Documents & Resources

March 26, 2015

* Global equities stumble
* Linking EM vulnerability and volatility with the IIF Heat Map
* EM portfolio flows dancing to the Fed’s tune
* Flash PMIs—optimism made in Europe

March 19, 2015

* Markets price in a slower pace of U.S. rate hikes
* Fed drops “patience” but projects less tightening
* UK budget—frontloading the pain
* IIF Spring Meeting in Doha—the quick read

March 13, 2015

This first edition of the CMM Chartbook is part of the new publication format for the IIF Capital Markets Monitor, and follows last week's Key Issues and CMM Research Note on socially responsible investing. Further CMM Research Notes will be published over the course of the month.

Looking across asset classes, this month's charts focus on the market impact of the launch of the ECB's unprecedented QE program, the surge in the dollar, and implications for emerging markets.

March 12, 2015

*Record lows for Euro Area bond yields drive the euro towards parity with USD
*Tracking ECB QE—Introducing Draghi’s Dashboard
*China—Sliding activity, more policy reaction coming
*EM Asia—In a cutting mood
*Frontier Asia—Rapid growth, diverse challenges
*Financial inclusion—Lessons from developing economies

March 12, 2015

Frontier Asia has enjoyed stronger growth than most emerging markets over the past decade. While GDP per capita is still low, the gap with mainstream emerging economies is narrowing quickly, helped by favorable demographics and competitive export sectors. As financial openness and market depth improve, Asian frontier markets will begin to offer a wider range of investment opportunities across fixed income and equity markets.

March 5, 2015

* Euro hits a 12-year low, EM currencies under pressure
* ECB saddles up
* Greece—running out of cash?
* China—the PBOC eases again
* India—a reform budget
* Consequences of the vanishing petrodollar

March 4, 2015

With sustained low rates and the ongoing shortage of high-quality assets, investors have been confronted with a fundamental asset-liability mismatch. To compensate for low rates, institutional investors have been taking on more credit risk and leverage. However, portfolio rebalancing away from heavy risk exposures and directional trades may prove challenging in an environment of lower market liquidity. The longer lower rates and net negative supply of high-quality government bonds persists, the more pressure is put on long-term investors to take on extra risk to generate income. These exposure risks could accumulate and render the financial system more fragile as long-term players become more exposed to a severe market downturn.

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