Global ETF News Older than One Year
Scrapping Libor leaves $500bn of bond contracts in limbo
October 10, 2018--The documentation for billions of bonds will need rewriting as benchmark ends
Source: FT.com
ETFs begin to reshape bond trading
October 10, 2018--Asset managers are using exchange traded funds to gain or cut exposure to corporate bonds.
In corporate debt, they do this by buying and selling bonds and creating and cancelling ETF shares to mimic indices like the Markit iBoxx Liquid High Yield Index.
Source: FT.com
BlackRock reshuffles senior fixed income team
October 4, 2018--BlackRock reshuffled the senior leadership of its fundamental fixed income team in an effort to bring its New York and London branches closer together.
As part of the changes, deputy CIO of global fundamental fixed income Scott Thiel is to move away from portfolio management to take up a new role as senior investment strategist for global fixed income.
Source: citywireusa.com
IMF Fiscal Monitor, October 2018 Managing Public Wealth
October 4, 2018--Public sector balance sheets bring together the entirety of what the state owns and owes, offering a broader fiscal picture beyond debt and deficits.
Once governments understand the size and nature of public assets, they can start managing them more effectively, raising considerable additional revenue. Also, public sector balance sheet analysis allows for better risk management and policymaking.
Source: IMF
IMF-World Economic Outlook, October 2018 Challenges to Steady Growth
October 3, 2018--The steady expansion under way since mid-2016 continues, with global growth for 2018-19 projected to remain at its 2017 level. At the same time, however, the expansion has become less balanced and may have peaked in some major economies. Downside risks to global growth have risen in the past six months and the potential for upside surprises has receded.
Global growth for 2018-19 is projected to remain steady at its 2017 level, but its pace is less vigorous than projected in April and it has become less balanced. Downside risks to global growth have risen in the past six months and the potential for upside surprises has receded. Global growth is projected at 3.7 percent for 2018-19-0.2 percentage point lower for both years than forecast in April. The downward revision reflects surprises that suppressed activity in early 2018 in some major advanced economies, the negative effects of the trade measures implemented or approved between April and mid-September, as well as a weaker outlook for some key emerging market and developing economies arising from country-specific factors, tighter financial conditions, geopolitical tensions, and higher oil import bills.
view the IMF-World Economic Outlook, October 2018 Challenges to Steady Growth
Source: IMF
IMF-Global Financial Stability Report October 2018: A Decade after the Global Financial Crisis: Are We Safer?
October 3, 2018--The October 2018 Global Financial Stability Report (GFSR) finds that global near-term risks to financial stability have increased somewhat, reflecting mounting pressures in emerging market economies and escalating trade tensions. These risks, while still moderate, could increase significantly.
An intensification of concerns about emerging markets, a broader rise in trade tensions, the realization of political and policy uncertainty, or a faster-than-expected tightening in monetary normalization could all lead to a sharp tightening in financial conditions. Medium-term financial stability risks remain elevated, driven by high non–financial sector leverage in advanced economies and rising external borrowing in emerging markets. Although the global banking system is stronger than before the crisis, it is exposed to highly indebted borrowers as well as to opaque and illiquid assets and foreign currency rollover risks.
Source: IMF
Alternatives to Libor begin to make an impact
October 1, 2018--Large institutions have already issued bonds linked to new benchmarks such as Sofr and Sonia.
Source: FT.com
Transaction fees swallow up a quarter of investment costs
September 30, 2018--Report on world's biggest asset owners sheds light on poorly understood charges
Transaction fees account for about a quarter of the total cost of investing for the world's biggest asset owners, according to research that sheds light on the size of the poorly understood charges. Basic fees paid to external fund managers, and performance fees if investments do better than expected, account for most of the total cost of investing.
Source: FT.com
IMF Working Paper-What Do Monetary Contractions Do? Evidence From An Algorithmic Identification Procedure
September 28, 2018--Summary:
As the "Volcker shock" is believed to have generated useful information on the effects of monetary policy, this paper develops a simple procedure to identify other unanticipated monetary contractions. The approach is applied to a panel data set spanning 162 countries (over the period 1970-2017), in which it identifies 147 large monetary contractions.
The procedure selects episodes where a protracted period of loose monetary policy was suddenly followed by sizeable nominal interest rate increases. Focusing on contractions of significant size increases the signal-to-noise ratio, while they are unlikely to be accompanied by confounding "information effects" (markets interpreting a rate hike as the Central Bank being optimistic about the real side of the economy). A subsequent panel VAR analysis suggests that a 100-basis point rate hike reduces real GDP by 0.5 percent. This reduction in output seems to be persistent, pointing to a certain degree of hysteresis. The price level falls by 1.5 percent, indicating that the medium-/long-run impact of contractionary monetary shocks is not characterized by a neo-Fisherian response. Advanced economies appear to display more price stickiness than emerging/developing countries, as the former combine a more muted price response with a larger effect on output.
Source: IMF
FTSE Russell includes China stocks in boon to battered market
September 27, 2018--FTSE's China inclusion expected to trigger $10 bln passive inflows
FTSE Russell points to improved access for global investors
FTSE says will review inclusion of Chinese bonds in global indexes in March
MSCI considering boosting A-share weighting in its benchmarks (Adds March review of Chinese bonds inclusion; paragraphs 20, 21)
Global index provider FTSE Russell said it will start including mainland Chinese shares in its major benchmarks from June next year, in a move that it expects will draw initial net inflows of $10 billion from passive investors.
Source: Reuters
