Never miss an update

Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8




Never miss an update

Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8 - blurrypron.com

    Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8
    Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8
    Nike Women's Free 5.0+ - Violet Force/Bright Citrus-Purple (580591-580)Converse High Top Chuck Taylor Shoes 6 Pink Gold Chains Sneakers , Sperry Top-Sider Jaws Movie Seacoast Casual Shoes Blue Water Womens Size 7MPuma x Fenty by Rihanna The Trainer High White - Womens - Size 9 BNew Women's size 5.5 NIKE Free 5.0 TR FIT 5 BRTHE 718932-100NEW VANS SK8 - DECON HIGH TOP CUT-OUT SHOES - LEAVES/WHITE - US SZ W 10.5, M 9.0 , Women's Gray/Pink NEW BALANCE 610 Trail Running Tennis Shoes - Size: 10.5Gentleman/Lady Dr. Scholl's Women's Madison Fashion Sneaker High-quality Has a long reputation Global salesWomen's Skechers Keepsakes Peekaboo Bootie 48803/CSNT Color Chestnut Brand NewNEW $150 NIKE WOM 7 TENNIS CLASSIC ULTRA FLYKNIT RUN GYM TRAIN PINK SHOES SNEAK , Brooks Women's Glycerin 15 Running Shoes Black PInk US 7 , NEW ($119) Kim & Zozi Hippie Bling Janis Lowtop Shoe. 100% Authentic.Dr. Martens Women's Belmont Canvas Ankle-High Fashion Sneaker , Skechers Womens Slip on Trainers 6 UK- Select SZ/Color. , Nike Women's Air Max 90 Se Running Shoes 881105 002 Black/Gray, Pre-OwnedOnitsuka Tiger by Asics Women's Mexico 66 Running Shoes Clearwater , Baby Phat Endo Lux BP51204 White/Gold Classic Shoes Women , BNIB Reebok Speed Rise MemoryTech Women Running Shoe Gray/Neon/Green/WhiteWomens Nike Hyperdunk 2016 TB Basketball Shoes Size 11.5 White Black 844391 110 , MUST SEE FABULOUS NWOT NEW BALANCE Turf Fastpitch 4040v1 ST4040B1 Womens 10.5 BHi-Tec Cortina Taupe / Berry Women's Leather & MeshTrail Running Athletic Shoes , Vans Authentic Decon (Scotchgard) Fig/White Classic Casual MEN'S 7.5 WOMEN'S 9ASICS Noosa FF (T772N-3906) Womens Running Shoes Aquarium / Flash Coral NWT NEW! , PRADA car shoes from NEIMAN MARCUS driving athletic ORANGE green fuchsia 37.5 , ASICS GEL-Lyte V - Purple - Womens , Nike Free RN 2018 Sun Women's Running Shoes, Size 12, AH5208 001 , Adidas M29685 Climaheat Rocket Boost Winter Running Shoes, Women's US 9.5Asics Gt 2000 5 T757N Sneaker Womens Shoes Size 5 Midgrey white pink glowNew NB New Balance 420 Women's Size 7 D Width Shoes White WRL420SB ,
    Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8 - blurrypron.com>Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8 - blurrypron.com
    New in Box Women's Merrell Winterbelle Boots Waterprof Insulated Black/Purple , Dr Martens 1460 Airwair Women Leather 8 Eye Smooth Ankle Boots All Colors SizesWomen's shoes boots leather model ALDEN Us 3.5 to 12Frye Women's Dark Brown Phillip Riding Boot 6427 Size 7BDS WOMENS CLARKS FRIYA DESERT BOOT CHESTNUT LEATHER sz 10 MADE IN ITALY crepe , Mr/Ms FitFlop Slinky Rokkit Toe-Post Black Sandals Reliable quality New design Exquisite (processing) processing , ABEO Abby 3 Dimensional Digital Design Pewter Mary Jane Shoes Women's Size 10Man/Woman Andrew Charles Womens Loafer Pink CAMILLA excellent quality First quality As of the latest model , Sexy Womens Stilettos Strappy Boots Sandals Pointy Toe Hollow Out Pumps ShoesKenneth Cole New York Womens damariss Open Toe Casual Lavendar Size 8.0 , Old Friend Slippers Womens Sheepskin Scuff M 6.5-7.5 W Black 441201 , CLASSIC MENS PUMA BLACK WHITE RUNNING SZ 8.5 NEW IN BOX , ADIDAS Kareem Abdul Jabbar Mens Sneakers Shoes Brown Leather Retro Vintage 10NIKE Zoom Waffle XC Red Black Cross Country Spikeless Shoes NEW Mens Sz 8 , Mens Under Armour TB Micro G Threat Low Basketball Shoe - 1231542-653Nike Dunk High Premium SB "Chicken & Waffles" 313171-722 Men's Sz 7Adidas Crazy 8 ADV PK Core Black Silver Gum BY4423 5-13 kobe prime knit ball , FOOTJOY DryJoys Fit-Bed Black & Brown Leather Waterproof Golf Shoes 9W = NO15Asics GEL-Fastball 3 [E712N-001] Men Volleyball Badminton Shoes Black/OrangeNike Rosherun Team Red/Sail 511881-610 size 9 Brand New, DS , Lugz Women's Empire Hi WR Winter BootAdidas adiZero 5-Star 4.0 Football Shoes Mantraflage/Multicolor D70083 Sz 8 - 11 , Nine West Shutout Slip-On Fashion Sneakers, Dark Gray/Dark Gray, 8.5 USReef Women's Rover Low TX size 10 Grey , NWOB Vivo Barefoot Pink & Gray Sneakers - 6 European 36 , Under Amour Women's Charged Bandit 3 Athletic Shoes Grey/Indigo/Orange , New Balance 530 Steel Grey/Black-Coral W530MON Women's SZ 5.5 , Adidas PureBOOST X All Terrain ATR Women Running (Size 7.5) Black / White BY2691Cole Haan Women's Octavia II Slingback Sandal Nude Leather SandalsAlexander McQueen Puma Brown Leather Fur Hi Top Sneakers Womens Sz 8 Shoes ,
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8 - 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.

    Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8 - 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
    Floral Flats Suede Embroidered Booties dcrossddon-11171 Ankle Shoes Suede Low Heels Boots Women Flower Flats 90638c8
    Athletic Shoes
    >
    ;