Never miss an update

Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb




Never miss an update

Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb - blurrypron.com

    Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb
    Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb
    DSQUARED2 MEN'S SHOES LEATHER TRAINERS SNEAKERS NEW 551 BLUE 8B9ADIDAS CHAUSSURE CLOUDFOAM ULTIMATE - WHTGREY - 9 (4059323721648)Mens Clarks Tan Leather Slip On Casual Shoes Recline Free , REEBOK CHAUSSURE CLASSIC LEATHER - BLKGUM - 8 (886406214216) , Colmar MEN SNEAKERS TRAVIS GLIPH Black black/Yellow mod. BLK , TAYGRA Slim Shoe Vegan Leather Recycled Flexible Ethical Handmade Sneakers EcoEmerica Wino G6 Dark Grey White Mens Suede Skateboard ShoesREEBOK CHAUSSURE CLASSIC LEATHER - BLKGUM - 10 (886406214285) , Men's/Women's Sax CHAUSSURE LEATHER mod. USA Brown Clever and practical Latest styles Shopping promotion , Fallen Shoes Spirit Chocolate Jamie Thomas Pro FREE POST New Skateboard Sneakers , Men boots suede model NOMAD Aus 1.5 to 12 , Adidas Originals White & Black SuperStar 80s TrainerREEBOK CHAUSSURE CLASSIC LEATHER - BLKGUM - 12 (886406214339) , Montecatini Mens Folded Cap Oxford Tie Patent Coated Leather Shoes (DF856)HOGAN MEN'S SHOES SUEDE TRAINERS SNEAKERS NEW INTERACTIVE ALLACCIATA BLUE 852 , HOGAN MEN'S SHOES SUEDE TRAINERS SNEAKERS NEW INTERACTIVE BLUE 59FCONVERSE CHAUSSURE ALL STAR HI LTH SUEDE - GREYWHT - 43 (888754877945)REEBOK CHAUSSURE CLASSIC LEATHER - BLKGUM - 11.5 (886406214223) , DEWALT - Black Challenger 3 Sympatex Boot Size Euro 39Mens Emboridery Flat Floral Trendy Slip on Loafer Casual Wedding Dress Shoes NewCONVERSE CHAUSSURE ALL STAR HI LTH SUEDE - GREYWHT - 45 (888754877778)NEW BALANCE CHAUSSURE 500 - NAVY - 7.5 (191902159320)DEWALT - Black Challenger 3 Sympatex Boot Size Euro 43ADIDAS CHAUSSURE 8K - GREYBLK - 9.5 (4059323268938) , New Rock Hybrid Skull Buckle Leather Shoes - Black - HY005-S1 - Gothic,Goth,Leat , Andrew Charles 8187 SOFTY AVION 270 Loafers Men's Blue AUTOD'S MEN'S SHOES LEATHER TRAINERS SNEAKERS NEW CASSETTA RUBBER BLACK 050Moreschi Men's Brown Lambskin Leather Loafers Shoes Leather soleCONVERSE CHAUSSURE ALL STAR HI LTH SUEDE - GREYWHT - 40 (888754877891) ,
    Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb - blurrypron.com>Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb - blurrypron.com
    Gentlemen/Ladies FRYE Women's Melissa Harness InSide-Zip Boot Good design Settlement Price comfortablemens brogues dress shoes formal shoes crocodile pattern wedding shoes oxfords LL , Men's Sneakers Slip On Shoes CHANGE! ZipperM Hexagon Ardesia Shock Indemonia , Adidas Men's Tubular Doom Pk Originals Running Shoe , Gentleman/Lady Sneaker MSGM Ollie Skate Packaging diversity stable quality Valuable boutique , Rare MARIAGRAZIA RIPARI Brown & Khaki Leather Cowgirl Boots Size 38.5DZ983 MBT shoes black leather women slip on 9 (/3) , Cole Haan Women's Studiogrand KT TR Fashion Sneaker Size 9B , Women Rivet Open Toe Slipper Sandals Block Heel Cut Out Slip On Shoes Breathable , Penny Sue Vengeance Leopard Strap Cage Cutout Ankle Boot Platform Shoe Size 8 , Manolo Blahnik Leoni Denim Stretch Flat Sandal Blue Womens Shoe SIZE 39 / US 9 , NEW Christian Louboutin SCISSOR GIRL Nude Satin Shampagne Platform Shoes 37.5Sandby Saya - BLUE NOHO – WEDGE SANDAL - Size 8 / 9 *** Retail $89.00 *** , Adidas Alphabounce EM Running Shoes - Women's Size 10.5, Gray/Black , Nike Air Jordan White Leather High Tops 820240-100 Basketball Shoes Mens Size 11 , Mens Adidas NMD R1 Nomad Mesh Grey Camo Yeezy DS Rare USA 100% AUTHENTIC S79163NEW NIKE AIR ZOOM STRUCTURE 19 MENS CUSHIONED RUNNING/SPORT SHOES , NIKE AIR FORCE 1 AF1 DOWNTOWN HI/SP ACRONYM SZ 9.5 RARE! [649941-006] , AIR JORDAN 14 RETRO CDP 311832-061 black/varsity red 14 Size 10 , Adidas B37112 Men UAS Rivalry LO Casual shoes black white SneakersRancho 2105 CZ Olivia New Original Biker Boots Cowboy Style black olive handmadeEastland Men's Victor Venetian Loafer , Balenciaga Dark Blue Patent Leather patchwork Italy us 14 , PRE Under Armour Women Charged Lightning COLOR RHINO/STEEL/PINK SANDS SIZE 6.5 , NEW NIKE WMNS NIKE AIR MAX 1 SE (881101-300) GHOST GREEN HOT PUNCH PINK 7.5 NIB , MIZUNO WAVE INSPIRE 12 WOMENS RUNNING WORKOUT JOGGING TRAINING GYM SHOES NEW , Nike Wmns Air Max 1 White Obsidian Black 319986-104 30th Anniversary Size 9 , New Balance Shoes 008571 Black US8Black Women Suede Block Over Knee Booties Fashion Back Bow Tie Dating ShoesOriginal DIESEL Bottines Daim Noir Pointure 40 Neuves-New ,
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb - 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.

    Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb - 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
    Stokton 648-U Black Leather Strap Leather Sneaker - Stokton NEW in 648-U Box 4f008fb
    Casual Shoes
    >
    ;