BIS
World Gold Council-Gold Demand Trends Q1 2020 report-Q1 gold demand marginally firmer at 1,083.8t
April 30, 2020--The global COVID-19 pandemic fuelled safe-haven investment demand for gold, offsetting marked weakness in consumer-focused sectors of the market.
Key highlights
Gold ETFs saw the highest quarterly inflows for four years amid global uncertainty and financial market volatility.
Holdings of these products reached a record high of 3,185t by the end of Q1.
The pandemic slashed jewellery demand as governments across the globe imposed lockdown measures.
Demand fell to its lowest on record, led by a 65% decline in China-the largest jewellery consumer and the first market to succumb to the outbreak.
Source: World Gold Council
Bassanese Bites: Oil slick
April 27, 2020--Global Markets
Not much has been able to roil the US stockmarket of late, but last week's negative print on the front month WTI oil futures contract finally did the trick. The S&P 500 dropped almost 5% over two days but then staged a feisty comeback to end the week down only 1.3% - helped by an equally admirable fight back in oil prices.
US bonds and gold benefited from the risk-off shift.
Why did oil prices go negative? Because the U.S., in particular, is awash in oil, and those left holding the nearest-term futures contract at expiration-and therefore required to take delivery of physical oil-would face very expensive US storage costs. Until the supply glut is removed, that means there's a risk the current nearest-term June contract price could also go negative as it approaches expiry. [By the way, to reduce this risk, the BetaShares OOO ETF-which ordinarily would have exposure to the nearest-term WTI futures contract, has shifted its exposure to the longer-dated September contract for the time being.]
Source: Betashares
