Never miss an update

Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8

Never miss an update

Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8 -

    Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8
    Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8
    Clarks Originals Clarkdale Tone Womens Dark Tan Leather Ankle Boots - 7 UK , Tommy Hilfiger Corporate Belt Rain Womens Black Wellington BootsIrregular Choice Miaow Black Pewter Womens Ankle BootsClarks**Un Ashburn Black Suede**Womens Slouchy Casual Ankle Boots UK3.5 RRP , Man/Woman Demonia RANGER-105 High-quality Modern design Famous store , Men/Women Demonia RIVAL-309 New Listing Attractive fashion Outstanding functionRTBU MAID'S (w/ Zip) 18cm Stiletto Handmade Boots Double Wrap Buckle StrapHogl black leather Swarovski embellished ankle boots, /RRP BNWB , Romika Varese N 13 Women Leather Matt Black Ankle Boots UK Size 3 - 8Riva Womens/Ladies Brio Zip Up Ankle Boots (FS3528) , Men's/Women's Gabor TESS GABOR ANKLE BOOT flagship store new Strong heat and heat resistance , The Little Mermaid Ursula Ariel WOMEN'S Martin Boots Disney Villains , Gentlemen/Ladies Ladies Remonte Chelsea Ankle Boot, R6478 Special purchase First grade in its class buy onlineGiani Bernini Womens Boelyn WC Closed Toe Knee High Fashion Boots , LADIES HI-TEC CAHA WP CHARCOAL VIOLA WATERPROOF VIBRAM WALKING HIKING BOOT , AUTHENTIC TODS LEATHER LONG BOOTS BROWN GRADE B USED -AT , Man's/Woman's Ladies Gabor Boots Style 51.702 Not so expensive Online Modern and elegant , RTBU DENZEL 20cm Platform Calf Boot Wedding Bride White Patent Custom Order , CLARKS Ignify Mid GTX Dark Brown Leather Women's HIKING Boots RRPKENDALL & KYLIE Laila Leather Boots - Black Size US 6M RRPMen/Women Demonia DYNAMITE-100 selling price real a wide variety of goods , BD42 WOMEN'S SHOES 36 SNEAKERS BALDININI BLACK LEATHER WEDGES 8 CM MADE IN ITALY , 15cm Platform Ankle Oxford Bootie Extreme Hi Heel Goth Runway Custom ColorLe Chameau Giverny Womens Black Rubber Wellington Boots , Womens Office Aloud Point Block Heel Boots WHITE PATENT Boots , Gentleman/Lady Ladies Van Dal Snow Boots 'Havelock' Quality products the most economical Pick up at the boutique , RTBU DENZEL 20cm Platform Diva Silk Satin Fetish Custom Calf BootMan's/Woman's Demonia CRAMPS-06 fashion First batch of customers ExportVersace 19.69 3104098 VERNICE AMARANTO boots Women's Multicolor AU
    Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8 ->Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8 -
    adidas Originals X_PLR Major Green Olive Red Men Running Shoes Sneakers BY9263 , DC SHOES WES KREMER 2 S BROWN BLACK SS 2018 43 44 SHOES NEW SKATENine West Anilla Over-The-Knee Tassel Zip Boots 643, Black, 5.5 US , Gino Ventori Hero Womens Comfort Soft Leather Everyday Flats , House of Dereon Booties Open Toe Zip Pewter Sequin Logo Embossed 7.5 NWOB , Joe's Jeans Women's Robbie Dress Sandal, Silver, 9.5 M US , INC International Concepts Womens maddiee Closed Toe Black lasso Size 10.0 L6B , BCBG Max Azria Women's Folley Dress Shoes Tan Size 9.5 , Skechers Size 9 Taupe Leather Sandals New Womens ShoesEarth Empire Brown Leather Strappy Slide Sandals, Wm's Size 9.5 , NIKE Size 10 LEBRON ZOOM SOLDIER VII KINGS PRIDE SNEAKER 599264-103 FLORALNike white/red Leather 458673-160 Low Mens Sneaker Size 10.5Nike Air Max Griffey Max One-Varsity Royal Blue/White-Mens Sz. 12-Worn Once , New Balance Men's 501v1 Sneaker Dark Covert Green 9 D US , Saucony Men's Hurricane Iso 4 Running Shoe , Nike Blazer Mid X Off-White Orange Vanilla All Hallow's Eve US 7 / / , Nike Air Max 97 Camo Country us , Nike Mens Air Jordan 11 Retro "Cap and Gown" Black/Black-Black 378037-005Wolverine Original 1000 Mile Plain Toe Boots 8.5 US D , Magnanni 'Dante' Plain Toe Derby Tuxedo Shoes Black Mens Size 9.5 M MSRP $299New Adidas Stellasport Performance Women's Aleki X Cross-Trainer Shoe US10Korea Fashion Open Toe High Tope Heels Sneaker Womens Wedge Mesh Hollow Out Shoe , Men's/Women's Skechers, 14010 BKHP, Women, Go Flex Easy to clean surface Trendy renewed on time , New Balance WW847BK Women's Walking Shoes, Black, 6, New, Free Shipping US48! , Reebok Fusium Run Berry Purple White Black Women Running Shoes Sneakers CN4661 , NEW Nike Huarache Run Womens 8 Desert Sand Hot Punch Pink Beige SneakersSuper- Hermes Short Boots Shoes 37 Ju-Based Dark Fall �ŠS Rf1213984 (129756Occident Women's Platform Low Heel Pull On Real Leather Ankle Boots Dress ShoesWomen Punk Spike Stud Buckle Bright Real Leather Ankle Boots Military Motorcycly , Steve Madden Black Leather Intyce Wedge Riding Boots 8.5M NEW
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8 -

    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.

    Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8 -

    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
    Aigle Aiglentine Women Rubber Rubber Black Aigle Wellington Women Boots 3a35bf8