Global ETF News Older than One Year
IOSCO Publishes Recommendations Regarding the Protection of Client Assets
January 29, 2014--The International Organization of Securities Commissions (IOSCO) today published the final report on Recommendations Regarding the Protection of Client Assets, which seeks to help regulators improve the supervision of intermediaries holding client assets.
Events such as the Lehman Brothers and MF Global insolvencies have placed client asset protection regimes in the spotlight. This is the result of investors trying to better understand the potential implications of placing their assets with particular intermediaries and in certain jurisdictions. Regulators also have been seeking to address risks to client assets and how to transfer or return client assets in default, resolution or insolvency scenarios.
Source: IOSCO
BMO Financial Group to Acquire F&C Asset Management plc
Excellent strategic, financial and cultural fit
January 28, 2014--F&C is a diversified U.K.-based investment manager with a strong brand and almost 150-year history
Consistent with BMO's stated intention of growing its wealth management business and demonstrates BMO's commitment to the asset management business
BMO Global Asset Management's scale, product set and distribution capabilities will be enhanced; pro forma combined AUM of F&C and BMO Global Asset Management is approximately US$2691 billion (£162 billion)
Complementary distribution and limited product overlap expected to drive future revenue growth
The acquisition, valued at C$1.3 billion (£708 million), is modestly accretive2 to earnings per share in the first year, and has an internal rate of return of approximately 15%
Source: BMO Financial Group
Deep Capacity Can Be a Benefit to Index-Based Investing: The Case of European Small Caps
January 28, 2014--Until fairly recently, investors relied principally on actively managed mutual funds to gain exposure to the markets-especially for small-cap options around the world, where many believe that opportunities are ripe for active managers to add value.
Small-cap stocks, generally speaking, do not garner the same level of analyst coverage, and many believe informational inefficiencies provide richer opportunity sets for stock pickers to potentially outperform index benchmarks. After a strong performance during 2013, many have set their sights on European small caps1 in particular, and significant levels of assets have flowed into Europe (as Zach discussed in this prior blog post). Index-Based Strategies Offer a New Option Although Europe is an important focus for developed international investors, there are limited choices available to those interested in targeting exposure to European small-cap companies. Looking at the U.S.-listed mutual funds and exchange-traded funds (ETFs) in Morningstar’s Europe Stock category, as of December 31, 2013, there was only one ETF and three mutual funds specifically focused on small caps.2
See more at: http://www.wisdomtree.com/blog/index.php/deep-capacity-can-be-a-benefit-to-index-based-investing-the-case-of-european-small-caps/#sthash.uVak8WgV.dpuf
Source: WisdomTree
ETFS Precious Metals Weekly-Gold Price Rallies as Investors Flee Emerging Markets
January 27, 2014--The gold price rallied for the fifth straight week as investors search for hedges against further emerging market volatility. Gold was the best performing precious metal last week as markets shifted to risk-off mode, sparked by a weaker-than-expected January China PMI, concerns about a potential default in China on a private wealth investment
product and Argentina's currency devaluation.
The gold price rose 1.4% last week for a year-to-date gain of 5.3%, surpassed only by the 6.3% increase in the platinum price. Platinum miners in South Africa go on strike, driving price higher. Platinum miners belonging to the South African Association of Mineworkers and Construction Union (AMCU) went on strike on Thursday, seeking a doubling of entry-level wages. Both platinum and palladium prices have performed well early in 2014 on concerns about the potential for further supply disruptions in South Africa – the source of over 70% of the worlds' platinum mine output. The continuous threat of strike action in South Africa highlights the uncertainty over consistent supply. Accordingly, we remain bullish on platinum and palladium prices in 2014, given their gearing into the global industrial recovery and large and growing supply/demand deficits
Source: ETF Securities
FTSE aims to continue its evolution with environmental sector
January 27, 2014--The FTSE Group is looking at ways to recognise new environmental industries in its system of classifying sectors.
Typically, it takes 10 or more companies in a new area of activity for the FTSE to begin the gradual process of changing a sectoral classification, and there have not been significant changes for a couple of years.
Source: FT.com
Global ETF AUM to surpass hedge fund industry in 18 months
While growth rates will be highest in Asia and lowest in the more mature US market, the growth drivers will be the same across all markets- foreign currency share classes, fund of fund ETFs, new emerging market funds and commodity ETFs.
ETF industry forecast to grow at 15-30% annually over the next five years
Most respondents see US$50m or US$100m as minimum fund size for success
Top three to maintain or grow their market share
view the Global ETF Survey-A new era of growth
and innovation
Source: Ernst & Young
CME and ICE warn on plan to force open European clearing houses
Phupinder Gill, chief executive of CME Group, and Jeff Sprecher, his counterpart at IntercontinentalExchange, hit out at European plans to require all derivatives platforms to connect to their rivals venues' and process investors' trades.
Source: FT.com
IMF Working Paper-Financial Soundness Indicators and the Characteristics of Financial Cycles
Consistent with this notion, the paper found that better initial scores in certain financial soundness indicators (FSIs) are associated with milder and shorter downturns; and improving FSIs during a downturn worsens the shrinkage of credit and amplifies the cycle. In this contex, our results suggest that policy makers should be mindful about the timing of regulating changes in banks' FSIs. view IMF Working Paper-Financial Soundness Indicators and the Characteristics of Financial Cycles
Source: IMF
Jack Lew and Jamie Dimon warn of Bitcoin dangers
Jack Lew, US Treasury secretary, said: "From the government's point of view, we have to make sure it does not become an avenue to funding illegal activities or to funding activities that have malign purposes like terrorist activities."
Source: FT.com
IMF Working paper-Global Liquidity through the Lens of Monetary Aggregates
Periods of capital inflows are also those when the domestic currency is appreciating, and such periods of rapid exchange rate appreciation coincide with increases in the central bank’s foreign exchange reserves, increasing the stock of narrow money. The paper examines economic significance of cross-country panel data on monetary aggregates and other measures of non-core bank liabilities. Non-core liabilities that reflect the activities of NFCs reflect broad credit conditions and predict global trade and growth.
view the IMF Working paper-Global Liquidity through the Lens of Monetary Aggregates
Source: IMF
January 27, 2014--The exchange traded funds (ETF) industry could surpass the hedge fund industry in assets under management (AUM) in the next 12-18 months according to EY's Global ETF Survey.
January 27, 2014--The heads of the world's two largest exchange operators by market value have warned against proposals to force open Europe's clearing houses,arguing policy makers could undermine the stability of global markets.
January 27, 2014--Summary: Better "financial soundness" of banks could help mitigate the volatility of financial cycles by reducing banks' risk exposure. But trying to improve financial soundness in the midst of a downturn can do the opposite-further aggravating the contraction of credit.
January 24, 2014--Bitcoin has been tossed into the virtual gutter at the World Economic Forum in Davos this week, as top US financial leaders warned the vitrual currency could be used to fund terrorism and predicted that regulation would put it out of business.
January 24, 2014-- Summary: This paper examines how the financial activities of non-financial corporates (NFCs) in international markets potentially affects domestic monetary aggregates and financial conditions. Monetary aggregates reflect, in part, the activities of NFCs, who channel capital market financing into the domestic banking system, thereby influencing funding conditions and credit availability.
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