International Business Consulting Group State Street Releases 2012 ETF & Investment Outlook

Exchange Traded Funds (ETFs) are predicted to continue to expand in 2012 as international business consulting group State Street releases their 2012 ETF & Investment Outlook. The global report points out key factors that might influence investors’ decisions in 2012 like the low federal reserve rates. For those who are unfamiliar with the implications, if the federal reserve rate is low that means they are effectively increasing the government spending. Banks and financial institutions will borrow more money thus injecting more money into the economy. This makes sense to attempt to stimulate the economy in attempts to cap unemployment rates and lack of trust in ETF markets. Market Watch reports State Street’s investment analysis. Despite low hopes in 2011 the ETF market still experienced substantial growth. This, in turn, is still expected to carry over to 2012.

International business consulting group State Street expects dividend markets and fixed income markets to grow in 2012.

“BOSTON, Jan 24, 2012 (BUSINESS WIRE) — State Street Global Advisors (SSgA)*, the asset management business of State Street Corporation /quotes/zigman/179646/quotes/nls/stt STT +0.19% , today announced the availability of 2012 ETF & Investment Outlook: Sink or Swim. Developed by the SPDR(R) ETF Strategy & Consulting Group, the new report features insights on macroeconomic trends impacting the financial markets and examines key developments expected to shape the exchange traded funds (ETF) industry and asset flows in 2012.

According to the report, the US ETF industry grew to over $1.04 trillion in assets under management in 2011 — a 5.5 percent increase from the previous year with investor inflows offsetting declining equity prices. During the year, US ETFs attracted $119 billion of new assets, as investors increased their exposure to fixed income, dividend/fundamental strategies, and developed markets outside the US.

“Despite significant headwinds facing the financial markets in 2011, investors continued to increase their appetite for ETFs, which was evidenced by industry assets crossing the trillion dollar tipping point,” said Kevin Quigg, global head of ETF Strategy & Consulting at State Street Global Advisors. “Our 2012 investment outlook is cautious due to the European debt crisis, however, the ETF industry is well positioned to build on its success in recent years, as awareness of the benefits of ETFs continues to grow.”

We have outlined 3 potential market scenarios for 2012 in the report.

The report also highlights two investment themes expected to prevail regardless of what direction the markets may take. With the Federal Reserve intending to maintain a low rate environment until 2013 or longer, generating income via higher-yielding fixed income, dividend producing equities, and hybrid securities is one theme likely to continue to shape investment decisions in 2012. In an environment where the growth potential of developed nations seems relatively muted, another theme projected to garner investor attention is the opportunity for growth in emerging markets.

In addition to shaping ETF product development in 2012, these investment themes are also poised to drive asset flows, as an increasing number of investors use ETFs to implement their investment strategies.”

International business consulting firms and investment firms should continue to identify key factors that will cause expectations to rise in the future. International development consulting firms have high hopes for growth of American business in emerging countries. As international business consulting firm state street outlines, the federal reserve rate will continue to remain low in 2012 so international consultants should incorporate reserve strategies into their practices. Profits continue to rise for those institutions that have thus aligned with these types of funds. For more information ICN has a permanent article posted discussing investment banking opportunities.