Never miss an update

75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df

Item specifics

New with box: A brand-new, unused, and unworn item (including handmade items) in the original packaging (such as ... Read moreabout the condition
Brand: Mercanti Fiorentini
Material: Leather Style: Loafers & Slip Ons
Color: Brown Width: Medium (D, M)
Country/Region of Manufacture: Italy
Never miss an update

75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df -

    75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df
    75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df
    Moratti Yatch Blue Bit Loafer Rubber Sole Leather Mens Dress Shoes Size 10Mens Clarks Closed Toe Sandals 'Wave Breeze' , Polo Ralph Lauren 816615292001 Mens Halford Ripstop Fashion SneakerD , Clarks Originals Brayer Sport Moccasin Taupe Suede Leather Mens 63260 1705-04ALDO Men's Delsanto-r Fashion Sneaker - Choose SZ/Color , Cole Haan Air Delancy Shawl Men's Slip-on Leather Loafer Shoes $200 NEW 9 D , Tommy Bahama Men's Pergola Sz US 11 D Brown Suede Drivers Loafers Shoes $170.00 , Clarks Originals Padmore Brown Suede Gum Bottom Mens Casual Shoes 78732 1704-92Tommy Bahama On Par Spectator Woven Boat ShoeNew Balance M990DVN2 Tawny Brown Tan 990 Mens Size 5.5 , Dr.Martens Gilmer Black Mens Leather Derby ShoesNEW Vans x Marvel Authentic Marvel Women Black & White Skate ShoesInvicta Mens Specialty Quartz Stainless Steel and Leather Casual Watch,NEW JOHN VARVATOS USA BEDFORD TROOPER HIGH TOP LEATHER SNEAKERS 11.5Skechers 65245 Mens Garton Briar Slip-on Loafer- Choose SZ/Color. , Converse Chuck Taylor All Star Modern Hi Mens Size 9.5 Suede Shoes Sneakers GreyClarks 26131557 CLARKS Mens Conwell Plain Oxford- Choose SZ/Color.Clarks 'Gabson Step' Mens Black Leather Slip On Shoes , New Red Wing Men's Steel Toe Safety 4408 Oxford work shoes sz 7.5E3 made USAMens Loafers Pull on Sandal Suede Tassels Pointy Toe Fashion Breathable Date newClarks Men's Clarkdale Moon US 13 M Black Suede Plain Toe Oxfords Shoes $160.00Ecco Kallum Men's white leather perforated fashion sneakers sz. 45MONCLEAR Mens Leather/Suede Sneakers, Black, US 8Mens genuine leather driving shoes slip on rivet fashion loafers British Chz18 , Asics Gel Kayano Trainer Knit "Black Cherry Tomato" (US11) New air ultra maxNEW adidas Climaheat Rocket Boost CH M B24469 Mens Shoes Trainers Sneakers SALETrue Religion HEX V1 High Top Leather Sneaker shoes Men Sz 12 (New Without Box) , New JOHN VARVATOS Star USA Hattan Leather Mens Low Top Sneakers Shoes 10.5 $248New CONVERSE ONE STAR OX 161240C Suede GREEN/WHITE/BLACK Mens Womens c1 ,
    75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df ->75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df -
    AD475 ANGELO BERVICATO shoes black leather women ankle bootsSkechers Performance Women's Go Golf Elite Canvas - Choose SZ/color , LN $398 Anthropologie Schuler & Sons Philadelphia Brown Leather Boots 7.5 BSaint Laurent Niki Crystal Embellished Mesh Boots Booties Black 39 8.5 $2895 NEW , Womens Ladies New Rock Boots Sexy Goth Punk Heel Fashion LeatherM.7943-C10Bates Women's Leather Uniform Shoe,Black,5.5 EEW US , Arcopedico Women's Shawna Green Leather Mary Jane Flats US 10.5 Good Shape , Women's 8 1/2 Aldo Black Open Toe Heels , Zara Womens Shoes 6 Black Court Shoes Bow Nwt , Gentlemen/Ladies NEW GAIMO WOMENS ESPADRILLES High quality and low overhead buy Excellent stretchingPleaser INFINITY-930LG Women's Gold Glitter Heels Platform Criss-Cross SandalsMOT-CLe 600w Black Leather Deep Vamp Pointy Pumps Heel Shoes 37 / US 7 , LADIES BURBERRY LEATHER SNAKE SKIN BALLERINA FLAT SHOES SIZE 39Men's/Women's brunello cucinelli shoes women 36/6 Practical and economical Elegant style Modern and elegantVANS Ludlow (Military) Bungee Leather Skate Shoes MEN'S 7 WOMEN'S 8.5 , Adidas Originals Gazelle Ice Mint Green White Gold BB5473 Mens Size 11 , NIKE ROSHERUN NM BR LIGHT WHITE VOLT ROSHE BREEZE RUNNING 644425 402 SIZE 9 , Saucony ISO FIT TRIUMPH Men's Running shoes Blue, Size 9, UK8, EUR42.5 , NIKE AIR PYTHON PREMIUM WHITE MEN Size: 8.0 NEW RARE AUTHENTICDunham Men's 8000 Ubal Sneaker Grey Leather , NIB Authentic POLO RALPH LAUREN Men's Hillingdon Boots in Olive, Size 11D , COLE HAAN Great Jones PLN II 2 size 9 M Shoes Mens Oxford Tan SuedePRADA MENS BLACK LEATHER APRON TOE HORSE BIT LOAFERS SIZE 9.5 ITALY 2083 , FLORSHEIM WHITE IVORY LEATHER SLIP ON IMPERIAL SHOES 9 D , Allen Edmonds Park Avenue Cap Toe Oxford Dress Shoes Mens 11 D BlackRockport Men's Style Crew Bike Ox Oxford - Choose SZ/ColorSkechers Womens Ultra Flex - Free Spirits 12846 PUR , New Balance 940 Running Shoes, Women's Size 9 D, BlackWOMENS REEBOK CL LEATHER SEA-WORN in colors GABLE GREY / WHITE SIZE 7adidas Pure Boost X All Terrain Women's Ice Purple/Vapour Grey/Ice Mint AQ3396 ,
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df -

    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.

    75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df -

    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
    75% OFF NEW MERCANTI FIORENTINI Bamboo Bit Loafer MERCANTI Tan 23918 8 sz 8 $295 92990df
    Casual Shoes