Never miss an update

Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a




Never miss an update

Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a - blurrypron.com

    Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a
    Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a
    Mens Fashion Brogue Wing Tip Carved Leather Shoes Youth Business Oxford ShoesDR MARTENS CALLUM GRAPHITE GREY WASHED CANVASMens Males Outdoor Fashion Sneakers Casual Gentle Slip-on Shoes Navy 4549_RC , Mens Fashion Slip On Mens Driving Leather Loafers Casual Shoes Moccasin US SizeOccident Chic Design Leopard grain Loafers Men's British Slip On Leather Shoe sp , Mens Slip On Loafters Gommino Hollow Out Slipper Sandals Shoes New Slides Mules , Rivet Mens Embroidery Driving Slip On Loafer Floral Oxford Shoes Pull On Sbox , 100% Genuine Cow Leather Slippers Mules Casual Slip On Business Dress Shoes Sz , 2 Ways Mens Loafers Leather Slip On Leisure Driving Shoes Flats Casual Fashion , Mens Males Dandy Fashion Sneakers Casual Slip-on Shoes Brown Navy Gray 4501_0C , Mens Slip On Loafers Gold Printing Leather Clubwear Business Retro Shoes Plus szMen's Slip On Loafers Commino Casual Driving Moccasins Retro British Shoes Flats , ZARA MAN BLACK THREE-BUCKLE SNEAKERS 39-45 REF.5321/302 , Mens Pointy Toe Farmal Dress Wedding Party Flat Shoes Hollow Out Business Summer , Propet M3705 Mens Dual Strap Walking Shoe,Black 7 1/2 XX ( EEEEE ) , New Summer Beach Men Europe Punk Rivet Real Leather Sandals Slipper Flat Shoes , Rockport Luxury CruIse Venitian Leather Driving Moccasins Loafers Sz 11.5Propet M3704 Mens Lite Walking Shoe,Bone size 11 1/2 X [EEE ] , Mens Males Outdoor Fashion Sneakers Casual Gentle Slip-on Shoes Brown 4549_A0 , TAYGRA High Top Shoe Vegan Recycled Flexible Ethical Handmade Sneakers Eco New , Propet M3704 Mens Lite Walking Shoe, White Size 7 M (D) , Men Basketball Shoes Athletic Sneakers Fashion Outdoor High Top Sport Board US12VIRAL CASUAL WORK SHOES - Safety Shoes - 9 sizes - 3 colorsPersonality UK Men Dress Shoes Rhinestones Nightclub Hairstylist Pointied Toe szMens Pointed Toe Slip On Loafters Shoes Clubwear British Style Glossy Shoes Sz , Mens Males Outdoor Fashion Sneakers Casual Gentle Slip-on Shoes Brown 4706_Ig , Men's roma gladiator sandal hollow genuine leather casual shoes ankle bootsNew fashion men's slip on loafers punk suede rivet studded casual dress shoesMen's Shoes Flats Round Toe Casual Shoes Snakeskin British Style Simple Shoes NW ,
    Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a - blurrypron.com>Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a - blurrypron.com
    Hummel Womens Slimmer Stadil HB HIGH Hi-Top Trainers, Grey Alloy 1100, 4NIKE MAN SNEAKER SHOES CASUAL FREE TIME CODE 35491 181 DART VII , Kennel und Schmenger Schuhmanufaktur Womens Big Low-Top Blue Size 7 UK , NIB $930 Y's By Yohji Yamamoto Side Zipper Low Oxfords US 8.5 (SIZE 5 ) , LARTISTE CHINO-B - CHINO Size: - Color:Man/Woman AnyWear Women's Zone Black Comfort Shoes quality Trendy Explosive good goods , Man's/Woman's Funtasma Women's Lust 3000 Practical and economical Let our goods go to the world Export , Badgley Mischka Ivory Satin Embellished Heel Pump Size 6D 1676/Banana Republic Veronica Pumps Shoes Suede Leather Fire Coral Peach NIB Size 7 , Calvin Klein Womens NWOB Gracen Patent Lizard Pale Pink Heels Shoes 9.5 M NEW , Women's Shoes Marc Ellis Black Mid-Heeled Sandal Spring Summer 2018New MANOLO BLAHNIK SEDARABY BIJ 105 GOLD Metallic Jeweled Wedding SHOES 37 38Man/Woman Giuseppe Zanotti Easy to use At a lower price Tide shoes list , Women's NEW BALANCE Trail Running Shoes Size 9 ( WT474LB)adidas Men's Questar Ride Running Shoe, DB1346 Black/White/Carbon Size 10 NewFila Men's Original Tennis Triple White Leather , Adidas Alphabounce Zip KITH Crystal White DA9707 Men's SZ 9 , Rockport Men's Classic Loafer Lite Venetian Cognac Leather , Common Projects Achilles Perforated Nubuck Grey Sneakers Shoes Size 41 EU/ 8 US , 2006 Nike Air Jordan XXI 21 Italian Red Suede Ferrari Toro 4 5 14 Size 9 RARE , Nike Air Presto x Off-White Virgil Abloh BlackPropet Hugh - Men's Casual Slip-On Leather Shoe - All Colors - All SizesDr. Martens Men's Dante Brando Oxford - Choose SZ/Color , Reebok Womens Size 9.5 Club C 85 Leather Moondust Retro Casual Shoes Sneakers , Man/Woman GEL MISSION 3 NOIR Comfortable feeling Price reduction Great choice , AHNU WOMEN MONTARA WP MIDNIGHT BLUE HIKING SHOE US 7 / / NEW , Women's Brooks Launch 5 Running Shoes Black/Purple/Print 1202661B 090Square Toe Chunky Heels Leather Autumn Womens Chic High Top Ankle Boots shoes Sz , womens vogue pointy toe fur trim suede back zip low heel block rhinestone boots , Womens Riding Wing Tip Brogue Tassle Buckle Ankle Boots Leather Casual Shoes New
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a - 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.

    Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a - 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
    Mens Mens Males Dandy Loafer Fashion Sneakers 4610_IC Casual Slip-on Shoes Brown Brown 4610_IC 71b414a
    Casual Shoes
    >
    ;