Bringing you live news and features since 2006 


ETFs show increased relevance as they turn 30, says Jason Xavier


Jason Xavier, Head of EMEA ETF Capital Market at Franklin Templeton, has commented on the impact of recent coronavirus-related volatility on ETFs:

“Volatility is a function of investor flows and is driven by human behaviour. Even as market volatility skyrocketed, last week was proof that ETFs have not only enabled the democratisation of asset classes but are also now being actively used as a price discovery mechanism, particularly within fixed income.

“Appreciating market uncertainty in relation to the trading of ETFs is key to understanding the price discovery mechanism ETFs offer – and many investors utilise – during these volatile times. The last few days have seen underlying securities trade at extreme levels and at times, trade limit down during the trading day. During these limit-down periods, trading is halted and price discovery in the underlying securities is limited. In these moments, market uncertainty is at its peak, and the lack of clarity around prices have caused some ETF spreads to widen. However, the ability for ETFs to trade in the secondary market as well as for ETF market makers to set up proxy hedging and correlated pricing models has allowed price discovery and liquidity to be upheld, even during these stressful and uncertain periods. 

“We encourage investors during these extremely volatile times to continue applying their proprietary best practises around trading. These best practises could be to utilise the multiple methods for trading – be that on-exchange via multi-lateral trading facilities (RFQ’s) or over the counter (OTC). Furthermore, these best practices ensure that suitable order types, like limit orders, are utilised should they be executed into volatile intra-day periods.

“Three decades since the inception of the first ETF, the product is now more relevant than ever. As more and more investors embrace its potential and benefits, a new generation of them is already taking full advantage of intentions laid out from yesteryear’s volatile periods.”

Latest News

Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..
Confidence in the continuing strength of bitcoin and Ethereum is driving wider interest in altcoins and other digital assets, according..

Related Articles

Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by