Never miss an update

Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98




Never miss an update

Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98 - blurrypron.com

    Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98
    Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98
    Dan Post Men's DP2350R Raleigh Teju Lizard Exotic Boots Size 10.5"MADE IN USA BROWN PECOS RED WING WATERPROOF DISTRESSED STEEL TOE BOOT 9EETony Lama Men's KRAUSS TAN Cowboy Boot Medium Round Toe Rubber Outsole - 7950 , CHIPPEWA BOOTS 27862 12" ENGINEER RALLY BOOTS MEN'S 13 D FREE SHIPPINGMen's Wild West Genuine Elk Leather Western Boots 3X Pointy Toe HandmadeNIKE SFB GEN 2 8" Field Boots British Khahki Desert Military 922474 201 Sz 10.5THE NORTH FACE Boots Mens Traverse Base Camp NF51846 Lite Black US10 NEWNew Handmade Mens Military Style Superb Leather Boots Long Men Boots leatherSole , New Rock M.591X-S2 Unisex Gothic Ankle Boots - BLACKHarley Davidson Men's Darren Black Riding Boots D93216Georgia GB00086 Mid Calf Boot - Choose SZ/Color , Winter Men's Brogue Business British Ankle Boots Casual Genuine Leather Shoes , New Santoni Made in Italy US 7 Italian Sneakers casual shoesLucchese Mens Ostrich Full Quill Brown Two-Tone Cowboy Boots 8-1/2B (N7623) $650 , VTG LUCCHESE CLASSIC USA BLACK CHERRY GOAT LEATHER RANCH BOOTS SZ 7.5 B Cats PawVTG-Chippewa Work Hunting Birding Cork Sole Cats Paw Leather Men Boots 8.5 SKU7 , Lowa Mens Renegade GTX Mid Boots 310968 9999 Black Size 11.5/WideFlorsheim Men's Brookfield Bit Loafer - Choose SZ/color$ RED WING Handswen Chukka Boots Size 10.5 E , Danner Men's Ironsoft 6 Inch Plain Toe Work Boot - Choose SZ/colorTHOROGOOD AMERICAN HERITAGE MOC TOE EH WEDGE WORK BOOTS 814-4178 - ALL SIZES , NEW ROCK M.727-S1 With Patent Flames Bikers Skull Chains & Spikes BOOTSRocky Men's Fq0008729 Hiking Boot, - Choose SZ/Color , New Rock M.988-S1XX Mens Leather Ankle Boots - BLACK , CHIPPEWA 20067 THOMPSON 6” BOOTS MADE IN THE USA NWT SZ 11D , Mr/Ms Ariat VentTek Ultra Barley Boots Moderate price New style General product , Georgia Boot Mens G51 12" Wellington Gold Coast Barracuda SPR Leather Work Boots , Handmade Mens Military Leather Boot, men combat boots, Men Ankle Boots BlackMichelin Men's Hydroedge Hitop Steel Toe Boots
    Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98 - blurrypron.com>Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98 - blurrypron.com
    WINNA FUR BOOTS CAMEL MADE IN ITALY SIZE 39 , Gentlemen/Ladies Hogan HXW2380O752778MB999 boots Women's Black US High grade Wholesale trade Most practical , *Authentic* Brooks Glycerin 15 Mens Running Shoes (D) (473)RTBU SLICK 18cm Stiletto Hard Shaft Rear Zip Gold Piping Thigh Boot Patent BlackMen's/Women's Aravon Women's Farah Fashion pattern Order welcome Exquisite processingJBU by Jambu Women's Peterson Ankle Bootie, Brown, 9.5 M USDansko Women's Makenna Full Grain 9306-457800 In Brown Sz. 40-41 New W/Box , PLEASER Shoes Patent Clear Heels Platform Rhinestone Sandal ALLURE-609 BlackAZ160 HOGAN shoes gray suede patent leather women pumps EUYVES SAINT LAURENT Tribute Two Patent Leather Pumps (Size: 36)Antelope NIB Ankle Strap Leather Clog Platform Wedge Pump Mary Jane 41 GREY $209 , Mercedes Castillo LUCINDA Black Suede Mule w/Embellishments $585, Wmn's US 8.5MNew Fashion Womens buckle suede chunky mid heels Rhinestones sandals shoes graceChaco Woman's Classic Toe Loop Sport Sandal Size 10 , New Balance Women's Size 10 Red/Grey WL574SYB Athletic Shoes X14-520Alexander McQueen New sz 37.5 7.5 Womens Designer Skull Flats Shoes Sandals pinkNEW BALANCE ZANTE MENS RUNNING SHOES SNEAKERS BLACK MZANTBK3 US10Men New Balance M990BU3 Medium (D) Made In USA Burgundy 100% Original Brand NewMerrell Men's Capra Mid Waterproof Hiking Boot - Choose SZ/Color , Rocky RKS0351 Men's Core Black Neoprene Rubber Waterproof Pro Hunting Boots~PUMAFERRARI FUTURE CAT Men Sport Sneakers Black White US size 7,7.5,8.5,10 n 12 , Men's/Women's New Cole-Haan M black Beautiful color Bright colors Outstanding functionYRU Black and white platform Prizm Sandals , Womens Nike White Metcon 3 Crossfit Training Shoes 849807 Size 10 NEW NIB $130 , Isabel Marant Bekett Suede High-Top wedge Sneakers Size 36 (5.5)  (pre-owned) , Gentle Souls Women's Kiki Platform Sandal Cobalt Leather Buckle Fastening , White Mountain Bully Full Zip Luxurious Gray Suede Women's Wedge Boots Size 9.5 , Womens Fur Trim Zipper Wedage Heel Side Zipper Round Toe Over Knee Thigh Boots # , Womens Ladies Fashion Faux Suede Diamante Block Heel Over Knee Boots Shoes Sea1Call it Spring Talcahuano Ankle Booties, Black Nubuck, 6.5 US / 37 EU
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98 - 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.

    Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98 - 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
    Le Chameau Boots Vierzon Mens 29580 Vibram Mens Green Rubber Wellington Boots 9008e98
    Boots
    >
    ;