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How to choose the best Canadian bank account as a newcomer

During your first few days as a newcomer in Canada, you will need to complete certain tasks to set the foundation for your long-term financial success. Opening a bank account and applying for a credit card should be a top priority on your list. The Canadian banking industry is large and you’ll have many options to choose from. However, newcomers to Canada have distinct financial needs and not all products will be well-suited to your requirements. Typically, you should start researching banking options in Canada several weeks before your arrival to avoid delays in the bank account opening process. This article will give you an overview of banks and banking products in Canada and some essential tips on choosing the best bank account and credit card for you. Banking options in Canada Most newcomers opt for one of the “Big Five” banks, given their size and presence across the country. By market capitalization, these include Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CIBC). These banks have both a physical and a digital presence. For instance, RBC has 1,201 branches and 4,240 ATMs across Canada, as well as easy-to-use online, mobile, and phone banking options. In addition to the traditional banks, Canada also has a few digital-only banks, such as Tangerine, EQ Bank, Motusbank, and Simplii Financial. These banks also offer financial products, but may not have the full range of services that larger banks offer. Types of bank accounts There are two main types of bank accounts in Canada that serve distinct purposes: Chequing account: Your chequing account is an essential basic account. This is where you keep money that you’ll use for daily transactions, making purchases, and all of your recurring expenses. Typically, with your chequing account, you’ll earn a low or no yearly interest rate on deposits. You may also get a debit card to access this account. Savings account: A savings account is a high-interest account to help you save money over the longer term. This account is not intended for regular, everyday spending transactions. It’s ideal for money that you won’t need daily access to and can set aside as savings for an emergency fund or longer-term needs. Things to keep in mind while choosing a banking partner With all the choices available to you, selecting a banking partner that’s right for your financial needs can be confusing. As this is a crucial decision to make, there are many factors you’ll need to keep in mind to ensure your bank meets your needs. Does the bank have specialized accounts or offers for newcomers or international students? Whether you’re coming to Canada as a permanent resident or an international student, your financial needs as a newcomer will be different from those of residents who’ve been here longer and don’t have financial ties abroad. Some of the larger banks, like RBC, have distinct newcomer banking products that are specially designed to meet your requirements. Does the bank have branches or ATMs near you? Also, look at the overall presence of the banking partner to determine whether you’ll have easy access to your money. You can use the branch locator on the bank’s website to find branches or ATMs close to your home or workplace. Do they have a good reputation of service and does their mission align with your interests? Be sure to check if the bank you’re choosing has a good reputation, has advisors who are able and willing to explain financial products to you, and answers your questions. As a newcomer, you want a trusted banking partner who understands your needs, so compare customer reviews and ask your friends in Canada about their experience with their banks. Also, look at awards or recognitions the banks may have received. For instance, the Global Finance magazine ranked RBC as the #1 World’s Best Bank in North America in 2021. Does the bank offer a wide range of financial products? As a newcomer, your financial needs may be limited initially, but will likely expand over the next few years. Make sure that your bank can offer you the entire range of products from banking basics like chequing accounts and credit cards to products you’ll need over a longer term like mortgages, RESPs, auto loans, and insurance. Does the bank have staff members who speak your language? Language barriers and cultural differences should not stand in the way of your financial success in Canada. If your first language is not English or French, be sure to check if the bank you’re considering has financial advisors who can answer your questions and explain financial products in a language you’re comfortable with. How to choose the right bank account for you Not all bank accounts are the same. The requirements, fees, and account features may vary based on the financial institution and the banking product you’ve picked. Here are some things you should compare to find a bank account that meets your needs: Minimum balance requirements: Some bank accounts require you to maintain a minimum daily or monthly balance. If your balance dips below this required level, you may be charged a penalty. RBC Day to Day Banking, RBC Signature No Limit, and RBC VIP Banking accounts don’t have any minimum balance requirements, allowing you to access all your money, whenever you need it. Speak to a financial advisor to find the best bank account for your needs. Banking fees: Most chequing accounts have a monthly banking fee, which can range from $0 to $30.95. In some cases, the monthly fee can be waived if you maintain a minimum balance in the account. Statement fees: Some banks charge a small monthly fee for issuing paper bank statements. In most cases, you can opt for paperless, e-statements for no charges. Cheque or draft fees: Some chequing accounts come with free personalized cheques or bank drafts. In others, a chequebook with 50 leaves can cost as much as $50 and a bank draft can cost up to $10. Automated Teller Machine (ATM) or Interac e-Transfer limits and charges: Some accounts may have limits for how many ATM withdrawals or peer-to-peer Interac e-Transfers you can make in a month. You should also check if there’s a fee for withdrawing money from another bank’s ATM or making Interac e-Transfers to an account in a different bank. International remittance fees: As a newcomer in Canada, you may want to continue financially supporting your family back home. If you’re planning to make international money transfers regularly, be sure to check the international remittance fees for the chequing accounts you’re considering. RBC offers newcomers up to two free international remittances per month for their first year with an eligible RBC bank account. Interest rates: The interest you’ll receive in savings accounts in Canada may be much less than what you’re used to in your home country. However, High Interest Savings Accounts (HISA) usually offer a higher rate of interest to help you grow your savings faster. Offers: Some bank accounts offer incentives at the time of account opening. For instance, you may receive cash incentives, higher interest rates, or free services if you open a new account and meet some qualifying criteria. As a newcomer in Canada, choosing a bank account will likely be a top priority for you. The banking system and financial products may be very different from those in your home country, so take the time to understand each product and select a bank account and credit card that best fits your needs. Remember that you are not tied down to the banking products you choose when you first arrive, so you can always upgrade to a higher tier account or credit card later. Original article located here, published by Arrive. About Arrive Arrive is powered by RBC Ventures Inc, a subsidiary of Royal Bank of Canada. In collaboration with RBC, Arrive is dedicated to helping newcomers achieve their life, career, and financial goals in Canada. An important part of establishing your financial life in Canada is finding the right partner to invest in your financial success. RBC is the largest bank in Canada* and here to be your partner in all of your financial needs. RBC supports Arrive, and with a 150-year commitment to newcomer success in Canada, RBC goes the extra mile in support and funding to ensure that the Arrive newcomer platform is FREE to all. Working with RBC, Arrive can help you get your financial life in Canada started – right now. Learn about your banking options in Canada and be prepared.

Most in-demand jobs in British Columbia (B.C.) for newcomers

British Columbia is Canada’s third most populous province after Ontario and Quebec, with a large portion of its residents living in the Lower Mainland, which includes the coastal city of Vancouver and surrounding municipalities. The province attracts newcomers from all over the world with its cultural diversity, career opportunities, and enjoyable temperate climate. The government of British Columbia periodically invites newcomers with the skills and experience to meet the province’s growing labour requirements to work and settle in B.C. as Permanent Residents (PR) through the British Columbia Provincial Nominee Program (BC PNP). This article provides information on British Columbia’s job market, including key industries and in-demand occupations for newcomers in B.C., along with NOC codes and median wage estimates, so you can arrive prepared to kick-start your career in Canada. What are the top industries in British Columbia? Services industry: The services sector is the largest contributor to the province’s GDP and the biggest employer in British Columbia. Some key service industries include real estate, construction, banking and financial services, health care, entertainment, retail, education, and professional, scientific, and technical services. Manufacturing industry: Top manufacturing industries include aerospace, clean technology, life sciences, information and communication technology, and paper. Mining and natural gas industry: B.C. has more than 700 mining and mineral companies, and employs over 25,000 people in mining and natural gas extraction and processing. The province is rich in precious metals and non-metallic minerals. Agriculture, aquaculture, and food processing industry: A wide range of agricultural and seafood products support a varied food processing industry in the province. Forestry: B.C. is one of the world’s largest exporters of wood products and the industry employs over 55,000 people. Which cities have the most job opportunities in BC? Lower Mainland, including Vancouver, Surrey, Burnaby, and Richmond: The most populous area in all of B.C., the Lower Mainland region offers ample job opportunities in services, trade, technology, film and television, tourism, natural resources, and construction. Victoria: The capital city of Victoria has large industries centred around advanced technology, tourism, education, health, retail, construction, and agriculture. Abbotsford: Abbotsford is known for its large agribusiness industry. It also offers employment opportunities in technology and aerospace industries. Kelowna: Kelowna has a diverse economy with opportunities in agriculture, health care, manufacturing, tourism, and service industries. What jobs are in demand in British Columbia? Construction and engineering jobs in B.C. Construction managers (NOC 0711): To get a job as a construction manager, you may require a management degree and can expect to earn a median income of $41 CAD per hour. Civil, electrical, electronic, and mechanical engineers (NOC 2131, 2133, 2132): These in-demand jobs in B.C. pay between $36 CAD and $43 CAD per hour. However, you’ll need an engineering degree and a provincial licence to work as an engineer. Technology jobs in B.C. Information systems analysts and consultants (NOC 2171): IT analysts and consultants earn a median income of $36 CAD per hour. Computer programmers and interactive media developers (NOC 2174): As a programmer or developer, you can expect to make around $43 CAD per hour. Computer network technicians (NOC 2281): Technicians make a median income of $28.85 CAD per hour in B.C. Software engineers and designers (NOC 2173): Software engineering jobs in B.C. are highly paid, with a median hourly pay of $52 CAD. You’ll need an engineering degree to qualify. Business and administration jobs in B.C. Administrative officers and assistants (NOC 1221 and 1241): These roles typically pay between $23 CAD and $26 CAD per hour. Financial auditors and accountants (NOC 1111): For finance and accounting roles, you’ll need a graduate degree or diploma in relevant courses. Auditors earn an average salary of $28 CAD per hour in B.C. Accounting technicians and bookkeepers (NOC 1311): Bookkeepers are paid a median hourly wage of $24 CAD. Health care jobs in B.C. Specialist physicians, general practitioners and family physicians (NOC 3111, 3112): Most of the in-demand occupations in health care require a provincial licence. To practise as a physician in B.C., newcomers also need to take a qualifying examination. Physicians, depending on their specialization, make a median annual income between $164,237 CAD and $256,202 CAD in British Columbia. Registered nurses and psychiatric nurses (NOC 3012): Registered nurses earn a median income of $41 CAD per hour and require a provincial nursing licence. Licensed practical nurses (NOC 3233): This in-demand occupation pays a median wage of $29 CAD per hour. Medical sonographers (NOC 3216): Sonographers make between $35 CAD and $39 CAD per hour in B.C. Nurse aides, orderlies, and patient service associates (NOC 3413): Nurse aides and orderlies earn between $18 CAD and $25 CAD per hour, depending on their experience and seniority. Education and social services jobs in B.C. Social and community service workers (NOC 4212): These jobs pay around $21 CAD per hour in B.C. Educators for universities, colleges, vocational institutes, and early childhood education (NOC 4011, 4021, and 4214): University and college professors and lecturers require a provincial teaching credential to work in BC. The median hourly pay for these occupations is $43 CAD. Early childhood educators earn a median income of $19 CAD per hour. Sales and services jobs in B.C. Retail and wholesale trade managers (NOC 0621): Managers in trade earn a median hourly wage of $30 CAD in BC. Restaurant and food service managers (NOC 0631): The median hourly wage for these positions is $26 CAD. Corporate sales managers (NOC 0601): Managerial jobs in sales make an average of $31.25 CAD per hour. What is the minimum wage in British Columbia? As of June 1, 2021, the minimum wage in British Columbia is $15.20 CAD per hour. What is the unemployment rate in B.C.? In November 2021, the unemployment rate in British Columbia was 5.4 per cent. How do I move to British Columbia? In addition to the federal Express Entry program, the province also invites skilled immigrants to come to B.C. as permanent residents through the British Columbia Provincial Nominee Program (BC PNP). To work in B.C. temporarily, you’ll require a work permit. You’ll also have a better chance of finding a job if your skills match the province’s in-demand occupations. British Columbia is also home to some of the best universities in Canada, which welcome thousands of students each year. After graduating from your study program, you may be eligible for a Post-Graduation Work Permit and can gain valuable work experience that will make it easier for you to settle permanently in Canada. About Arrive Arrive is powered by RBC Ventures Inc, a subsidiary of Royal Bank of Canada. In collaboration with RBC, Arrive is dedicated to helping newcomers achieve their life, career, and financial goals in Canada. An important part of establishing your financial life in Canada is finding the right partner to invest in your financial success. RBC is the largest bank in Canada* and here to be your partner in all of your financial needs. RBC supports Arrive, and with a 150-year commitment to newcomer success in Canada, RBC goes the extra mile in support and funding to ensure that the Arrive newcomer platform is FREE to all. Working with RBC, Arrive can help you get your financial life in Canada started – right now. * Based on market capitalization

Most in-demand jobs in Ontario for newcomers

Ontario is one of the most popular provinces among newcomers. Its cultural diversity, economic prosperity, and ever-growing job market are just some of the reasons newcomers from across the world choose to settle in Ontario. The government of Ontario periodically invites newcomers with the skills and experience to meet the province’s growing labour requirements to work and settle in Ontario as Permanent Residents (PR) through the Ontario Immigrant Nominee Program. This article provides information on Ontario’s job market. This includes the top industries that contribute to its economy, the most in-demand occupations for newcomers in the region, NOC codes, and median wage estimates, so you can arrive prepared to kick-start your career in Canada. What are the top industries in Ontario? Services industry: The services sector is the largest contributor to the province’s economy and employs nearly 79 per cent of the people living in Ontario. Some of the key service industries include banking and financial services, professional, scientific and technical services, and arts and culture. Manufacturing industry: Ontario’s manufacturing industry is one of the biggest in North America. Some of the most prominent manufacturing industries are automotive, information and communication technologies, biotechnology, pharmaceuticals, and medical devices. Agriculture: Ontario’s farming sector contributes nearly 25 per cent of Canada’s farm revenue. Mining industry: In addition to being one of the world’s top 10 producers of nickel and platinum, Ontario is also rich in gold, silver, copper, zinc, cobalt, and non-metallic minerals. Southern Ontario also has a sizeable oil and gas industry. Forestry industry: The forestry industry in the province creates nearly 200,000 direct and indirect jobs. Which cities have the most job opportunities in Ontario? Toronto and the Greater Toronto Area (GTA): This is the most populous region in the province, and Toronto is the financial hub of Canada. Other large industries in Toronto and the GTA include technology, real estate, trade, and manufacturing. Ottawa: As the capital of Canada, Ottawa offers significant job opportunities in administration. It is also a major centre for the high technology and finance industries. Brantford: This city is a manufacturing hub and offers job opportunities in food and beverage manufacturing, advanced manufacturing, rubber and plastic production, and warehousing and distribution. In addition, Brantford also has a growing media and entertainment sector. Hamilton: Another manufacturing centre, Hamilton has a large job market in the food processing and agribusiness industry, as well as in advanced manufacturing. Waterloo: The Toronto-Waterloo region is often referred to as the ‘Silicon Valley of the North’ and presents significant opportunities in the technology sector. Which jobs are in demand in Ontario? Health care jobs in Ontario Managers in health care (NOC 0311): Managerial positions in health care typically require a degree in management and pay around $48.21 CAD per hour. • Registered nurses and psychiatric nurses (NOC 3012): You’ll need a nursing degree and a provincial nursing licence to qualify. The median hourly pay for registered nurses in Ontario is $36 CAD. • Medical laboratory technologists (NOC 3211): As a lab technologist in Ontario, you can earn a median income of $38 CAD per hour. • Opticians (NOC 3231): Opticians make between $27 CAD and $34 CAD in Ontario. • Licensed practical nurses (NOC 3233): Licensed nurses make a median hourly wage of $27 CAD. • Nurse aides, orderlies, home support workers, and patient service associates (NOC 3413, 4412): For these occupations, the hourly wage ranges between $17.50 CAD and $20 CAD. Service sector jobs in Ontario To qualify for service sector jobs, you’ll usually require at least an undergraduate or graduate degree from a university. Administrative services managers (NOC 0114): Managerial positions in administration typically pay a median salary of $41 CAD per hour. Banking, credit and other investment managers (NOC 0122): Managers in the finance sector earn a median income of $50 CAD per hour. You’ll usually need a degree in management or finance to qualify. Advertising, marketing, and public relations managers (NOC 0124): These roles require a degree in marketing or management and pay a median income of $40 CAD per hour. Business services managers (NOC 0125): These roles pay an average hourly salary of $43 CAD. Corporate sales managers (NOC 0601): Sales manager roles in Ontario can be fairly high paying, with a median hourly wage of $52 CAD per hour. Restaurant and food services managers (0631): Compared to other managerial positions, restaurant and food services managers have the lowest median wage at $19.23 CAD per hour. Construction managers and managers in transportation (NOC 0711, 0731): Employees in these roles earn a median hourly wage between $38 CAD and $40 CAD. Human resources professionals (NOC 1121): HR professionals make an average income of $35 CAD per hour. Professional occupations in business management consulting (NOC 1122): In Ontario, business consultants make a median hourly salary of $41 CAD. Mathematicians, statisticians, and actuaries (NOC 2161): As a mathematician, you can earn an average of $45 CAD per hour. However, you’ll need an advanced degree in mathematics, statistics, or a related subject. Technology sector jobs in Ontario To work as an engineer in Ontario, newcomers require a licence from the province in addition to an engineering degree. Engineering managers, computer and information systems managers (NOC 0211, 0213): Managerial level in-demand jobs in Ontario pay a median hourly wage between $52 CAD and $53 CAD. To qualify, you may require a degree in engineering, management, or both. Computer engineers (NOC 2147): As a computer engineer, you can earn a median income of $44 CAD per hour. Database analysts, software engineers and designers, computer programmers and interactive media developers (NOC 2172, 2173, 2174): These technology sector roles pay between $40 CAD and $46 CAD per hour in Ontario. While many such positions require an engineering degree, some roles may also be open to applicants with a degree in computer science. Web designers and developers (NOC 2175): Web designers in Ontario can earn a median hourly wage of $31 CAD. Manufacturing jobs in Ontario Manufacturing managers (NOC 0911): Managers in manufacturing make a median income of $43 CAD per hour in Ontario. Machine operators in the mining and processing, chemicals, plastics, woodworking, and food and beverage industries (NOC 9411, 9416, 9417, 9418, 9421, 9422, 9437, 9446, 9461): Machine operators and process control workers typically earn a median hourly wage between $15 CAD and $23 CAD, depending on the industry they are in. Assemblers, fabricators, inspectors, and testers in the electronics and mechanical industries (NOC 9523, 9526, 9536, 9537): The median hourly wage for these jobs is between $16 CAD and $22 CAD. Agriculture jobs in Ontario The median hourly wage for in-demand agriculture jobs is between $14.35 CAD and $20 CAD. General farm workers (NOC 8431) Nursery and greenhouse workers (NOC 8432) Harvesting labourers (NOC 8611) Industrial butchers, meat cutters, poultry workers (NOC 9462) What is the minimum wage in Ontario? The general minimum wage in Ontario as of October 1, 2021, is $14.35 CAD per hour. For student workers, the minimum wage is $13.50 per hour. What is the unemployment rate in Ontario? The unemployment rate in Ontario in September 2021 was 7.3 per cent. However, the province’s economy is still recovering from the impact of the COVID-19 pandemic and, with each quarter, the unemployment rate is inching back towards the pre-pandemic level of under six per cent. How can I move to Ontario? In addition to the federal Express Entry program, the province also invites permanent residents through the Ontario Immigrant Nominee Program. If you’re planning to work in Ontario temporarily, you may be able to qualify for a work permit if your skills align with the province’s in-demand occupations. Ontario also boasts of some of the best universities in Canada and, each year, thousands of students come to Canada on study permits, with the aim of receiving a world-class education and settling permanently in Canada. Original article located here, published by Arrive. About Arrive Arrive is powered by RBC Ventures Inc, a subsidiary of Royal Bank of Canada. In collaboration with RBC, Arrive is dedicated to helping newcomers achieve their life, career, and financial goals in Canada. An important part of establishing your financial life in Canada is finding the right partner to invest in your financial success. RBC is the largest bank in Canada* and here to be your partner in all of your financial needs. RBC supports Arrive, and with a 150-year commitment to newcomer success in Canada, RBC goes the extra mile in support and funding to ensure that the Arrive newcomer platform is FREE to all. Working with RBC, Arrive can help you get your financial life in Canada started – right now.

The Rise and Fall of Cryptocurrency—Again

2021 saw a meteoric rise in the value of Bitcoin and other cryptocurrencies. In addition, a reported 16% of Americans say they have invested in, traded or used cryptocurrency. But over the last two months, the value has dropped significantly. In September, El Salvador made Bitcoin a legal tender in the country and lost more than 20% of its investment in the four months since, resulting in the International Monetary Fund asking the country to stop its embrace of the currency. We have seen this song and dance before with cryptocurrency values dramatically rising and falling, but where do we go from here?  According to Villanova University's John Sedunov, PhD, an associate professor of finance, people might have invested in crypto as a hedge against rising inflation in the last year because there weren't alternatives to the stock market, which itself has seen its fair share of volatility. If that trend continues and inflation concerns aren't erased, more Americans could invest in crypto.  As crypto continues to work its way into the everyday vernacular, there could be an interesting player to help bring it more mainstream: traditional banks. Recently, JPMorgan announced a $12 billion investment into technology. JPMorgan, which has already launched one of its own digital coins, is ahead of the competition.  "I think if anything is going to lead the way, as backwards as it is, it will be the traditional banks, specifically JPMorgan," Dr. Sedunov said.  "Their reputation will bring competitors to market, allowing for the potential to become more mainstream." One of the key things, Dr. Sedunov notes, is that there needs to be wide knowledge and understanding about how cryptocurrency, and the blockchain where it's stored, actually works.  "Until it's easier to understand and explain and becomes common knowledge, it's going to be a rough ride. It has to get to the point where the utility and ease of use is not trivial. It's very easy to buy it, but to spend or move it, it's a painful process to avoid fees. It has to be easier to access."

Aston University opens applications for Midlands’ Pitch Up investment competition

The Minerva Birmingham Pitch Up Competition is aimed at small business leaders looking for support with gaining investment Ambitious business leaders can improve their ability to win investment while boosting their profile The final will take place at Venturefest on 24 March 2022 at Eastside Rooms. Applications to Minerva Birmingham’s Pitch Up 2022 competition have opened. Formerly known as ‘Pitchfest WM’ and now in its 7th year, participating businesses have the chance to pitch head-to-head to a variety of investors to win a cash prize, and the ultimate accolade of Pitch Up Champion. Pitch Up is a collaboration, co-delivered by the Aston Centre for Growth, University of Birmingham Enterprise, and Minerva Business Angels, part of the University of Warwick Science Park Ltd. The competition provides the opportunity for ambitious business leaders to improve their ability to win investment while simultaneously boosting their business profile. Interested business leaders can apply here, applications close on 28th February. Shortlisted applicants will be supported through a workshop to refine their pitch deck, sharpen their pitching skills and receive valuable feedback in order to improve. The first workshop will take place on 20 January 2022. A select number of successful applicants will then advance to the next stage of the competition and have the opportunity pitch to an investor-led panel to gain more practice and receive more feedback. The best performing businesses will then be selected to pitch at the prestigious Pitch Up Final. This will take place as part of Venturefest WM on 24 March 2022 at Eastside Rooms, Birmingham. Venturefest attracts some 300 delegates including investors, entrepreneurs and innovators. The overall winner will be decided by audience vote and crowned Pitch Up Champion 2022, they will receive a cash prize and the option of additional support from Minerva Birmingham. Last year’s winner, Mark Platt Founder and CTO of Figura Analytics, said: “I was really amazed to win last year’s competition and delighted at the new connections and networks I made as part of the process. “The support received through the competition was fantastic; each workshop I attended allowed me to meet new people, learn new skills and left me energised and eager for more. Our winning pitch was definitely the result of some really insightful advice and feedback from the team and panel members.” The event has put more than 125 entrepreneurs directly in front of investors and helped bring in excess of £40,000,000 of investment to the region's small businesses to date. Paula Whitehouse, director of Aston Centre for Growth, said: “We are delighted to continue this collaboration, Minerva Birmingham Pitch Up exists to boost access to finance for the region’s most exciting and innovative young businesses. “The competition continues to play a crucial role in unlocking opportunities and investment for the future of high growth companies within the region.” Alex Toft, head of Minerva Business Angels, part of the University of Warwick Science Park Ltd. said: “It’s great to be part of such a collaborative relationship building not only support for our entrepreneurs but helping to build that support structure of finance and experience provided by investors. “This is a great opportunity for those earlier in their development cycle who would otherwise struggle to get noticed. We also continue to call on those who have never considered angel investing to join to reach out to us to find out more.” David Coleman, CEO of University of Birmingham Enterprise said: “Within the Midlands, there is a clear disparity between the large proportion of the UK's high-growth companies that are based here, and the investment secured. “That's why collaborative programmes like Pitch Up, which engage a diverse range of investors, are so important to increasing the likelihood of companies securing the funding they need.” Find out more about Pitch Up, by contacting centreforgrowth@aston.ac.uk, visiting Minerva Birmingham Pitch Up or apply now here.

Good COP or bad COP? | The Aston Angle

Four Aston University experts reflect on COP26 and what it means for transport, community and global action on decarbonisation, support for small businesses and China’s coal consumption. COP26 was the 26th United Nations Climate Change conference held in Glasgow from 31 October to 13 November 2021. The participating 197 countries agreed a new deal, known as the Glasgow Climate Pact, aimed at staving off dangerous climate change. But will it be enough? Dr Lucy Rackcliff explains why replacing petrol and diesel vehicles with electric ones alone is not radical enough. The overwhelming message coming from COP26 transport day seemed to be that moving to zero emission-vehicles would solve the well-documented issues created by petrol and diesel fuelled vehicles. As noted at the conference itself, transport is responsible for 10% of global emissions, and emissions from transport continue to increase. The WHO estimates that transport-related air pollution affects the health of tens of thousands of people every year in the WHO European Region alone. However, on-street pollution is not the only effect we should seek to address. Transport is responsible (directly or indirectly) for a wider range of environmental issues, and a wider range of health impacts. Moving to electric vehicles will not address impacts such as loss of land for other activities, use of finite resources in the manufacturing process, the need to dispose of obsolete materials such as used tyres, and the health effects of sedentary lifestyles, facilitated by car-use. In urban areas in particular, re-thinking policy to focus on walking, cycling and public transport-use could free up land for other activities. Car parks could become actual parks, in turn encouraging more active lifestyles, creating space for people and plants, and leading to a range of wider societal benefits. Assuming that replacing petrol and diesel vehicles with electric ones will solve all our problems is a strategy which lacks ambition, and thus denies us the benefits that more radical thinking could deliver. Dr Lucy Rackcliff, Senior Teaching Fellow, Engineering Systems & Supply Chain Management, Aston Logistics and Systems Institute, College of Engineering and Physical Sciences. "Assuming that replacing petrol and diesel vehicles with electric ones will solve all our problems is a strategy which lacks ambition." Professor Patricia Thornley reflects on the role that Aston University and EBRI can play in empowering community action and informing global action with research. COP26 energy day was a fabulous experience. I have never before seen so many people in one place with one ambition: to support and accelerate decarbonisation of the UK’s energy systems. We ran a “fishbowl”, which allows people with different perspectives on a topic (experts and non-experts) to participate in dialogue around a common interest. Our researchers, local government representatives, industrialists and students shared their thoughts on what our future energy mix should look like, how it should be delivered and who needs to act. Without doubt the consensus was that many different technologies have a role to play and there is an urgent need to accelerate implementation. There were reflections on the importance of governance at different levels and an interesting discussion around the relative merits of centralized solutions and devolved actions. The reality is that of course we need both and that made me think about what Aston University and EBRI can do. Of course we should implement centrally with initiatives like the impressively low carbon Students’ Union building, but we also need to raise awareness among our students. Our film showing with the Students’ Union a week later helped with that I hope, and many more of our courses are incorporating sustainability elements which is fantastic. But what we haven’t quite achieved yet is an empowered, proactive voice that would lead to wider community action. There are pockets of excellence but a lot still to be done. My second week at COP26 was very different with police presence outside a building where I had three meetings with industrialists on the controversial topics of forestry and land-use. It was sad to be working with key players to improve sustainability and increase carbon reductions through UK bioenergy while listening to drumbeats outside from objecting protestors. There is a real lack of understanding around forest management and global land use and we need to work harder to improve that. It is a huge challenge, but one that EBRI will work hard to address. Professor Patricia Thornley, Director of EBRI, Energy and Bioproducts Research Institute (EBRI), College of Engineering and Physical Sciences. "There is a real lack of understanding around forest management and global land use and we need to work harder to improve that." Professor Presanta Dey explores whether Government pledges on climate change will translate to practical support for small businesses Following the COP26 climate change summit, the UK Government led the way in making a series of pledges and policy commitments to combat climate change. The question is: how will this translate to practical support for SMEs? Large corporations often take centre stage at COP, which is welcomed, but if we are to see real change, everyone needs to be involved. COP26 provided a refreshing voice for UK small businesses which featured panel discussions on the ‘SME Climate Hub’, highlighting net zero opportunities and challenges for SMEs. The momentum of COP26 has already inspired over 2,000 UK small businesses to sign up to the UN's Race to Zero campaign, which is designed to accelerate the adoption of credible net-zero targets. A long journey ahead still awaits us, however campaigns like these will hopefully start a ripple effect inspiring the remaining six million UK SMEs to take climate action. Small businesses have been crying out for more assistance from the government in the form of ‘green’ grants and financial support to enable them to make the necessary long-term changes. The timely announcement of HSBC’s £500m Green SME Fund at COP26 marks a promising first step towards making it easier for SMEs to fund their green ambitions. In summary, COP26 provided some comfort to UK SMEs seeking a higher level of commitment from government, financial services and businesses. This moment must act as a catalyst for policy makers to continue removing the barriers that are holding small businesses back. Professor Presanta Dey, Professor of Operations & Information Management, College of Business and Social Sciences. Professor Jun Du explains what China’s deal means for the rest of the world following its own energy crisis earlier this year… Despite the many disappointments expressed around the COP26 outcomes, important progess has been made for the world economy moving towards carbon neutrality. Among the noticeable achievements China and the US, which together emit 43% of the total CO2 in the air, have agreed to boost climate co-operation despite many disagreements. This includes China’s pledge to more actively control and cut methane emissions during the next decade - even when the country did not sign up to the global methane pledge made in Glasgow. Reaching net zero will be an unprecedented challenge for all countries. China will need to do the heaviest lifting among all. The country’s energy crisis earlier this year has shown just how hard it will be to reach net zero. The exceptionally early and cold winter this year will demand even more coal, so China’s willingness and resolve for climate commitments are good news to all. While lots of attention was turned to the absence of China’s president, Xi Jinping, from the COP26 climate summit, what is less appreciated is the fact that China is serious about decarbonisation. Few countries invest as much as China in that area, nor grow as fast in finding alternative energy to coal and in green industries like electric cars. China has set specific plans in its 14th national five-year plan for economic and social development to reach peak carbon emissions by 2030 and carbon neutrality by 2060. COP26 could be an additional driver for “an era of accountability” for China. Professor Jun Du, Professor of Economics, Finance and Entrepreneurship, Centre Director, Centre for Business Prosperity, Aston Business School levy.

Brexit caused a large negative effect on UK trade pre-pandemic - new Aston University research

Professor Jun Du and Dr Oleksandr Shepotylo analysed the causal effect of Brexit on the UK’s services trade between 2016 and 2019 They found the UK experienced an average shortfall of £18.5 billion worth of services exports for each of those years Transport, Travel, Insurance and Telecom sectors experienced significant decline post-2016 No significant decline was found in other services including intellectual property, construction and financial. New research from economics experts at Aston University has found Brexit has caused a largely negative effect on UK services trade since the EU referendum. Professor Jun Du and Dr Oleksandr Shepotylo, from Aston Business School, analysed the causal effect of the Brexit referendum on UK’s services trade over the period between 2016 and 2019, in comparison to other major services exporters. They found the uncertainty associated with the UK-EU trade negotiations following the referendum caused harms to the UK services economy as a whole, reducing firms’ exports of services. This damages the competitiveness of services sectors which make up a lion’s share of the UK economy in terms of gross output, value-added and jobs. Professor Du and Dr Shepotylo used a Synthetic Difference in Differences (SDID) estimator to construct a counterfactual of the UK, had it not voted leave in 2016, to compare its services exports performance. This was done by comparing the actual performance of the UK with the modelled performance of a country that looks much like the UK, but did not vote to leave the European Union. They found Brexit resulted in the UK experiencing an average shortfall of £18.5 billion worth of services exports every year between 2016 and 2019 relative to what it would have been, had the UK remained in the EU. The impact varied considerably between different types of services. The UK’s exports in the category of transport, travel, insurance and telecom services saw a statistically significant decline following the referendum. No significant decline was found in business, intellectual property, construction, financial or personal, cultural and recreational services. In addition, Professor Du and Dr Shepotylo did not find evidence to suggest that UK businesses have redirected exports in services from the EU markets to those outside the EU, which is in contrast to exports in goods. The research suggested that Ireland has benefited significantly during this period, with growth in post-Brexit services exports up by £24 billion annually over 2016 to 2019 in the country compared to the counterfactual scenario if Brexit did not occur. This translates to 14.75% of Ireland’s 2019 total services exports, with growth clustered largely in the telecoms, business, intellectual property, and insurance sectors. Jun Du, professor of economics at Aston Business School, said: “Brexit marked a rupture in the highly integrated UK-EU services markets that had been developed during the UK’s membership of the single market. However, the UK’s strength in services was not reflected in the government’s ambitions for the sector in the EU-UK trade negotiations that followed the referendum. “There are other winners besides Ireland in some post-Brexit services areas. The Netherlands have increased considerably in ‘Business’ and ‘Intellectual Property’ exports. “Spain has seen growth in ‘Travel and transport’ services exports. Germany has gained in ‘Transport’, ‘Insurance’, ‘Telecom’ and ‘Intellectual Property’ services exports. While Ireland seems to have done exceptionally well in relation to the export of ‘Telecom’ services, a sharp contrast emerges to the lost exports not just from the UK, but also from the Netherlands, Switzerland and France.” Dr Oleksandr Shepotylo, a senior lecturer in economics, finance and entrepreneurship at Aston University, co-wrote the working paper and said: “UK services exports are 5.7% lower than they would be without Brexit. It reflects an overall decline of the UK as a place for doing business. “What economists tend to agree on is that the UK’s exit from the EU’s custom union and single market may have more significant impacts on services than goods, and more severe impact on post-Brexit regulated services than unregulated services. “It will take some time for the full impact of Brexit on UK services to emerge. Freedom of movement and data flow in some areas between the UK and EU could remain restricted. Stability, transparency and regulatory consistency in financial markets could be challenged. But new opportunities might surface. “Continued trade negotiations and dialogues regarding trade liberalisation are essential with the EU and large, fast-growing markets beyond Europe. Crucial to understanding these impacts will be reliable data and rigorous analysis. Our modelling of marked losers and winners in post-Brexit services trade provides new evidence for an open discussion of the post-Brexit trade in services.” You can read the full working paper HERE

Emory Experts - Post-Financial Crisis: How Well do Mutual Fund Stocks Fare?

Following the global financial crisis in 2008, the assets of passively managed mutual funds have ballooned, while the market share of actively managed funds has fallen dramatically. Addressing this topic, a new research has been coauthored by Jeffrey “Jeff” Busse, professor of finance, and Goizueta alumni Kiseo Chung 17PhD, assistant professor of finance, Texas Tech University and Badrinath Kottimukkalur 17PhD, assistant professor of finance, George Washington University. In their paper, the researchers explain the shift in assets from actively managed funds to passive funds, “Impediments to Active Stock Selection and the Growth in Passive Fund Management. In 1999, Busse and his coauthors explain, the net assets of passive funds were “less than an eighth the assets of active funds.” But by the end of 2019, “the market share of passive equity funds increased to more than 50 percent,” Busse, Chung, and Kottimukkalur note. Passive funds track indices such as the S&P 500, Dow Jones Industrial Average, NASDAQ Composite, and Wilshire 5000—all indices that have been difficult to beat over the last decade. According to the Wall Street Journal, from 2008 to 2018, more than 80 percent of actively managed funds in the U.S. underperformed the S&P Composite 1500. This is in large part, the trio notes in their paper, because the so-called “FAANG” stocks—Facebook, Apple, Amazon, Netflix, and Google—comprise such a large part of these indices. In fact, the top 10 stocks in the S&P 500 currently make up around 30 percent of its market cap. “The market caps of these companies are huge, and they’ve done exceptionally well since the financial crisis,” Busse explains. Hence, active fund managers and their teams of analysts have found it much more challenging to discover undervalued and overlooked stocks with positive alphas ─ the stocks that outperform an index. “As such, a general move toward passively managed funds is not so surprising,” the paper reveals. Finding Diamonds and Avoiding Duds Making it even more difficult to find diamonds in the rough is a lack of volatility in the stock market. Except for some isolated periods, including the month or so around the start of the pandemic in March 2020, the market hasn’t experienced much volatility since 2008. Without wide swings in prices, fund managers have less opportunity to buy low and sell high. Over the same time period, aggregate stock liquidity has also been high, which means less chance for fund managers to pick up winners at bargain prices. “When there’s money in the market—when there’s liquidity—it means there aren’t a lot of disagreements on prices,” explains Busse. “Liquidity is inversely related to mispricing,” the researchers explain in their paper. This combination of circumstances—the rise of the FAANG stocks, the lack of market volatility, and higher liquidity—is making it much more difficult for actively managed funds to find stocks that will help their funds beat the indices, and therefore, outperform the passive funds. As a result, justifying their management fees gets more complicated. According to Thomson Reuters Lipper, the average expense ratio (management fees divided by total investment in a fund) for actively managed funds is 1.4 percent compared to 0.6 percent for the average passive fund—nearly three times as much. While active fund managers have realized that these higher costs are no longer paying off and have moved to reduce them, actively managed funds continue to lose market share. Market Share Gain of Passively Managed Funds While the authors weren’t surprised by the growth of passively managed funds, they were surprised by how much they grew. From 1999 to 2019, the authors note, the number of actively managed funds grew by 11 percent, while the number of passively managed funds increased by 244 percent. “There haven’t been any papers that try to explain why passive funds have gained so much market share,” says Busse. He and his coauthors believe their research illustrates that it’s in large part because the market, post-financial crisis, is challenging for stock pickers. “As such, it has been difficult for actively-managed funds to recoup the costs associated with active management, and compared to earlier periods, passively managed funds are better positioned to gain market share,” they explain. “As the payoffs to active management decrease, it becomes more difficult to justify the costs of active management, and, thus, we expect funds to decrease these costs given their negative performance implications.” Busse doesn’t believe the current fund management environment will continue indefinitely. When the pandemic knocked the S&P 500 down 30 percent in March 2020, managers did gain opportunities to find positive alpha stocks—which they bought. “It’s just, on average, over the last 10 years, there haven’t been enough of those opportunities,” explains Busse. “It’s a matter of hanging in there and, in some sense, keeping your investors from fleeing to passive funds until the environment is a little bit better.” Jeffrey Busse is the Goizueta Foundation Term Professor of Finance where his research focuses on investments, with an emphasis on mutual funds. Jeff is available to speak with the media regarding this important topic – simply click on his icon now to arrange an interview today.

Aston University makes experts available through COP26

The University’s website is highlighting its experts, projects and research, latest news and podcasts around sustainability On 4 November the University’s Supergen Hub will co-host a ‘fishbowl’ conversation to develop and interrogate visions for a net zero energy future Aston Originals has produced three shows around finance, energy and transport ahead of the summit. Aston University has launched its COP26 campaign to highlight the work being done by its academics and researchers to support the United Nation’s biggest climate change targets. The University’s website will highlight its experts, projects and research, latest news and podcasts around sustainability and climate change. The COP26 summit will be attended by the countries that signed the United Nations Framework Convention on Climate Change (UNFCCC) – a treaty that came into force in 1994. More than 190 world leaders will meet in Glasgow, between 31 October and 12 November, to discuss ways of achieving net-zero carbon emissions by 2050 and keeping the global temperature rise to 1.5 degrees Celsius this century. High profile attendees are expected to include Greta Thunberg, Pope Francis and Sir David Attenborough. Representatives from Aston University will also be taking part at the global summit. On 4 November during ‘Energy Day’, the six UK Research and Innovation Supergen Hubs, one of which involves academics from Aston University, are hosting a ‘fishbowl’ conversation with the public, to develop and interrogate visions for a net zero energy future. It will be participant-driven, enabling multiple perspectives to be aired and offering an opportunity for a variety of participants to engage, and will be live-streamed for those who cannot attend in-person (tickets available for the live-stream here). Also during Energy Day at COP26, the Aston University Supergen Bioenergy Hub will be hosting a ‘Build your own biorefinery’ game on the COP26 Universities Network exhibition stand within the Green Zone. Members of the public will be invited to create their own biorefinery (where multiple products are created from one feedstock to extract maximum value), demonstrating the many routes to producing bioenergy and bioproducts and the co-benefits that can be achieved through different choices. The campaign will also look at the huge carbon footprint of asthma inhalers and a new project which aims to redesign the canisters, so they are more environmentally friendly. The University’s new digital content brand, Aston Originals, has produced three videos showcasing its experts under the topics of finance, energy and transport. Professor Simon Green, pro-vice chancellor research at Aston University, said: "COP26 highlights how big a challenge the climate crisis is for everyone around the world. “I am proud of the work being done at Aston University to combat the problems facing the planet – from the researchers in the College of Engineering and Physical Sciences carrying out world-leading research into new and innovative ways of converting biomass into sources of sustainable energy to experts in the College of Business and Social Sciences who are helping small and medium sized enterprises (SMEs) cut their carbon footprint.”

Indebted Chinese Real Estate Developer Could Become Systemic Risk

Recent speculation surrounding the property developer China Evergrande Group caused the S&P 500 to have its worst day since May. But what we should look out for is systemic risk, according to John Sedunov, PhD, associate professor of finance at Villanova University. Evergrande currently has the biggest debt out of all publicly traded real-estate management or development companies. “The big issue seems to be Evergrande’s ability to repay its debt. The bigger issue is a potential for systemic crises or contagion to unfold,” said Dr. Sedunov. Another possibility is that Beijing could allow Evergrande to default. “Evergrande is a large Chinese developer, and the Chinese government may allow it to fail. It owes a lot of money to financial institutions and other market participants,” says Dr. Sedunov. With these risks, assets were moved from stocks, oil and Bitcoin to much safer options. “What’s potentially at stake is a contagion event where institutions with large exposure to Evergrande experience distress or fail as a result of lost cash flows they are expecting from Evergrande. This scenario is exacerbated if the company is allowed to fail,” said Dr. Sedunov. Does this present any other future concerns? Per Dr. Sedunov, Evergrande’s collapse could also impact the housing market. “More at issue is also that the real estate sector in China looks to be quite overheated (and it may be here as well), and this could be a signal of a collapse in real estate values, which again can bleed back into the financial system,” he said.