Never miss an update

Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40




Never miss an update

Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40 - blurrypron.com

    Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40
    Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40
    J.Renee Women's Schooner Fashion Sneaker Brown/Black Size 11.0 , Naturalizer Womens jetty Leather Low Top Zipper Fashion White Size 7.5 , Puma Vikky Platform Ribbon SL Metal 367816 01 Womens Shoes White Sneakers CasualCole Haan Womens Rosiesam Low Top Slip On Fashion Sneakers Grey Snake Size 6.0Shoes Puma Pulse XT Core 188558 04 woman Fitness Running Gym Black Purple , Women Reebok BD4156 Train grip RS 5.O GTX Walking shoes , Mr/Ms Amb Shoes 192993 Blue 36 service Medium cost Brand feast , Women Adidas CQ2565 Court vantage casual shoes white black sneakersMan's/Woman's ARMISTICE Stone One Comet Bronze Good world reputation Quality and quantity guaranteed Fashion versatile shoes , Men's/Women's ARMISTICE Stone One Pickles Ciment durability Impeccable VariousADIDAS ORIGINALS SUPERSTAR NUEVOS BLANCOS NÚMERO 6Man/Woman adidas Shoes 605276 White 23cm High security Attractive fashion Different stylesADIDAS NMD R1 WOMEN BY9315 WONDER PINK WONDER PINK CORE , Man's/Woman's CONVERSE All Star Hi Cuir Bordeaux Exquisite (middle) workmanship New products in 2018 retail price , COLE HAAN Shoes 500057 Purple 5 , Converse All Star Chuck Taylor Baby Blue Canvas Sneaker Trainer Blue PythonNew FILA TKO TR Shoes Grey Pink Athletic Running Women Sneakers FS1RNA1111F_GPKMen's/Women's CONVERSE All Star B Blanc Gris Queensland Elegant and sturdy packaging Preferential price , NEW Puma x FENTY by Rihanna Fenty Avid Sneakers - Puma White-Drizzle-Whitemen's shoes POLO CLUB BEVERLY HILLS 11 () sneakers dark brown suede AK998-FGentlemen/Ladies NIKE Shoes 285081 Pink 24.5cm Clearance price Sufficient supply Seasonal promotionNew FILA Identity ER Shoes Grey Pink Athletic Running Women Sneakers FS1RNA1031FGentleman/Lady VESPER CUIR NOIR New product Pleasant appearance Reliable reputation , Gentlemen/Ladies CONVERSE All Star New B Rouge The color is very eye-catching online shop British temperamentShoes Enval Decoltè Women's 49514 Wedge Suede Grey moda Made in ItalyGentleman/Lady CONVERSE All Star Hi Cuir Marron quality Pleasant appearance Sales online storeMen's/Women's VICTORIA Sneaker 1147102 Multi Clearance price online shop Elegant and solemn , Man/Woman KENZO Shoes BluexMulticolor 7 Good design The highest quality material TRUETommy Bahama Women's Cove Island Fashion Sneaker ,
    Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40 - blurrypron.com>Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40 - blurrypron.com
    Tory Burch "Eloise"Ridding Boots MRSP$495. Size 7.5MCinch Classic Mad Dog Cowgirl Boot - Square Toe Chocolate 7.5 MFRYE Womens Shirley Over-The-Knee Riding Boot- Pick SZ/Color. , Vetements Logo Printed Platform Boots Size 36 , NIB Christian Louboutin Love Is A Boot 100 White Red Spike Heel Ankle Bootie 40 , Man's/Woman's Betts Loafers Flats size 11 Diverse new design high quality Direct business , Troentorp Bastad Swedish Clogs: Karin, Persian Blue, Size 41MARC FISHER ANNIE PERFORATED ESPADRILLE WEDGE SANDALS IN BLUSH SUEDE SIZE 8 , Made in Italy Décolleté Shoes Casual Shades Pumps brown high heels 78498 moda1 , Mr/Ms ysl tribute shoes 39.5 Easy to use Settlement Price King of the crowd , Aravon Women's Keri Wedge Strappy Sandals - Beige , NIKE Alpha Pro 2 Low D Black White Detachable Football Cleats Mens 10 12 13 13.5New Men's Under Armour Highlight MC Cleat LE - Ohio 1275479-611 Size 11.5 , MEN’S SHOES REEBOK REVENGE PLUS MU CN3396Nike Air Presto Mid Utility Men Size 13 Running Shoes Black Volt Grey 859524 003Asics men's runing shoes gel quantum 360 knit white snow silver size 7.5 us , Men Work Boot Cobra C11 Black Genuine Leather Goodyear Welt Construction New , Men's Brown Chic Brogue Tassel Loafers Leather Wing Tip Carved Pointy Toe Shoes$320 Grant Stone Suede Shoes Plain Toe Oxford Dress Casual Shoes Men's 8.5 C/E , Skechers Street Women's Women's Street-Star Side Fashion Sneaker , Guiseppe Zanotti Black Fur Wedge High Top Leather SneakersVans ISO 1.5 Aimee Fuller White Unisex Men's 9.5 Women's 11 NEW In BoxZumba Womens Energy Boom Dance Shoe Sneaker Black Size 13 M , Women BD1708 Reebok Sneakers Classic Grape light Road Casual shoes , Under Armour Women's Micro G Speed Swift Running Shoe in size 6 or 6.5, Pink NEW , Topo Athletic Womens Halsa Running Shoes W010 Emerald/Black Size 7.5Brand New Nike Air Huarache Run Ultra Particle Pink 6 Women's 819151-603Nike Air Max 97 Womens AR1911-600 Barely Elemental Rose Running Shoes Size 10TOMMY HILFIGER Womens GIORGIA Over Knee Brown Leather Boots US 6M (888448520140)BEARPAW Women's Knit Tall Snow Boot 6 BM US / 37 EUR, Gray Ii
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40 - blurrypron.com

    There’s no doubt that the last 2 years has seen the coming of age of ETFs. With what was once an unknown type of investment quickly becoming a $30b industry in Australia ($3 trillion globally). However, as ETFs have moved from the unknown to the flavour of the month, an increasing number of commentators have called on the risks ETF investors face, with some even stating that ETFs will be the source of the next market crash. Today we take a look at some of the claims as to why some believe there are so many risks associated with ETFs.

    Claim 1: ETFS are blindly pushing up stock prices

    Many have written about share markets being at record highs. In an interview with the AFR, Wilson Asset Management chief Geoff Wilson discussed his portfolios’ current high weightings to cash due to concerns of market over-valuations. 

    US based fund manager FPA capital called ETFs “Weapons of Mass Destruction”and stated “The flood of money into passive products is making stock prices move in lockstep and creating markets increasingly divorced from underlying fundamentals”. The argument they make is as ETFs blindly invest in stocks in their chosen index and ignore the underlying fundamentals of these companies. This causes these companies prices to be bid up to prices that do not support their fundamentals (ie a bubble), and eventually history repeats, the bubble bursts and markets crash.

    What do we think?

    ETFs account for around 10% of US stocks’ market value and less than 1% in Australia. In the US at least this is not an immaterial amount. However, the active managers whom ETFs have taken business from generally have mandates which force them to invest a certain percentage in the market. As a result, active managers have always been investing in expensive markets and pushing up prices. Additionally, what is currently called by many analysis as expensive equity markets could also be attributed to global record low interest rates rather than an uptick in passive investing. In saying that, since the last major market crash (the 2008 GFC), the proportion of total assets in ETFs are considerably higher and continual growth of passive investing must be considered as a possible cause of markets becoming expensive.

    Recently we’ve seen Vaneck reweight their huge Junior Gold Miner’s ETF as they approached 20% limits in some of their smaller holdings. This meant selling out of these small gold miners which saw large falls in some of these shares (some of which was blamed on hedge funds looking to capitalise on the opportunity). This is a great example of the influence that ETFs can have, albeit this is at the small end of the market.

    Claim 2: ETFs will sell on mass and compound market falls

    One of the known weaknesses of a managed fund structure is the ability for investors to fairly easily redeem their funds, meaning at times of market falls, when a fund manager may find the best investment opportunities, the investors in the fund are panicking and redeeming their investments, meaning the fund manager becomes a forced seller rather than a buyer. This was one of the reasons Forager decided to turn their Australian Share Fund (FOR) into a Listed Investment Trust, where the pool of capital for them to invest was guaranteed.

    The one thing stopping simple redemption of managed funds during market crashes is another one of its weaknesses, which is managed funds are not simple to trade, and require the investor to apply to the fund to redeem units. This can involve filling out paper forms, and an apathetic investor may simply not be bothered.

    What do we think?

    One of the greatest advantages of ETFs is also one of its weaknesses when it comes to the above, with ETFs able to be traded on the ASX, a panicked investor simply has to log into their online brokerage account and hit the sell button. If a buyer does not exist on the other side of the trade, the ETF issuer is forced to then sell the underlying holdings which could very well begin a contagion effect.

    However, we come back to the size of the ETF market, at around 1% of the Australian market and 10% of the US market. Investors selling underlying stocks that they own through their broker will have the exact same impact as the reasonably small proportion of ETFs. We believe the actual impact of this event would be not materially higher than what currently exists.

    Claim 3: ETFS with low liquidity will be hard to sell if markets fall

    Peter Switzer recently spoke about a client who had received advice that an ETF with low liquidity would be difficult to sell if markets fall. The argument being that without a liquid market the seller would be unable to find a buyer on the other side of the trade and would need to sell at a significant discount.

    What do we think?

    One of the somewhat unknown components of ETFs is the role of the market maker. Essentially the market maker’s role is to provide liquidity to an ETF, so that if there is not an existing ETF unit on the other side of an ETF trade, the market maker must create an ETF unit for a buyer, or absorb an ETF unit for a seller. It is then the ETF issuer's role to buy or sell the underlying assets that the ETF holds. This means that regardless of an ETF’s liquidity, a market maker will always exist to buy an ETF off an investor even if the markets in free fall.

    However, there is a caveat to the above. Market makers make a profit by charging a spread between the buy price and the sell price of an ETF. The spread becomes the market maker’s profit margin. In a free falling market it may be difficult for the market maker to price the underlying investments forcing them to create a huge spread between the buy and sell price to protect their margins. This was seen in the 2015 Dow Jones ‘Flash Crash’, where some ETFs dropped 30% when the market makers were unable to price the underlying securities.

    Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40 - blurrypron.com

    Finally, an ETF is only ever as liquid as its underlying holdings. ETFs which invest in illiquid investments may have great liquidity, but if the underlying investments do not, this will likely be reflected in falls in both the underlying holdings and the ETF during market falls. This may be more likely to play out at the small cap end of the sharemarket and within unlisted asset classes.

    Claim 4: ‘Exotic’ ETFs are higher risk

    In a recent RBA publication, economist Michelle Cunningham discussed the risks faced with some of the more exotic ETFs, those that are classed as ‘synthetic’ ETFs, meaning the ETF issuer does not hold the underlying investments, rather they rely on a counterparty to pay the return. These ETFs are generally referred to as ‘Synthetic’ or ‘Hedge fund’ in their title. Cunningham raised the risk that the counterparty may default on their obligation, so an additional level of risk exists for the investor.

    What do we think?

    We agree with Cunningham’s analysis, an additional level of risk certainly exists with these ETF structures, however in many cases this is the only way to access to investment strategy that the ETF provides. Nevertheless, investors should be aware of the additional risks that exist.

    Conclusion

    There’s plenty of arguments in both camps about ETFs role in future market crashes. There’s no doubt the world has moved into uncharted territory with the rise of passive investing & ETFs in particular. We do believe, however, that some of the risks are overblow. Nevertheless, investors should be aware of these risks in order to make informed investing decisions. What do you think?

     

    Previous Article

    2017 Financial Year ETF and LIC Performance Table

    Next Article

    New Fixed Interest ETFs expand options for investors

    Leave a Reply
    Find a Fund
    Shoes Skechers Originals Memory 82 Hee - Wanderwool 19964 681 GRY Woman Memory Foam Grey High Hee 7ec3a40
    Athletic Shoes
    >
    ;