Institutional Asset Manager Newsletter 11.08.23

The digital pound

Data from Fineqia International reveals that its analysis of global ETPs with digital assets as underlying collateral revealed a 70 per cent growth in total AUM in the YTD period amid renewed interest by investors.
Fineqia reports that the AUM at the end of July was USD34 billion compared with USD20 billion on January 1 this year. This 70 per cent YTD increase in AUM was a 47.2 per cent premium to the 47.7 per cent rise in the underlying value of digital assets, the firm says.
However, with the Bank of England (BoE) discussing the creation of a ‘digital pound’, a new survey released by CFA Institute, the global association of investment professionals, has found limited understanding of and support for Central Bank Digital Currencies (CBDCs) within the investment industry.
The top reason cited globally in support of launching a CBDC was to accelerate payments and transfers (58 per cent), but the association found that 48 per cent of global respondents and 55 per cent of UK respondents would use a CBDC in some capacity if it was offered.
Globally, a majority (55 per cent) believe that CBDCs can coexist with private cryptocurrencies, with 61 per cent of UK respondents believing the same, but in what many readers of this newsletter might find reassuring, 58 per cent of global respondents agree that private money will always be inferior in quality and security to government money.
Other features this month have revealed what Morningstar Indexes head of ESG, Thomas Kuh, refers to as the new normal for ESG. "Major destabilising influences on the global economy that were viewed as threats a year ago – specifically the war in Ukraine and its impact on energy markets – have now become normalised in [asset owners] eyes," Kuh says.
Our In My Opinion this month comes from Cohen & Steers’ Jeffrey Palma and John Muth, who detailed their Capital Market Assumptions for the next 10 years. "We are in the early stages of a significant and far-reaching macroeconomic regime change that was set in motion over the past three years," the pair says.
The 28th of August sees the opening of the nominations for the Institutional Asset Manager Service Provider Awards. The awards are based on a nomination and then voting process with an awards event at the end of November.
Beverly Chandler, Managing Editor
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