Documents & Resources

March 3, 2015

The fast-growing area of asset management labeled “socially responsible investing” (SRI) broadly refers to incorporating environmental, social, ethical, and corporate governance (ESG) factors in investment selection and analysis. Socially responsible investing is not necessarily linked to philanthropy: rather, portfolio profitability remains the core criterion. However, SRI is a broad umbrella, encompassing a range of investment approaches which we look at in more detail below. While defining and quantifying SRI activity poses challenges, there is no question that this is an important and rapidly growing asset class, with increasing relevance across a range of geographies.

February 27, 2015
Rise in mutual fund/ETF portfolio allocations to Euro Area equities, Emerging Asia: Following the announcement of the ECB’s QE program, global fund investors have increased exposure to Euro Area equities. The rise in allocations has been more pronounced for core Euro Area countries than for the periphery, reflecting in part the heightened uncertainty about the Greek financial support negotiations during this period. Another notable trend in recent weeks has been greater differentiation in allocations to emerging market assets. India, China, Indonesia, Nigeria and Chile have seen the largest rise in allocations since the start of the year while portfolio weightings for Brazil, Russia, Mexico and Hungary have declined sharply.
February 26, 2015

* Global equities at record highs as Fed stays patient
* Flash PMIs—stabilizing confidence
* Euro Area banks stopped deleveraging
* EM portfolio flows moderate despite dovish Fed
* Greece—one step back from the abyss
* Malaysia—adjusting to the oil price drop

February 19, 2015

*Markets read the minutes
*Global economy—year of divergence
*Greece—close to crunch time
*Indonesia—lower inflation and revised budget allow rate cut

February 12, 2015

* Better sentiment on risk assets, some decline in volatility
* Markets start to reconsider Fed’s likely path
* Brazil—pay-up time
* Greece talks
* Ukraine—questions for private sector bondholders
* Highlights from the IIF G20 Conference in Istanbul

February 12, 2015

The first Eurogroup meeting with Greece's FM Varoufakis, on February 11, ended in the early morning—as usual—but without a joint statement as "...ministers couldn't agree on a common approach...on how to take the next steps." The main sticking point is how to frame the negotiation: extension of the current program scheduled to end by February 28, or bridge financing to buy time to negotiate a "new deal". The Eurogroup will meet again on February 16—with technical talks being held between now and Monday.

February 5, 2015

* Markets gain some ground
* Business sentiment—convergence in the G3, divergence in EMs
* Oil prices rebound somewhat-but fundamentals still weak
* China: the PBOC takes the plunge
* Greece—dangerous prospects

February 3, 2015
The ECB announcement of a comprehensive QE program has brought to the fore the challenges posed by the ECB and BoJ easing moves. Other countries will either need to match these easing measures, or see their currencies strengthen against the euro and yen. On the heels of QE (v. 1.0) driven by the Fed and BoE, this fresh wave of QE (v. 2.0) will prolong a world of plentiful liquidity and zero/negative interest rates—more than six years after the financial crisis.
January 29, 2015

Dollar strength weighs on U.S. equities; Euro Area stocks approach 7-year highs
Fed—balancing stronger growth and lower inflation
Greek turmoil—what lies ahead?
Russian banks on the brink
China— renminbi under pressure
Ecuador—under the oil curse

January 23, 2015

In the months prior to the announcement of the ECB’s sovereign debt-based QE program, global fund investors took on significantly more exposure to peripheral Euro Area debt. Data on global investors’ mutual fund and ETF portfolios suggest that the allocations of both institutional and retail investors to emerging market assets are low relative to the average of the past several years. Institutional investors continue to be the primary source of investment fund portfolio capital for emerging markets, but there has been a marked shift in their allocations towards mature markets in recent weeks—particularly to U.S. assets. Cash holdings of bond funds remain at very low levels by the standards of recent years.