Never miss an update

Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549

Never miss an update

Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549 -

    Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549
    Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549
    NIB $139 Rockport V74145 ASHLEY LEATHER MID Women's Comfort Leather Boots CHOSE , NIB STEVE MADDEN EMOTION TAUPE SUEDE OVER THE KNEE BOOTS HEELS SHOES SZ 6-10 , Gentle Souls ready 4 change Women's black slip on mid calf 1" heel boot size 6.5 , Donald Pliner Bela Women’s Design Zipper Ankle Boots Casual US Sz 8 MNine West Silver Boots Fashion Booties Womens Metallic Stretch Retro sz 6 New , Steve Madden Cynthia Black Suede Heel Ankle Booties Size 6.5 , Justin Womens Cowhide Stampede LEATHER BROWN Western Boot L2561 Size 6.5 B , Jessica Simpson womens cherrell ankle bootie size 6 , ASH Women’s Booties Engineer Motorcycle Ankle Boots Euro 40 US 9 , Womens Yadiro Black Metallic Leather Cowboy Boots 8.5 B Unworn Excllent CondNEW STEVE MADDEN ENVOKE BLACK OVER THE KNEE BOOTS 7.5MBOSS HUGO BOSS Women’s Black Leather Biker Boots Size 40 , Reebok Work Women's All Terrain Work RB095 Steel Toe Work Shoe Black/Teal-11WSteve Madden Women's Slammin Over The Knee Boot -Size 7HARLEY DAVIDSON WOMEN'S (9 1/2) MOTORCYCLE RIDING BOOTSNEW WOMEN'S CRUSH BY DURANGO UNDERLAY BOOT (DRD0066) BROWN BLACK 8 WIDE $195 , Via Spiga "Cosette" Black Leather Knee High Riding Boot Women Size 6 MClarks Women's Araya Turner Closed Toe Ankle Fashion Boots, Black Combi 26121254NIB COCONUTS BY MATISSE BLACK BUTCH BOOTIE BOOTS SUEDE & LEATHER COMBO 9 or 10 , Men's/Women's women boots Beautiful color Bright colors Tide shoes list , Gentlemen/Ladies TARYN ROSE LADIES-SZ-9M-"DARLA" STRETCH NAPPA GREY durable King of quantity A balance between toughness and hardness , Vince Camuto Womens Fredrica Quilted Wide Calf Knee High Pull On Riding BootsBEBE Two-Tone Bootie/Ankle Boot, Sz 8 ($175 new) , Womens 9 M Dan Post El Paso USA Made Black Leather Cowboy Western Riding Boots , Kensie Girl Tundra Knee High Boot 10 M Black New with BoxReba Size 9 Black Suede Leather Boots New Womens Shoes , Circa Joan & David Helena Ankle Boot 6.5 M Cognac New With Box , Sam Edelman "Loren" Saddle Brown Leather Knee High Riding Boot Women Size 6.5 M , Alfani Mable Tall Riding Boots Dark Brown New in Box ,
    Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549 ->Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549 -
    Man's/Woman's NEW HOGAN WOMENS ANKLE BOOTS Louis, elaborate King of quantity Selling new products , Lanvin Black Leather Block Heel Boots, Size 36NEW Dolce & Gabbana Nude Pace Peep-Toe Booties (Size 40) - MSRP $1,095.00!WOMEN SHOES DESIGNER MAROON/RED LEATHER ANKLE BOOTS FLAT HEEL MARTEN MILITARY , Womens MEPHISTO "Nature is Future" Dark Brown Leather Mules Sz. 7New Edmundo Castillo Gold , Metallic Leather Open toe D'Orsay Pumps Size 9- 9/5 , Report MAZAMA Womens Mazama Wedge Sandal- Choose SZ/Color. , Puma Cell Surin 2 Premium Shoes Mens size 10 Black Gold * NEW athletic SneakerNike Jordan Dominate Pro 2, Sport Blue / Infrared 23 / Wolf Grey, Size 11.5Nike Air Max 90 Premium SE 858954-001 Black Dark Grey Running Shoes Men’s Sz 9.5NEW 100% AUTHENTIC Air Jordan 1 Mid 'Yellow/Black' 554724-071 MEN SZ 9 VERY RAREPolo Ralph Lauren Casual Fashion Hugh SK VLC Gray Black Mens Shoes Sneakers 7.5Emporio Armani Charcoal Grey Patent Chukka Boots US 10.5 , VANS VAULT SK8 HI 38 DECON LX ROBERT WILLIAMS VN0A2Y2YKCA FLAMING DS SIZE: 10.5Ben Sherman Men's Birk Plain Toe Oxford - Choose SZ/Color , vintage mens casual slip on leather shoes pumps loafers driving oxfords shoes USMan/Woman Born Allan Mens Natural Loafers Guarantee quality and quantity New products in 2018 Breathable shoes , Fila 5SR21117 Womens Forward 3 Running Shoe- Choose SZ/Color.Nina Women's Raeni Strappy Sandal Beige Glitter Heeled SandalsNew Women's UA Under Armour Horizon RTT Trail Running Sneakers - 1287338-410Nike Women's Free Training 8 LM GREY/MAUVE-VAST Training Shoes AH8803-002 , Nike Air Max 270 Flyknit Womens AH6803-301 Igloo Emerald Running Shoes Size 9.5Womens Open Toe Cut Out Roma Gladitor Knee High Sandal Boots Chunky Heels Shoes , Roxy Women's Cerys Gladiator Sandal - Choose SZ/colorLuichiny Really Mine Almond Beige 6" Stiletto Heel Platform Knee Boot 6-10Vince Camuto Mordona Knee-High Boots F68, Bourbon, 5.5 US , Lucky Brand Women's BEIGE Ankle Boots Suede Size 7M Western StitchBar III Womens Grand Black Over-The-Knee Boots Shoes 10 Medium (B,M) BHFO 4396Womens Embroider Suede High Heels Over The Knee THigh High Boots Shoes Pumps NewEurope Over the Knee Round Toe Women's Low Heel Rhinestones Side Zip Boots Sz 8
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549 -

    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.

    Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549 -

    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.


    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
    Medicus 29991 Womens Maxi Leather Leather Heeled Ankle Boot Shoes Shoes d5d0549