Never miss an update

PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49

Never miss an update

PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49 -

    PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49
    PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49
    Clarks Men's Cotrell Step Slip-on Loafer,Black Oily,7 M US , Cole Haan Bragano SIZE 10 Mens Brown English Calf Leather Luxury Italian Loafers , Mens Shoes For Crews Black Slip Oil Resistant Vegan Work Sneaker SFC Mozo 10 43Dr. Martens Mens 14 M Edison Slip-On Leather Cherry Red Tassel Loafers Shoes , Dr Comfort Scott Brown Leather Moc Toe Hook Loop Comfort Walking Shoe Men 11 WGentlemen/Ladies Dr. Martens Oxford Shoes Elegant appearance a good reputation in the world Export , Puma Basket Classics Shoes Eco Ortholite White Tan 9 Casual New , Skechers Flex Advantage Sr Mcallen Slip On Shoe Wide Width Mens Work And , Donald J Pliner Men's MINCH-8335 Tan Suede Horsebit Dress Loafers Sz 12M P102Rockport Reserve Mens Leather Tie Shoes Brown Black 8 ~~Lot of 2 Pairs~~ , Sperry STS10405: MensTop-Sider Authentic Original 2-Eye Boat Navy ShoesRockport Men's Aiden Penny Driving Style Loafer Blue Size 14 M US , Dr. Martens Mens 3989 Brogue Oxford Shoe Brown Aztec UK4/USM5/USL6 , ZARA MAN BLACK EMBOSSED SNEAKERS SHOES 39-47 REF.5203/302HillSide Mens Sneakers Slip On SN5 ESC Blue Sashiko Size 12 (Run big so 12.5-13) , Florsheim Designer Collection White Leather Wingtip Tassel Loafers Sz 9D , Polo Ralph Lauren Mens Vaughn Green Fashion Sneakers Sz 11 , NIB $80 Converse Jack Purcell LTT Ox Malt/Egret 159190C US Mens 11Supra Skytop HF White Leather Skate High Top Shoes White Vulcanized Sole Size 12 , Merrell Moab 2 Waterproof Beluga Mens Shoes J06029 SZ 11 M Vibram $120 , Keen Glenhaven Mid Casual Shoes - Men's Size 10.5 - Black , Rockport Black Leather Walking Shoes 11.5 M Men Sneaker MWT18 World Tour ClassicSkechers USA Mens Elment Brencen Slip-On Loafer- Select SZ/Color.Vans Classic Black Canvas Unisex Slip-on Trainers Shoes , Johnston & Murphy Tan Woven Penny Loafers - 8.5M European 42 EUCMezlan Woven Brown Leather Beige Canvas Croc Skin Dress Oxford Shoe Men's 9 M , Skechers Men's Memory Foam Expected Avillo Relaxed-Fit Slip-On Loafer,7 D(M)US , Vans Men's Shoes Anaheim Factory Slip-On 98 DX Black/White NIB Size 11 , Camper Pelotas Persil Vulcanizado - K100060 Sneakers Shoes Size US 6, NWT ,
    PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49 ->PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49 -
    Roberto Cavalli Black Suede Leather Platform Ankle Boot Metallic mirror Heel 37 , Romika Women's Banja 15 Ankle Bootie, Moro, 38 EU/7-7.5 M USBos & Co Hillory Waterproof Snow Boots Espresso / Wood Brown NEW WITH BOX!Nike Mens Mercurial Vortex FG Football Boots US SizesWmns Nike Zoom Winflo 4 IV Noise Aqua Blue Women Running Shoe Sneaker 898485-403 , NEW NIKE WOMENS ZOOM PEGASUS 31 QS RUNNING SHOESTory Burch Stella Oxfords Olive Green 9.5 MediumAlegria Carina Tan Faux Cork Thong Sandals SZ 8 - 8.5Men/Women Guess Red High Heel Sandals Modern and elegant fashion stable quality Elegant and robust menuPleaser Women's Divine 440 Black Patent HeelsWomen's Rhinestone Strappy Open Toe High Heels Sandals Stilettos Wedding Shoes , TITTI DELL'ACQUA Moro Brown Alligator Skin d'Orsay Heels Pumps 37.5 , Arche Eylis low heel pumps size 37.5 us 7 BRAND NEW , Reef Women's Dreams II Flip Flop Brown Thong Sandals , Himalayan Cat Christmas Print Running Shoes For Women-Free ShippingNike Lunar Lux TR Women's Training Shoe 749183 100 Size 12 , (932687-401) MEN'S AIR JORDAN JUMPMAN PRO QUICK MIDNIGHT NAVY/BLACK/WHITEAir Jordan Retro 6 "Sport Blue" Size 10.5LOS ALTOS BROWN TEJU LIZARD WESTERN COWBOY BIKER MOTORCYCLE BOOT D , Salomon Men's Kaïpo CS Waterproof 2 Snow Boot - Choose SZ/Color , Carhartt Men's 8.5 CMX4023 4" LTWT PT Moc Toe Wedge Work Boot Casual 4023Stacy Adams Men's Mandell-Moc Toe Bit Slip-on Loafer, Oxblood Suede, Size 14 M , Stacy Adams Mens Shoes Loafers US 13 M Brown Leather Monk Strap Buckle dressMen's Shoes Premiata Zaczac 3545 Multicolored Sneaker Fall Winter 2019 , CONVERSE ALL STAR LUX Womens 6 Plum Purple Mid Top Wedge Sneakers - 551618CBaskets à cothurnes model 62043 Inello - Matter - Shoes , NIKE Air Zoom Fearless Flyknit Sz 9 Womens Cross Training Cool Grey/White-Pol... , NINE WEST 25021723 OLEARTO WOMEN'S BLACK BOOT , Sexy Women Ladies Platform High Heels Tassels Knee High Boots Large Size 8 9 10 , Sz 10M Women's Sam Edelman Tan Suede Darrah 2 Faux Fur Padded Ankle Boots XLNT
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49 -

    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.

    PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49 -

    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
    PONY Product Of New York Shoes Houston Men's 0710016-m43 Shoes Cream York Mono 0710016-m43 bff5e49
    Athletic Shoes