Global ETF News Older than One Year
The Price of War OECD Economic Outlook, June 2022
June 10, 2022--The world is paying a heavy price for Russia's war in Ukraine. It is a humanitarian disaster, killing thousands and forcing millions from their homes. The war has also triggered a cost-of-living crisis, affecting people worldwide. When coupled with China's zero-COVID policy, the war has set the global economy on a course of slower growth and rising inflation-a situation not seen since the 1970s.
Rising inflation, largely driven by steep increases in the price of energy and food, is causing hardship for low-income people and raising serious food security risks in the world's poorest economies.
Here are the three key take-aways:
The war is slowing the recovery
Inflationary pressures have intensified
The cost of living crisis will cause hardship and risks famine
Source: OECD
ETFs play leading role as investment platforms slash costs
June 10, 2022--Online brokers and apps forecast to be primary source of demand, says PwC research
Exchange traded funds, centre stage in a price war that has sharply reduced the cost of investment vehicles, appear to be playing a leading role in another revolution that is slashing the cost of investing-the proliferation of low or no-fee online platforms and apps.
A recent survey by PwC of industry participants representing around 80 per cent of global ETF assets found that online platforms were now forecast to be the primary source of future ETF demand.
Source: ft.com
Global Wealth Hit Record High of $530 Trillion in 2021
June 9, 2022--Asian wealth is growing faster than in any other region
World's wealth set to keep rising despite economic headwinds
Global wealth rose 10.6% last year to reach a record high of $530 trillion in 2021 and is set to continue rising in all regions despite inflationary pressures and Russia's invasion of Ukraine.
Strong equity markets and a surge in demand for real assets such as property, wine and art drove the increase, according to a report by Boston Consulting Group. About $80 trillion of new wealth is likely to be created over the next five years.
Source: bloomberg.com
May Bond Bounce Sees Record ETF Flows
June 9, 2022--There were record inflows to fixed-income ETFs in May across a range of segments as economic fears spurred a broad bond rally.
Exchange-traded funds tracking government debt lured $18.7 billion with muni products adding $6.1 billion.
Almost $7.2 billion poured into ultra-short duration funds and short duration ETFs scooped up $9.4 billion. All were new monthly records.
Funds that buy bank loans were among the losers, seeing almost $1 billion exit in the first net outflow for the group since 2020.
Source: bloomberg.com
How Replacing Coal With Renewable Energy Could Pay For Itself
June 8, 2022--The world may gain an estimated $78 trillion over coming decades by making this energy transition.
International negotiators can't agree on how to phase out coal, in part because of opposition to carbon taxes, and now even countries that had been able to abandon the fuel are reversing that progress as the war in Ukraine raises energy prices.
The most common concern about scrapping coal is that replacing it with renewable energy would be too expensive, but we show in new research that the economic benefits would far outweigh the costs.
We analyze this great carbon arbitrage, as we call it, in a recent working paper that calculates the cost of replacing coal with renewables, as well as the social benefits of this important transition.
Source: IMF.org
BIS-Blockchain scalability and the fragmentation of crypto
June 7, 2022--Key takeaways
Permissionless blockchains work by providing monetary incentives to decentralised validators. Yet the mechanism for maintaining these incentives necessarily entails congestion effects and high fees. These high fees encourage the use of alternative chains, leading to a fragmentation of the crypto landscape.
Newer blockchains have higher capacity, even if these come at the cost of greater centralisation and weaker security. Differences in the design also preclude blockchain interoperability.
Limited scalability and a lack of interoperability not only prevent network effects from taking root, but a system of parallel blockchains also adds to governance and safety risks.
view the BIS Bulletin No 56 Blockchain scalability and the fragmentation of crypto
Source: bis.org
IMF-Fintech Notes-Digital Currencies and Energy Consumption
June 7, 2022--Summary:
Whether in crypto assets or in CBDCs, design choices can make an important difference to the energy consumption of digital currencies. This paper establishes the main components and technological options that determine the energy profile of digital currencies. It draws on academic and industry estimates to compare digital currencies to each other and to existing payment systems and derives implications for the design of environmentally friendly CBDCs.
For distributed ledger technologies, the key factors affecting energy consumption are the ability to control participation and the consensus algorithm. While crypto assets like Bitcoin are wasteful in terms of resources, other designs could be more energy efficient than existing payment systems.
Source: IMF.org
Stagflation Risk Rises Amid Sharp Slowdown in Growth
June 7, 2022--War in Ukraine leading to higher inflation, tighter financial conditions
Compounding the damage from the COVID-19 pandemic, the Russian invasion of Ukraine has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation, according to the World Bank's latest Global Economic Prospects report.
This raises the risk of stagflation, with potentially harmful consequences for middle-and low-income economies alike.
Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022-significantly lower than 4.1 percent that was anticipated in January. It is expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade in the near term, pent-up demand fades, and fiscal and monetary policy accommodation is withdrawn.
Source: Worldbank.org
China's transition bonds and other environment stories you need to read this week
June 7, 2022--This weekly round-up brings you some of the key environment stories from the past seven days.
Top stories: China has unveiled low-carbon transition bonds; fewer than half of Americans support nuclear power; new committee to monitor business climate action.
China is rolling out so-called low-carbon transition bonds to help companies become greener, the country's interbank bond market regulator said on 6 June, as Beijing strives toward carbon neutrality.
Under the pilot scheme, companies in eight sectors including electric power, steelmaking, petrochemicals and civil aviation will issue bonds to fund decarbonization efforts, the National Association of Financial Market Institutional Investors said.
It comes after China's state planning agency unveiled a new "five-year plan" for the renewable sector on 1 June, with the aim of ensuring that its grids source about 33% of power from renewable sources by 2025, up from 28.8% in 2020.
Meanwhile, record green energy output reduced Indian dependence on coal in May, despite 23.5% growth in power demand, contributing to a rise in utilities' coal inventories, a Reuters analysis of government data showed.
Source: weforum.org
Value of US and European IPOs tumbles 90% this year
June 5, 2022--First-quarter drought extends into second quarter as Ukraine war and volatility deter companies from listing
The value of initial public offerings in the US and Europe has fallen 90 per cent this year as the Ukraine war and rising inflation and interest rates have forced businesses to shelve plans to go public.
Just 157 companies raised a total of $17.9bn in the first five months of 2022, compared with 628 that raised $192bn in the same period last year, according to data from Dealogic.
Source: ft.com
