ETFs — Building Blocks for Portfolio Construction/Allocation

  • ETFs (with their comparatively low volatility) were a catalyst for cautious investing as investors turned increasingly to them to manage risk
  • Bid-ask spreads for ETFs widened in line with the market (other instruments had wider spreads) largely due to increased trading volumes and hedging costs
  • Liquidity deterioration in the bond market encouraged institutional investors to shift to ETFs for fixed-income exposure
  • ETFs provided transparency in bond-market prices when cash bond markets were frozen or difficult to trade in
  •  Exchange-market trading of ETFs accounted for 34% of all cash equity trading in Europe and 41% in the US, compared with daily average trading volumes of 21% and 27%, respectively, in 2019
  • A record USD81.6bn of primary-market trading was reported in iShares European-domiciled ETFs in March 2020, representing a 168% y/y increase that was 155% higher than the trailing 12-month average
  • Goldman Sachs Future Tech Leaders Equity ETF
  • Hartford Schroders Commodity Strategy ETF
  • VanEck HIP Sustainable Muni ETF
  • Xtrackers Emerging Markets Carbon Reduction and Climate Improvers ETF
  • BNY Mellon Ultra Short Income ETF
  • BlackRock Future Climate and Sustainability Economy ETF
  • Goldman Sachs Future Planet Equity ETF

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Acuity Knowledge Partners

Acuity Knowledge Partners

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/