Do ETFs Increase Volatility?Do ETFs Increase Volatility?Due to their low trading costs, exchange‐traded funds (ETFs) are a potential catalyst for short﹉orizon liquidity traders. The liquidity shocks can propagate to the underlying securities through the arbitrage channel, and ETFs may increase the...
Do ETFs Increase Volatility? Itzhak Ben-David Fisher College of Business, The Ohio State University, and NBER Francesco Franzoni University of Lugano (USI) and the Swiss Finance Institute Rabih Moussawi Villanova School of Business, Villanova University
Do ETFs Increase Volatility? Due to their low trading costs, exchange‐traded funds (ETFs) are a potential catalyst for short﹉orizon liquidity traders. The liquidity shocks can propagate to the underlying securities through the arbitrage channel, and ETFs may incre... I Ben-David,F Franzoni,...
investment-grade corporate bonds.ETF outflows and arbitrage mechanism drive liquidity commonality.Mutual and index fund ownership do not induce liquidity co-movement.Corporate bond mutual funds differ from ETFs in liquidity management.High-yield bonds exhibit muted response to market-wide liquidity shifts...
Crypto exchanges and financial institutions also need liquidity to increase market participation, which is where liquidity partners (LPs) like AlphaPoint Global come in. AlphaPoint Global provides liquidity solutions that help make digital assets more convenient and accessible for everyone. By partnering ...
The liquidity of these assets depends on factors such as market conditions, trading volumes, and the specific terms of the investment. Mutual funds and ETFs pool investors’ money to invest in a diversified portfolio of stocks, bonds, or other financial instruments. These funds can be bought or...
The fund cites the risk that the managers' picks might underperform or even lose money, the general risks associated with investing in stocks, liquidity risk arising from the fund’s inability to sell certain investments in a timely manner and risks arising from non-U.S. investments, including...
When asked to explain its decision, ChatGPT said, “When selecting ETFs for a multi-asset portfolio, investors and wealth managers typically consider a range of factors, including diversification, risk management, cost efficiency, liquidity, and historical performance. ...
LiquidityLess liquid than ETFsHighly liquid ProsEasy for dollar-cost averaging, automated reinvestment of dividendsIntraday trading flexibility including the ability to put in stop losses or limit orders for managing risk, can be bought in individual shares for price accessibility ...
LiquidityLess liquid than ETFsHighly liquid ProsEasy for dollar-cost averaging, automated reinvestment of dividendsIntraday trading flexibility including the ability to put in stop losses or limit orders for managing risk, can be bought in individual shares for price accessibility ...