Bringing you live news and features since 2006 

Denise Krisko, Vident

VIA says many new ETF launches on hold until volatility calms down

RELATED TOPICS​

The volatility of recent weeks has hit the number of firms launching ETFs, says Denise Krisko (pictured), president of Vident Investment Advisory (VIA), a firm that offers sub-advisory services to the ETF industry, advising on 35 ETFs with an aggregate total of around USD3 billion in assets under management.

The volatility of recent weeks has hit the number of firms launching ETFs, says Denise Krisko (pictured), president of Vident Investment Advisory (VIA), a firm that offers sub-advisory services to the ETF industry, advising on 35 ETFs with an aggregate total of around USD3 billion in assets under management.

Last year saw the launch rate of new ETFs in the US held up by the SEC’s governmental shutdown, although the passing of the ETF rule in September was expected to set the industry off on an expansionary course again.

The third week in March typically includes rebalances related to the quarterly expiration of a number of futures and options contracts, but index providers including S&P announced that it wouldn’t rebalance with markets proving so volatile.

“The reasons for that are understood and not surprising,” Krisko says. Indices as large as the S&P 500 could be in circuit breaker territory with volatility in recent markets but even smaller indices have experienced slight areas of illiquidity which have been amplified in the current volatile environment.

“I don’t think many people realise that equity ETFs have done what they were designed to do in spite of all the volatility and downward movement in stock markets globally,” Krisko says. 

“Across the ETFs on which we sub advise for the most part while we have seen increased volume, we have seen very little redemption activity which tells me that a lot of the illiquidity and volatility is being absorbed by the ETF trading flows.

“We have seen spreads widen a bit,” Krisko says. “Although not egregiously on the ETFs we sub advise. For the most part, spreads have widened less than the underlying securities, due to the creation/redemption process allowing the arbitrage function to stay in place.

“It is a challenging time to launch an ETF now with so much uncertainty. Some of our clients that have been planning are concerned about potential investors losing interest and we did have two funds that have delayed launches which will come in the near future as we don’t know how long this will go on.”

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

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...
Cryptocurrencies
Matteo Greco, Research Analyst at Fineqia International writes that bitcoin (BTC) ended the week at approximately USD52,150, showing a notable...
US Distribution Awards trophies
The winners of the first US ETF Distribution Awards at the Exchange conference, hosted by ETF Express and sponsored by...
Thomas Bonville, Clear Street
Just over a year ago, Thomas Bonville joined New York-based, prime brokerage Clear Street as managing director, head of derivative...
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