Never miss an update


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
Style: Tennis
Brand: Prince
Never miss an update


    Skechers Womens Shape Ups Accelerators Exercise Shoes, Silver/Blue, US 7.5Brooks Womens GTS 18 Blue Teal & White Running Athletic Hiking Boots Sz 5.5 Wide , Womens Nike Classic Cortez SE 902856-006 Metallic Pewter Brand New Size 10Ariat Unbridled Dixie - Brown - WomensNike Air Max Sequent 2 Women's Purple Earth/Dark Raisin 52465501 Sz. 5.5ASICS Women's GEL-Fit Sana 4 Training Shoe , Merrell Womens Barrado Shoe Red Rouge Size US9/UK6.5/EU40 $150New Merrell Women's Moab 2 Waterproof Hiking Trail 7 Aluminum Marlin J06018W , Man/Woman Drew Women's Roma Comfortable feeling online shop Popular tide shoesMBT, Women Rocker Athletic Shoes, Swiss Engineered, White,Grey and Pink,Size 6.5 , Nike Air Zoom Fearless Flyknit Womens Running Shoes White 850426 104 SIZE 8 - 10 , RARE Vans Vault Sk8 Hi Sherpa Fur Illusion Grey/White Sz 5.5 (Men) 7.5 (Wom) , NEW Free People Naples Slip On Sneakers In Pink Satin Size 40 , Propet Stability Walker Strap - Black - WomensWMNS Nike Free Run 2 EXT Canyon Grey TL TNT Mineral Teal Volt 536746-010 , Asics GT 2000 v 6 Size US 9 D WIDE Women's Running Shoes Blue T856N (D)W NIKE AIR HUARACHE RUN ULTRA PRM SZ: WMNS 5.5 (859511 400)Vince Camuto Quort Sneaker Size 11 (Suede) Retail MSRP $179 , Lacoste L 12 12 Bl 2 Caw - Black - Womens , Nike Flex Trainer 8 Gunsmoke/Metallic Silver Women Training Workout 2018 ALL NEW , Rag & Bone Sneakers 37.5 Suede Embroidered Standard Issue- NEW , Asics GEL Nimbus 19 Womens Sneaker Blue Purple/Violet/Airy Blue T750N Size 7ASICS GEL-Nimbus 19 - Black - Womens , Inov-8 Womens F-Lite 240 W X-Over Shoes 5054167195 Purple/Pink/Light Blue Size 6Nike Flyknit 1+ One Plus Pink Flash Fireberry Running Shoes Sneakers Womens 9.5Brooks Transcend 3 Running Shoes, Women's - Size 8.5 B, Teal/Purple , Puma Basket Platform 363314-04 Patent Leather Shoes WomenNew Under Armour Women's Lightning 2 Running Shoes - Size 8.5 - Black , Vans AUTHENTIC Moody Floral MEN'S SZ 4.5 Women's Size 6 ,
    Gentleman/Lady Gabor Heritage Womens Ankle Boots Not so expensive Preferred material Full range of specifications , Men's Belleville 551ST Sz 12W 12 Wide Coyote Hot Weather Steel Toe Boots Vibram , Brown The Art Company Boots 7.5 38NEW!! NIB! Gorgeous!! Aquatalia Camel Suede Ankle Booties Boots sz 10 $550Cat Caterpillar Founder P720916 EB mens brown sugar 2 ankle boots casual shoesGentlemen/Ladies Adidas Consortium X Limited Release Big clearance sale Modern design Quality and consumer firstMan/Woman Sneakers Hogan Interactive Fantasy Excellent value The highest quality material Various , Ladies Clarks Mid Heel Knee Length Long Boots Rosalyn ClaraRodo S7907 924 137 Sandals Women's Beige AU , New NAOT Yarrow Black nubuk tie sandal size 36 4.5/5USTOD’S Women's Tan Suede Fringe Slide On Flat Shoes Size 37MIU MIU Shoes 394071 Beige 36 , $886 AUTH NIB GIUSEPPE ZANOTTI Patent-leathe ankle strap sandals Sz 36Reebok Size 10 RUNNER MT White Grey Navy Pewter Running Sneakers New Mens Shoes , NEW SUPRA VAIDER KHAKI GUM 08044-228 SKATEBOARDING SHOES 9Adidas Dame 4 shoes sneakers basketball CQ1254 glow in the dark size 14.5 mens , Vintage LUSKEY'S OSTRICH LEATHER COWBOY BOOTS Men's size 12.5 MLOS ALTOS BLACK GENUINE STINGRAY ROWSTONE WESTERN COWBOY BOOT J-Toe EE 991105GOTCHA by Diesel Black & White Leather Fashion Sneakers Casual Shoes Men's Sz. 9 , Converse Men's Chuck Taylor All Star Shoes 143726C-192 White/Black 9.5 , Donald J Pliner Pazano Men's Linen Smoking Skull Loafer Dress ShoesMen's Black Brown Oxfords Block Dress Formal Loafer Slip On Weave Leather Shoes , Kensie Nolan Stud Women's Black Fashion Sneaker 6.5M , Skechers Performance Women's Go Walk 3 Reboot Walking Slip-On ShoeNike Air Max 90 EZ GS Running Kids Youth Womens Shoes Stardust Pink AH5212-600 , Nike M2K Tekno - Women's White O3108100NEW LADIES Black/Brown 1.5"Block Low Heel Long Sexy Over Knee Boots Size 7.5 , Caterpillar PAYTON Mid Calf Womens Casual Fashion Black Leather BootsNew Women's Dr. Martens Flora Chelsea Boot Shoe Black Smooth Leather MSRP $145 , PUMA Women's Suede Platform - Mono Satin - Choose SZ/color
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017

    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.


    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
    Athletic Shoes