Global ETF News Older than One Year
Infrastructure, a sector ripe for government efficiencies
January 27, 2023--STORY HIGHLIGHTS
The relative strength or weakness of the governance environment can determine how developed a country's infrastructure is.
Infrastructure is an area where the government of the future can potentially demonstrate its efficacy, in terms of the ideal role of government, how it should deliver, and gain citizen's trust simultaneously.
To make progress governments need to understand the governance constraints to infrastructure management and delivery they face.
Different levels of infrastructure in countries can be explained by unique pre-conditions that every country faces, including geographic traits and financial resources. As the figures below illustrates, huge infrastructure quality and spending gaps remain between countries. Crucially, pre-conditions also include different politicians' and constituencies' perceptions of the ideal policy combination on the one hand, and the right incentives for infrastructure development on the other. In other words, the relative strength or weakness of the governance environment can determine how developed a country's infrastructure is. These governance differences across countries are especially visible in regulated industries where services are essential and the risk of market failure is high, such as in water and electricity utilities, ports, toll roads, and airports.
Source: worldbank.org
Global Economic Uncertainty Remains Elevated, Weighing on Growth
January 26, 2023--January 26, 2023--From Brexit and US-China trade tensions to the pandemic and war, successive shocks have combined to keep uncertainty elevated
The shocks that have shaken the global economy in recent years have introduced a new normal for turbulence, driven in some cases by political fragmentation between countries. These episodes have also lifted uncertainty to exceptionally high levels, which in turn hurts economic growth as our research shows.
To better track the evolution of these conditions, we updated our World Uncertainty Index to show more frequent readings that are monthly, instead of quarterly, and incorporate data for 71 economies dating back to 2008.
As the Chart of the Week shows, the index fell in December, the most recent reading, but has continued to hit elevated levels in recent times on the back of successive shocks, including most recently Russia's invasion of Ukraine and the associated cost-of-living crisis.
Source: imf.org
UN World Economic Situation and Prospects 2023
January 25, 2023--Multiple shocks to the world economy
The world continues to confront multiple, inter-connected crises. Amid a slow recovery from the impact of the COVID-19 pandemic, the world is facing a food and energy crisis exacerbated by the war in Ukraine, with record high inflation unleashing a cost-of-living crisis.
Developing countries are struggling over the costs of imports and debt servicing, and a climate crisis continues to wreak havoc on the most vulnerable countries and populations.
Amid monetary tightening, subdued consumption and private investments, judicious government spending will remain critical for steering economic recovery worldwide. The UN World Economic Situation and Prospects 2023 will underscore the imperative of supportive and accommodative fiscal measures to lift growth and accelerate progress towards the Sustainable Development Goals.
Source: un.org
IMF-The Costs of Misreading Inflation
January 24, 2023--The 2021 surge in global shipping costs was a canary in the coal mine for the persistent rise in inflation
It bears remembering that, as recently as the second half of 2021, the Federal Reserve considered that the surge in consumer price inflation would dissipate, with price increases returning to the Fed’s 2 percent target in 2022.
In testimony before Congress, Fed Chair Jerome Powell affixed the now infamous "transitory" moniker to the ongoing price increases, which he ascribed to temporary supply bottlenecks and price declines in the early stages of the pandemic.
Source: imf.org
BlackRock's iShares regains pole position from rival Vanguard
January 24, 2023--Last year's net ETF flows at $221bn were lower than in 2021, but Vanguard's $214bn marked a far steeper decline.
BlackRock's iShares exchange traded fund arm dethroned arch-rival Vanguard at the top of the global ETF net flows leaderboard last year, returning to pole position after two years in second place.
But the big two also entrenched their duopoly in the ETF industry, with nearest rivals State Street Global Advisors and Invesco suffering deeper wounds from souring market sentiment.
Source: ft.com
Smart beta rewards discerning devotees in 2022
January 20, 2023-Momentum, value and 'low investment' rack up returns of 11-15% while broad markets lost a fifth of their value
Smart beta strategies, which aim to outperform traditional broad market capitalisation-weighted indices by filtering them according to certain factors, delivered returns as high as 15 per cent last year even as major markets fell by a fifth.
Research by Scientific Beta, a factor-based data provider and consultancy, has found that value strategies- investing in global stocks deemed to be inexpensive- delivered returns of 11 per cent compared to losses of between 17 and 18 per cent for global cap-weighted indices such as the Scientific Beta Global Cap-Weighted index, FTSE All-World index and MSCI ACWI index.
Source: ft.com
Sustainable central banking: clear green water between the Fed and the ECB?
January 18, 2023--All major central banks recognise that the climate crisis and nature loss pose material threats for the financial system. But central bank mandates and political environments vary. Action on sustainability is a bipartisan issue in Europe, while in the US parts of the Republican Party are leading an ant-ESG campaign that is out of line with science and at odds with a prudent view on financial management.
Nick Robins writes that a second phase of sustainable central banking is needed to minimise the environmental threats to banks' core mandates, as well as the other goals they are set.
One of the big sustainable finance priorities for 2023 is how central banks will grapple with deepening climate and nature risks alongside high inflation and rising interest rates. One thing is clear: all major central banks recognise that the climate crisis and nature loss pose material threats for the financial system, requiring them to act to understand and address these challenges. Where they diverge depends very much on the mandates they are given by legislators, the interpretations they make and the political environment in which they operate. These differences were clearly on display in January in interventions from US and European central bankers.
Source: blogs.lse.ac.uk
Crypto Contagion Underscores Why Global Regulators Must Act Fast to Stem Risk
January 18, 2023--Stronger financial regulation and supervision, and developing global standards, can help address many concerns about crypto assets
The already volatile world of crypto has been upended anew by the collapse of one its largest platforms, which highlighted risks from crypto assets that lack basic protections.
The losses punctuated an already perilous period for crypto, which has lost trillions of dollars in market value.
Bitcoin, the largest, is down by almost two-thirds from its peak in late 2021, and about three-quarters of investors have lost money on it, a new analysis by the Bank for International Settlements showed in November.
Source: imf.org
WEF-Unchecked Cyberattacks 'Are Growing Threat to Fragile Global Economy'
January 17, 2023--Adoption of connected devices during the pandemic led to a dramatic increase in cyberattacks. According to a new report launched today at the World Economic Forum Annual Meeting 2023, if left unchecked, the cost of cyberattacks will continue to rise, threatening a fragile global economy.
The report, The State of the Connected World 2023 edition, a collaboration of the World Economic Forum with the Council on the Connected World, says the immediate threats can be mitigated through robust security protocols and governance through public-private cooperation.
view the WEF State of the Connected World 2023 Edition
Source: weforum.org
WEF-Chief Economists Outlook: January 2023
January 16, 2023--The January 2023 Chief Economists Outlook is published amid continuing economic uncertainty and challenges of historic proportions. As the world puts another tumultuous year behind it, governments, businesses and households will all have to grapple with persistent headwinds throughout 2023.
Financial conditions remain tight, with little scope for significant loosening, despite much of the world economy being at risk of recession. However, according to the latest survey of the World Economic Forum's Community of Chief Economists, there are tentative grounds for optimism, including the prospect of an easing of the cost-of-living and energy crises by the end of this year.
view the WEF
Source: WEF (world Economic Forum)
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