Never miss an update

Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1

Never miss an update

Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1 -

    Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1
    Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1
    MERRELL WOMENS SANDALS TERRAN IVY POST BLACK SIZE 8G.I.L.I Monica Blush Snake Leather T-Strap Slide Wedge Sandal 9.5 NewGUESS SANDALS for Woman: Black: Gwodana .SIze 6.5 M: 3"+ Heels .Ankle strap: , Vionic Orthaheel Womens Park Rizzo Wedge Sandals Tan Leopard Shoe Size 7 MBirkenstock Granada Brown Leather Slide Sandal Size 39 Womens 8 Mens 6 , Vince Camuto Women's Rochela Wedge Sandal - Choose SZ/ColorTod's Tan Brown T Strap Leather Kitten Heel Sandals size 39 , Gentleman/Lady Lucky Brand Kalli Women's Sandals Tapenade excellent quality discount International big name , Skechers BOBS Women's Pop Ups-Scratch Summer Paddle Slide Multi Size 5.0Prada Womens Sandals Size 39.5 9.5 Black Pink Suede Slingbacks Wedge$450 JIMMY CHOO FLORAL PRINT WEDGE SANDALS , Women's Worishofer Comfort Slide On Sandal Red 251Sylish Summer Women T-strap Buckle Peep Toe High Heels Sandals Casual Shoes Size , Pre owned Animal print leather sling back Paolo Women Sandals size 7.5 MediumEasy Street Women's Dazzle Dress Sandal , COLE HAAN Air Camila SANDALS Shoes Womens 9 B Pink Leather Wedge HEEL New in Box , Cole Haan Size 7.5 M Air Hadley Leather Soft Gold Sandals New Womens ShoesVince Camuto new ankle strap sandals silver chain and rhinestones size 8M 38 EU , Teva Women's Original Universal Rope Suede Footbed Sandals Black Olive 1015169 7 , OLUKAI WOMENS SANDALS KULAPA KAI BLACK SIZE 10 , NEW KEEN ROSE CITY STRAPPY SANDALS WOMENS 6.5 BLACK 1014334 FREE SHIP , Anne Klein Womens Henrika Sandal- Pick SZ/Color. , Women's Shoes Sparkling Glitter Summer Comfort Sandals Size 10.5 US Wedge HeelWOMEN'S UNISEX SANDALS SNEAKERS CROCS RAINBOW BAND CLOG [205212 BLUE JEAN] , H New Womens Club Luxury Crystal Flip Flops Sandals Sequin Wedge heel PlatformECCO Women's Shape 35 Block Slingback Heeled Sanda - Choose SZ/colorSam Edelman F1979M1 Womens Peters Mule- Choose SZ/Color. , Sandal G by GUESS Shantel5 Black Glamour , Havaianas Women`s Flip Flops Slim Lux Sandal Black with Swarovski Crystals NWT ,
    Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1 ->Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1 -
    BEARPAW BOETIS WINE FURRY BOOT - SIZE 8 - NIBAzzedine Alaïa Booties Red Laser Cut Booties 7.5 , Adidas CF Advantage B74264 Mens Shoes Black White Leather Casual Tennis Sneakers , Adidas Originals Country Og Womens Trainers Sneakers Shoes S32204 , Hotter ’Jewel’ Bow Pump- Ruby JS45 60 , Marco Tozzi Two Buckle Straps Ankle Boot Womens Black Synthetic BootsNew Django & Juliette Zaiden Womens Shoes Casual Sandals Heeled , Cole Haan Women's 2.Zerogrand Laser Wing Dark Roast Leather 9.5 B USWomens Aetrex E730 Eliza Comfort Striped Oxford Black Women's Size 7.5 W , Martinez Valero I. Magnin Heel Brown Suade Slingback Woman's Heels Westin 8.5ROCCOBAROCCO Women's 100% Leather Mauve Heels Free Shipping Made Italy Brand NewMr/Ms Chinese Laundry Womens Greatest Complete specification range Impeccable Superb craftsmanship , Christian Louboutin Shoe Tan Strappy Toerless Muse New Size 40 , ALEXANDRE BIRMAN CORK WEDGE SANDAL SIZE 7LED Luminous Unisex Sneakers Glowing Leisure for Party Dancing Hip-hop Cycling EMENS OSIRIS REBOUND VULC SKATEBOARDING SHOES NIB HUIT SKULL ARMYMens pointy toe brogue wing tip rinding ankle boots chelsea heel leather shoes yDelli Aldo Men's Square Toe Dress Ankle Boots Shoes w/ Leather Lining M-606262Air Jordan Retro 11 Concord Size 10.5 White Black Dark Concord 378037-107 , Skechers USA Mens Ridge Oxford- Select SZ/Color. , Mens NEW 100% Authentic Kris Van Assche Leather Sneakers Size 45 - US12 RAREAdidas EQT ADV Racing Women Shoes Sneakers BZ0000 Energy Aqua White Size 11 NEW , NEW ADIDAS ALPHABOUNCE WOMENS RUNNING SHOES SNEAKERS WHITE GREY sizes 5 - 9.51612 Nike Wmns Dual Fusion TR Hit Mid Women's Basketball Shoes SZ 7- 852442-800 , AUTHENTIC adidas Originals Falcon Suede Core Black Pink Kylie Jenner Women size , Nike W Air Max 97 [917646-300] Women Casual Shoes Sequoia/Dark Stucco , WOMEN'S KOOLABURRA LOGAN BLACK SUEDE FAUX FUR LINED BOOTS SIZE 6 , VINTAGE90s DAN POST CP 3211 BROWN LEATHER COWBOY WESTERN BOOTS size 7.5 M MEXICOLA CANADIENNE Women's Size US 8.5M Knee High Black Suede Low Heel Boots A9Sbicca Women's Chandelier Boot - Choose SZ/Color ,
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1 -

    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.

    Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1 -

    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
    Steve Madden Womens Briele Briele Low Heel Mule Mule Heel Shoes 3e51eb1