Never miss an update

Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20

Never miss an update

Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20 -

    Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20
    Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20
    Men's Nike Lebron James Basketball shoes Size 7 from heel to toe 11" , Puma Evo Power Vigor Mens Blue Synthetic Athletic Soccer Cleats Shoes , $85.00 Reebok Men Club C 85 SO white light heather solid grey vital blue primal , ONEMIX Men's Performance Basketball Shoes Classic Gym Outdoor High Top Sneakers , adidas Speed Trainer 3.0 Shoe - Men's Baseball SKU Q16546 Size 7Nike Air Force 1 Men's Navy Suede Marble Swoosh Sneaker Shoes Size 9New Balance 597 NB NB597 men lifestyle casual sneakers NEW navy white ML597-VAB , ROCKPORT PROWALKER K71098 MEN'S WHITE LEATHER SNEAKER sz 9XW, 9.5XW(EX-Wide)2008 Nike Dunk High – NBA Pack – Phoenix Suns Size 13 , Nike MEN'S Free Run FLYKNIT OC Multi-Color SIZE 11 BRAND NEWAdidas Adizero 5-Star 5.0 Uncaged Bulldog Football Cleats B49351 Sz 12 NEW $120 , Jordan Men's Trunner LX Training Shoes GG8 Black/Anthracite 897992-021 Size 10K-Swiss Mens Arvee 1.5 Tech Trainers Low Retro Style Iconic Athletic Shoes Blue , NEW BALANCE 572 SZ 8.5 ELITE EDITION MRT572GY HALLOWEEN PACK GREY YELLOW BLACKNIKE ZOOM MERCURIAL XI FK FLYKNIT MENS SNEAKERS UNIVERSITY RED 844626 600 , New Men New Balance Speed Vazee Rush v2 Protect Pack Shoes MRUSHPJ2 Size 9--12.NIKE AIR MAX TORCH 4 White Anthracite Grey 343846-100 . men's 9.5 / women's 11 , Adidas Adizero HJ Men Size 12 Athletic Field Shoes Spikes AF5645 Blue/GreenNike Mens Hyperdunk Basketball Shoes 2016 Black White 856483-100 Size 18 , New! Mens New Balance M560cp7 Running Shoes Size 17 D Medium , Mens NikeLab Dunk Lux Low Arctic Orange White 857587-800 sz 10 NO BOX TOP , NIKE HYPERVENOMX FINALE II STREET MEN’S TURF SOCCER SHOES 749888-700 $100 , Adidas Harden Vol. 1 Size 6 Pioneer Black White Red BW0630 Boost Men's New , MANS SHOES NIKE DOWNSHIFTER 8 - 908984-401 , Nike Mariah Flyknit Racer Sz 11 918264-300 running shoe Green Abyss Cirrus BlueNike FREE TRAIN VIRTUE Pure Platinum/Ghost Green Men's Training Shoes 9.5 , NIB MENS SIZE 8 ADIDAS EQT SUPPORT ADV RUNNING SNEAKERS BB1296Nike Men's Air Flight Huarache Low Basketball ShoeOsiris Nyc 83 Size 5.5 US Men’s Red Gold Black BMX DC Skate Shoes Sneakers ,
    Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20 ->Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20 -
    Women's Cole Haan Tali Luxe Wedge Boots, STORMCLOUD, Size:7 1/2 B , New $298 Jack Rogers Mercer II Black/Blue Leather Riding/Tall Boot sz 8 , Naot Tellin Boot - NIB - Free Shipping , Man/Woman Willow Heels Size 39 Cream Strappy Complete specification Various types and styles Speed ​​refundMen's/Women's Pin Up Couture SECRET-12 Quality queen Stylish and charming Exquisite (processing) processing , CLARKS Women's Caddell Denali Slip-On Loafer - Choose SZ/ColorSnapdragon Needle Point Poinsettia Backless Flats Slides Slip Ons US Size 9 (D1) , Anne Klein Women's Kamy Flat Black Velvet Business ShoesPleaser 5" black shiny satin ribbon platform sandals , Pleaser MOON-701TG Women's Clear Black Silver Cut-Out Platform Slip On Sandals , Designer Pierre Hardy Pink Gold/Bronze Watersnake Cut Out Sandal , Womens Crystal Slip On Thong T-Strap Block Heel Flip Flops Sandals Shoes Size , NIB Authentic $190 PUMA FIERCE METALLIC Black Athletic Shoes Size 9 M , Payntr Men's Cricket Shoe white Breathable Lightweight US 13 () - Rare!!Nike Air Force 1 Mid '07 Grove Green/Black Men's Shoes 315123-303 , adidas Men's Superstar, CORE NAVY/FOOTWEAR WHITE, 10.5 M USadidas Predator Tango 18.1 Trainers Men New Black Lifestyle Sneakers DB2062AIR JORDAN FUTURE PREMIUM 652141-023 BLACK INFRARED 23 NEW SIZE 8 , Off White X Nike Air Presto Size 11 100% Aithentic , Adidas Originals NMD R1 Reflective Core Black S31505 Size 11.5/12.5Skechers for Work Men's Holdredge Rebem Work BootBlack/Charcoal12 M USHot Punk Men's Knee Boots Combat Military Faux Leather Jockey US6-10.5 Black ** , Ariat Mens Sz 11.5D Cascade 8" Cowboy Western Work Boot Distressed Brown 37127 , visvim Men's Shoes 518983 Brown 10Tommy Bahama Men Natural Elliot Light Brown Suede Wingtips sz 9.5M USRockport Men's Colben Oxford, Brown, 10 M New in Box V82368Avia "A5305" Running Shoes 7 M Black Fabric Upper New without BoxNWT Women's Clarks Cloudsteppers Sillian Sway Ankle Boots Choose Size Gray , Walking Cradles Women's Heist Brown Matte Snake Print 7.5 N AGentlemen/Ladies ☼ELEN☼ Bottines - ERYNN- Ref: 0860 High quality and cheap International choice List of explosions ,
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20 -

    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.

    Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20 -

    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
    Etnies Footwear Skate Etnies Shoes - Jameson XT- Skateboarding Trainers 29931 Footwear Julian Davidson e31bc20
    Athletic Shoes