Never miss an update

Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8




Never miss an update

Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8 - blurrypron.com

    Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8
    Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8
    Women boots leather model FADHIL Aus 2 to 10.5Women shoes boots leather model LOREN Aus 2 to 10.5 , NEW JEFFREY CAMPBELL OASIS RH Ankle Boot BlackNEW Tory Burch knee high calf leather boots , Women's boots suede model PEARCY Aus 2 to 10.5Women shoes boots leather model CHADIE Aus 2 to 10.5Le Chameau Giverny Womens Green Rubber Wellington Boots - 41 EU18cm 10 keys Lockable Beginner Ballet Wedge Boot Hoof Heelless Fetish Light Pink , Women boots leather model ALIANA Aus 2 to 10.5Women boots leather model SARAH Aus 2 to 10.5Womens Office Kirby Smart Block Heel Knee Boots TAN LEATHER BootsWomen shoes boots leather model KEIKO Aus 2 to 10.5 , camel leather shoe BOOTS designer style slim heels white elastic sides uk5 bnib , Womens Ladies New Rock Boots Sexy Goth Punk Heel Fashion LeatherM.7981-C118cm LOCKY Beginner Lockable Ballet Wedge Boots Hoof Heelless Fetish Pinup White , Laura Vita Anna 128 Womens Khaki Multicolour Suede & Fabric Ankle BootsJackal Milano ANKLE BOOT Jackal Milano Turtle dove color mod. JL72337 , Fabio Rusconi LUNA747 Grey Ankle Boot - New in Box , CELINE women shoes Soft Ballerina Napa Stretch black boot side short zipNew in Box Bruno Magli Ladies Boots Blader in Dark Brown Suede , Le Chameau Giverny Womens Green Rubber Wellington Boots - 38 EU , Camper Peu Cami Hi Womens Black Blue Leather Boots - 38 EUWomen Boots Leather model CHARLOT by HGilliane Design Aus 2 to 10.5 , Laura Vita Eva 01 Womens Black Green Leather Boots , Dr Martens Doc 14-Hole 1B99 Vonda Zip 12761001 The Original18cm LOCKY Beginner Lockable Ballet Wedge Boots Hoof Sole Heelless Fetish PinupDr Martens Doc 8-Hole 1460 Pascal Shiraz 13512602 The OriginalFontana 2.0 Shoes Women Boots Brown 83325 moda1 ORIGINAL , Dr. Martens Womens Boots Black Backhand 1460 Chris Lambert UK Leather Shoes ,
    Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8 - blurrypron.com>Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8 - blurrypron.com
    Eileen Fisher Women's Ely-Lt Dress Sandal, Carbon, 6 M USRACHEL COMEY Leather Boots Knee High Brown SZ 8.5 Anthropologie $550Man/Woman Ariat Women's Heritage Western R Toe Every item described is available new Suitable for colorNEW MENS ASICS KINSEI 6 RUNNING / TRAINING SHOES - LAST ONE IN STOCK , Original SAS Easier Black 0128-013 M Medium WomenSt. john maroon/blk patent leather pumps (10)NIB Christian Louboutin So Kate 120 Orange Sunset Suede Classic Heel Pump 41.5 , VICTORIAS SECRET PINK GLITTER SPARKLE SLIDES /FLIP FLOPS CHOICE NWTALEGRIA LEATHER ADJUSTABLE BLUE SLIDE SANDALS CAMILLE 38 STORE DISPLAYAIR JORDAN CP3.IX CP3 9 810868 406 SOAR BLUE/INFRARED 23-MIDNIGHT NAVY-COPA BLUE , Nike Air Max 90 Ultra SE Men SZ 7.5 - 10.5 Hasta , Adidas ORIGINALS MEN'S EQT SUPPORT ADV BY9582 WHITE/GREY - BRAND NEW Without box , Nike AF1 Foamposite Pro Cup AJ3664 600 Coral Stardust Men SZ 7.5 - 13 , Sold out domestic regular "NIKE" AIR VAPORMAX FLYKNIT P from japan (4788NIB Dr. Martens Mens Oakford Casual Chelsea Boot Dark Brown Grizzy Leather , Polo Ralph Lauren Vaughn Sk VLC Glacier Canvas MLTRY GRN 10D , SESTO MEUCCI HADARA TMORO LEGEND SIZE 7 EUCNew Alegria Womens Kimi Dizzy Doo Fashion SneakerNIKE WOMEN'S ROSHE 2 TWO FLYKNIT RUNNING TRAINING SHOES 844929 005 US 8.5New Nike Air Max Thea Women's Shoes Black/Summit White 599409-020 Multiple Sizes , New Balance Women's 574 Sport Decon Shoes White , Merrell Women's Emma LTR Fashion Sneaker, Black, Size 6.5 , Adidas Performance Women's Supernova Glide 8 W Running Shoe Size 6 New , Nike Vapormax Flyknit 2.0 Ultramarine Hot Punch Grey Pink 942843-104 Women's , NWT Authentic ZARA COLLECTION Black Studded Leather/Fabric Booties / US 9INC International Concepts Womens NWB Maia Brn Espresso Boots Shoes 9.5 MED NEWvintage Frye Womens Boots Knee-High US 6/6.5 M Brown Leather Pull On Heels USAwomen's Italian Massimo Baldi brown suede genuine fur topped boots sz 9 1/2!Charles David Women's Flounce Brown Leather Boot Sz 8.5 Free Shipping 60% OffSTEVE MADDEN PATCHIE BLACK MULTI ANKLE BOOT SZ 6 ,
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8 - 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.

    Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8 - 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
    Dr Martens Doc sanfrancisco-11418 11416 8-Hole The 1460 Purple 11821500 The Original af476c8
    Boots
    >
    ;