ETFs in reserve management focus report 2022
Exchange traded funds (ETFs) have risen in popularity among investors and may be of interest to central bank reserve managers in pursuit of safety, liquidity and returns. Central bank mandates vary, but all reserve managers must navigate a new, complex economic environment.
In the wake of the Covid-19 pandemic, providing self-insurance against external shocks remained the most important investment objective for reserve managers. Conducting foreign exchange policy and servicing external debt came second and third. Now, as the climate crisis deepens, more central banks are adding sustainability as one of their key objectives. ETFs may be a way of gaining exposure to assets in pursuit of this aim.
Ultimately, ETFs, in terms of their thematic design and the arbitrage mechanisms that rule their behaviour, also reflect the principles of their issuers. This report is a valuable source of information for central bank reserve managers when considering whether using ETFs can help them meet their mandates.
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Navigating a new, complex economic environment
In 2021, net assets in exchange-traded funds (ETFs) stood at almost $10 trillion, after inflows of more than $1 trillion
Managing risk with ETFs
Central Banking speaks to eight reserve managers about their thoughts on the use of ETFs, faced with market volatility, uncertainty and escalating inflation
More reserve managers use ETFs
Debate around how investor and ETF behaviour interact during times of market stress continues
Opportunities to diversify with ETFs now and looking forward
Matthew Tagliani, exchange-traded fund (ETF) head of product and sales strategy, Emea at Invesco, explores the diversification impacts ETFs can have on central banks’ portfolios
ETFs: a gateway to sustainability?
Central banks that prioritise sustainability face a complex investment landscape
Tactical and strategic ETF use in reserves
Panellists discuss liquidity, oversight and risk management frameworks around using ETFs to diversify portfolios at a Central Banking roundtable discussion, in collaboration with Invesco