Never miss an update

NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2




Never miss an update

NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2 - blurrypron.com

    NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2
    NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2
    Reebok Instapump Fury whether Trainers Shoes Men's Women's AR1413 White New , NIKE Men's Roshe LD Squadron Blue SIZE 11Nike F.C. Hypervenom 2 Free 3.0 747140-003 Men's Training Shoes US 12 New , Nike Air Max Guile Mens 916768-009 Gunsmoke Grey Navy Running Shoes Size 12NEW NIB NIKE Men's Air Max 95 Premium SE Running Shoes 924478-201 Torch Plus Kh , ADIDAS EQT SUPPORT ULTRA WHITE BOLD ORANGE GREY BY9532 SZ 8 , NIKE AIR MAX 90 ULTRA 2.0 ESSENTIAL TRIPLE WHITE 875695 101 MENS SZ 11.5 , 876070-001 Nike Men Air Max Zero Essential Black Paramount Binary BlueAIR JORDAN 2 RETRO "IRON PURPLE" 2014 - ITEM NUMBER 2326-7 , Nike KD 8 EXT Sail Chrome 806393-100 Woven Off White Premium Gum Size 9 ATHLETIC , Mens Nike Air jordan VII 7 French blue white 2002 304775 141 OG 6 5 4 1 13 XI IVNIKE AIR FOOTSCAPE WOVEN NM SEQUOIA OREWOOD BROWN SAIL 875797 300 SZ 9.5Man's/Woman's 996 MS NOIR GRIS Excellent value a variety of Known for its beautiful qualityADIDAS ORIGINALS NMD RACER PRIMEKNIT SZ 9 CLOUD WHITE PK B37639SZ 14 Nike Kobe XI 11 TB Promo University Gold Ice Basketball Shoes 856485-771Reebok Kamikaze II Mid Neon Yellow/Black GLOW IN THE DARK Size 9.5BN~Adidas CC ROCKET BOOST CLIMACHILL Running gym Energy Shoe Supernova~Men sz 11 , Nike Brazil Snake Skin Cmft Qs RareGentlemen/Ladies MEN’S NEW BALANCE LIFESTYLE ML574LPK SHOES Reputation first Elegant and sturdy packaging Different stylesNIKE SF AF1 AIR FORCE 1 MID SUEDE SZ 12 VAST GREY ATMOSPHERE AJ9502 001 , NIKE AIR SHAKE NDESTRUKT TRIPLE WHITE BULLS RODMAN 2017 880869 101 SZ 12Men's Nike KD VIII 8 EXT Woven Sail White Gum Bottom Black Size 9 806393-100 , New Balance 574 ML574OSB Khaki Blue Tan 72015 Nike Jordan Melo M11 Mens Basketball Shoes 716227-013 SZ 18 Black MetallicMr/Ms Kobe 9 Mango Innovative design Has a long reputation Authentic guarantee , NEW Adidas Equipment Running Support EQT 93 Shoes London Red SZ 12 ( B27660 ) , Men's/Women's Nike Current 13 excellent quality New products in 2018 Cheap order , Bona Fide Asics 195TR Mens Crosstraining Shoe (4E) (0190)NIKE AIR SHAKE NDESTRUKT / PIGALLE AA4315-100 ELEMENTAL PINK CARNATION SZ: 10
    NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2 - blurrypron.com>NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2 - blurrypron.com
    PRADA Calzature Donna Capra Antic Black Nappa Leather Zip Ankle Boots Sz 39 8.5 , Arche boots Garok bootie black nubuck leather size 40 us 9 M , HOGAN WOMEN'S LEATHER FLIP FLOPS SANDALS NEW VALENCIA VINTAGE BLACK 0C3Womens Slip On Woven Hollow Out Slides Platform High Wedge Heels Summer SlippersAltra Women's HIIT XT Cross-Training Shoe, Gray/Lime, 7.5 B USFendi NIB Blue White Black Denim Patent Leather Block Heel Sandals SZ 40.5 , Gentlemen/Ladies NIKE Men's Lunarconverge Running Shoe economic a variety of Elegant and stable packaging , nike rosherun NM mens trainers 631749 701 sneakers shoes CLEARANCE , Mens HARD COURT HI Brown Leather Trainers BB6781Nike Roshe One Hyp BR Breathe Hyperfuse 833125 700 volt 3M men running shoesMan/Woman ASICS GEL-Mai - White - Mens Adequate supply and timely delivery special promotion Good quality , NIKE CORTEZ BASIC LEATHER OG "FORREST GUMP" WHITE-RED SZ 9 [882254-164]MENS ASICS GEL CRAZE TR 4 MEN'S RUNNING/SNEAKERS/FITNESS/TRAINING/RUNNERS SHOESNike Air Max LD Zero HTM 'Hiroshi Fujiwara ' - Size 5.5 ( Obsidian / White )Nike Free Running Lunar Chukka PR QS Green Yellow Turquoise 640652-300 10.5 , Hot Mens Slip On Fashion Black Flats Breathable Gommino Moccasin Driving Shoes , Rockport Men's Tailoring Guide Wingtip Shoe - Choose SZ/Color , ECCO Men's Sierra II Oxford Men Boots NEW Size US 13 - 13.5Salvatore Ferragamo Brown Italy Rare Vintage Slip-On Tassel Wingtip Gorgeous 8ENEW Nike Women's Size 7 (Men's 5.5) Zoom Streak LT 3 819038 107 White SneakersK-Swiss 95483-170-M Womens Tubes Millennia CMF Sneaker- Choose SZ/Color.New Balance 1340v2 Running Shoes - Women's Size 10, Grey, Purple & Pink , JARLIF Women's Athletic Tennis Air Running Sneakers Fashion Sport Fitness...Chaco Women's ZX/1 Classic Sandal Black Polyester , WMNS NIKE AIR HUARACHE RUN PRINT (725076 501) SZ: 5 (22CM) , Womens Velvet Floral Embroidery Suede Block Heels Ankle Boots Shoes Pump , Via Spiga Boots Heels Knee High Dark Brown Leather Italy Size 6.5 , Retro Women Lady Real Leather Ankle Boots Cuban Heel Pointy Toe Boots Shoes SizeMatisse Women's Can't Stop Ankle Boot, Natural Textile, Size 8.0 , Womens Lolita Punk Knee High Boots Casual Shoes Platform Mid Heel Zipper Cosplay
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2 - 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.

    NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2 - 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
    NIKE KD PWTR-BRGHT TREY 5 III LNR GRY 749377-002 7817/BLK-DP PWTR-BRGHT CTRS 749377-002 MEN'S SZ: 9~13 db642e2
    Athletic Shoes
    >
    ;