Never miss an update

Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5




Never miss an update

Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5 - blurrypron.com

    Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5
    Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5
    Bucketfeet 'Pineappleade' Slip On Canvas Tennis Shoes Sneakers Black Gold 5 NEW! , Fila Size 7 Black Memory Foam Breathable Slip On Sneakers New Womens Shoes , NIB Disney Block Party Bash Women's Athletic Sneaker Shoes Size 5 Costume StudioNIB Nike Air Rift Premium QS Shoe Sz 6 , NEW NIKE WOMENS AIR MAX TAILWIND 8 805942 400 $110 SZ 8NIKE TIEMPO LEGEND VI FG ACC SOCCER CLEATS WMN SIZE 6.5 NEW RARE (819256-164) , Nike Ruckus Mid skate shoes black white 6.5 Md NEWWOMEN'S SHOES SNEAKERS ADIDAS CITY RACER W [B74491]New Balance Fresh Foam Zante - Women's Running Shoes Sunrise Glo ZANTDB SZ 8 , NIB NEW BALANCE 590 W590BP3 ATHLETIC CASUAL SHOES MADE IN USANEW adidas Superstar 80s W BLACK/WHITE BZ0643 SIZE 6 , Easy Spirit Traveltime Mules Shoes Womens 9.5 M Bone Off White Spark Slip-On NIBGentlemen/Ladies K swiss Womens Sneakers Guarantee quality and quantity Fine art best seller , Gentleman/Lady Guess Gerrer3 Sneakers, Size 9M Fine processing Lush design Outstanding function , Zee Alexis Womens Kerrigan High Top Sneakers Burgundy 6 M , NIKE WOMENS DUALTONE RACER DARK STUCCO 917682-002 , Mens MERRELL Goretex Moab Ventilator High Ankle Hiking Trail Shoes Boots 8.5 , Skechers Heirloom White Slip-on Sneakers - Size 11STEVE MADDEN FELICITY CAMOUFLAGE WEDGE SNEAKERS ANKLE BOOTS 36 6 RARE ! , Zee Alexis Womens Kerrigan High Top Sneakers Black 10 MNIKE AIR MAX IVO - WOMENS RUNNING SHOES 635790 - 133 - SZ 9 - WHITE & GREENAdidas Alphabounce EM Shoe BW1194 Gray Womens Size 8.5Puma Suede Platform Elemental Puma Black-Black-Puma Black (WS) (362224 01) , Nike Hypervenom Phelon II ACC FG Soccer Cleat Size 7.5 Womens 844268-164Womens Converse CT All Star Brush Off Hi Top Sneaker White/White 553304FReebok Fuel Techno Training Sneaker 7 M BlackPink/Silver Synthetic New with BoxPre-Owned- TOKIDOKI x FORNARINA Cherry Hill Pink Womens Shoes-RARE- Size 38/7.5 , Vans Authentic Lo Pro Pop Persimmon Sparkling Grape Women's Size: 5.5NIKE AIR FORCE LOW USA INDEPENDENCE DAY MULTICOLOR RED WHITE BLUE 4Y ,
    Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5 - blurrypron.com>Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5 - blurrypron.com
    New $148 Jack Rogers Peyton Oak Brown/Tan Suede Bootie/Short/Ankle Boots sz 7New Dolce Vita Taupe Calla Suede Ankle Bootie, Size 9, $284 Retail , Andrew Charles C120 CAMOSCIO NAVY boots Women's Blue USSaint Laurent Debbie 100 silver stud western boot in Size 38 , AUTHENTIC MANOLO BLAHNIK HARAKO ANIMAL BOOTIES BROWN GRADE AB USED -ATMen's/Women's James Smith Black Loafer Elegant appearance Bright colors Outstanding styleNew Women Stilettos Round Toe Tassel Slip on Metallic decor Patent leather Shoes , Sweet Chunky Heels Open Toe Rhinestone Straps Summer Pumps Sandals Womens ShoesMen/Women Nina Women's Donela Pump Rich design Sufficient supply professional designBRUNO MAGLI Womens Heels Shoes 5.5N Beige Ankle Strap Italy Leather Closed Toe , SAM EDELMAN Serena Nude Wedge Sandal Gold & Ankle Straps Size 8.5 , JOE N JOYCE Rio SynSoft Soft-footbed Metallic - Black - FlipsNIKE AIR JORDAN PHASE 23 SNEAKERS SHOES MENS 13 630615 BLACK/RED MIDAdidas ZX 700 Camouflage Blue/Black/Gray Mens B24838 Size - 11.5Nike Air Zoom Vomero 11, Men's Size 13 Medium (D), SquadronBlue/White/Grey NEW!Nike Zoom Vaporfly 4% 4.5 Vast Grey Light Carbon 880847 004 Elite Race Fly OffASICS Men's New GEL-NIMBUS 20 TOKYO 2018 BLACK Limited μαραθώνιο Free Expedited , NIKE AIR VAPORMAX FLYKNIT ID BLACK-WHITE-GREEN SZ 9.5 [941834-993]NIKE AIR JORDAN 4 RETRO "BRED" - SIZE US 9 - ASK FOR FREE SHIPPINGRocky Men's Rkk0226 Construction Boot - Choose SZ/ColorConverse Fashion Sneakers Original new all star canvas shoes men's women unisexFashion Mens Square Toe Embroideried Slip On Velvet Casual Shoes Driving ShoesMan's/Woman's Converse Trainers Pro Leather 76 Mid. Beautiful design Bright colors Very good colorWomen's Nike SF Special Field Air Force 1 MID Shoe Size 10 Vast Grey AA3966-005 , Nike Air Max 95 SE PREMIUM Womens Size Shoes Black Reflective Silver AH8697 001 , Nike Air Max Sequent 3 Premium V Womens AR0255-001 Oil Grey Taupe Shoes Size 5Women's Nike Air Max 97 Ultra '17 LX - CHOOSE SIZE - AH6805-002 Lux Pink PurpleWomens Sweater Top Stretchy Pull On Mid-Calf Boots college Wedge Heel Shoes Slim , women's shoes GIANNI MARRA 7,5 () ankle boots gray leather BX82-37,5 , Rocket Dog Women's TAYTE Suspect PU/Finland Knit Fabric Combat Boot, Black, 8 M ,
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5 - 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.

    Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5 - 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
    Clarks restez-conne-19345 Originals Ankle Shearling Othello Sonnet Womens RED Suede and Shearling Ankle Sneaker d0579c5
    Athletic Shoes
    >
    ;