Never miss an update

Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690




Never miss an update

Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690 - blurrypron.com

    Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690
    Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690
    Rockport Men’s Eureka Brown Leather Walking Shoes Size 12M D961/Rockport Men’s Eureka Brown Leather Oxfords Size 10W D863/ , Ted Baker Men's Dannez Sneaker - Choose SZ/Color , Dunham Captain Tan LTHR Walking Shoe Size 11EEEE D1139/Puma Cell Surin Deboss 18928601 Running Shoes Gray Blue Medium (D,M) MenDC Men's Argosy Vulc Skate Shoe - Choose SZ/ColorPuma Basket Classic Citi 35993802 Casual Shoes Gray White Medium (D,M) Men , NEW Men's Bexley Casual Shoes Size 9.5 Nar , Converse Chuck Taylor All Star Hi - Choose SZ/Color , Rockport Men’s Mudguard Rocksand Leather Walking Shoes Size 6.5W D1410/Rockport Men’s City Play Black Leather Walking Shoes Size 10.5M D1149/Keen Men's 13 D Asheville Black Aluminum Toe Oil & Slip Resistant Work Shoe NEWNettleton Mens Shoes Size 9.5 A- Gray Blue Suede Loafers w Cut Outs , Vans Sk8-Hi Reissue VN-0ZA0EWB Leather True White Casual Shoes Medium (D,M) Men , THOMAS DEAN * ITALY * CLASSIC PENNEY LOAFER IN BROWN CALF * 41.5 * SUPERB , Rockport Men’s Northfield Espresso Nubuk Oxfords Size 10M D1534/ , TOD'S BLACK LEATHER CASUAL SHOES PENNY LOAFERS Sz 8M MADE IN ITALY , Sanuk Men's Koda Select Chukka Boot - Choose SZ/ColorSKECHERS Skechers Moogen Sender Mens Slip On Loafers 11- Select SZ/Color.Eastland Men's Adventure MLB Royals Boat Shoe - Choose SZ/ColorRockport Men’s Rock Cove Taupe Suede Walking Shoes Size 10.5M D2098/ , Rockport Men’s Get Your Kicks Blucher Brown Leather Walking Shoes Size 13W D990/New In Box Cole Haan Grandpro Runner Size 11 M Black Suede Men’s , Hush Puppies Tracker Men’s Comfortable Casual Leather Shoes $130 NEW 12 D , Rockport Men’s Northfield Black Leather Oxfords Size 7.5W D2085/ZANZARA Men's Cezanne Slip-on Loafer, Cognac, 10.5 M USKlogs Footwear Edge Chestnut Men's Slip-Resistant Clogs Sizes 11 , Vans 106 Mid VN-0UCQ0KJ Black White Nubuck Authentic Shoes Medium (D, M) MenRockport Men’s StylePurpose Moc SlipOn Black Leather Loafers Size 8.5M D1004/ ,
    Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690 - blurrypron.com>Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690 - blurrypron.com
    VINTAGE CODE WEST 51023 COWHIDE SUEDE COWBOY WESTERN BOOTS WOMEN'S 7.5 M , Rag & Bone Ashby Ankle Boot - Black - Sz 37.5 EU; 7 US , TANINO CRISCI Leather Brown Riding Equestrian Boots Women's 40 EU , Ladies Old Gringo 12" Golondrita Boots, 8FitFlop Flip Leather Adjustable Backstrap Sandal FlameLadies Rieker Casual Shoe The Style M1365 -W , Cole Haan Dellora Skimmer Pointed Toe Loafers, Black/White, 5.5 US , Women's Tod's Flats Loafers Size 7.5 Brown Pebbled Leather w/ Buckle All Leather , Size 9 (/ ) Womens Black Leather Point Toe Ballet Flats MADE IN SPAINCHRISTIAN LOUBOUTIN PARIS TASSEL BROWN LEATHER KITTEN HEELS RED SOLE SIZE 37 , Escada Black Beaded Satin Strappy Sandals Heels 38 - R70Irregular Choice Multi Color Heels Pumps Moccasin 37 US6.5 UK4 Near Mint IC134New YSL Palais 105 Open Toe Pumps in Black, IT 40, with box, floor display , Tongs Columbia femme Kea Vent taille Beige Cuir A enfiler , Mr/Ms Vans Authentic Womens Trainers Size 10.5 Elegant shape Elegant and sturdy packaging Breathable shoesALEXANDER WANG DEVON BLACK LEATHER ESPADRILLE PLATFORM SIZE 36/US 6 $500Juniors Nike JORDAN SON OF BG Black Basketball Trainers 512246 006Adidas Men Shoes Questar Ride Running Training Fitness Fashion Trainers B44807DC Men's Cole Lite 2 S Se - Skate Leather Shoes, Grey/Royal, 9.5 M , Mens NIKE AIR MAX PLUS TN SE Particle Rose Trainers AQ4128 600 , Nike Lebron X 10 CUTTING JADE Size 11.5 Nike Retro 11 IX 541100 303 GreenBelvedere Men's Baltazar Calf Leather High Top Sneakers 030 Green , Adidas CQ2444 Men NMD R1 PK Running shoes black red sneakers , Cole Haan Men's Grand Tour Chukka Boot - Choose SZ/Color , NIB Men's Florsheim Cove Brown Slip-On Shoes * color: stone * size 9 * MSRP $100 , Mr/Ms Madden Girl Women's Maaui Fashion Sneaker Complete specification Modern and stylish fashion leading the fashionSperry Top Sider Black Womens STS80224 Ankle Boots. Size Great Condition 8.5 M , Ellen Degeneres Zabi Chelsea Boot Lagoon Ventura Pebbled Size 7.5 , FRYE Brown Leather Ivory Canvas Booties Grommets 8.5 Wear All Year!! Rare! , Woman's Dan Post Brown Cowgirl Boots Size 7 Pre-Owned
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690 - 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.

    Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690 - 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
    Soft 28041 Science Men's The Men's Cruise Khaki Canvas Boat Canvas Shoes f20c690
    Casual Shoes
    >
    ;