ETF liquidity 'illusion' alarms managers after volatility spike

clock

Fund managers have voiced concerns ETF trading is increasingly driving the direction of the wider market and exacerbating recent slumps, raising questions over the use of the products in less liquid securities.

The spike in volatility seen last month has drawn attention to the increasingly prominent role played by exchange-traded funds in less liquid asset classes such as high yield debt and emerging markets. iShares took the unusual step of issuing an open letter to investors last week, in which it noted the “increased focus on how ETFs perform, particularly in stressed markets”. The provider said ETFs increasingly represent “the true market” in some areas, and noted record levels of daily trading in its US high yield bond and emerging market equity products. But other investors said ETF...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Investment

Aegon AM launches UK-domiciled global income fund

Aegon AM launches UK-domiciled global income fund

In response to client demand

clock 27 June 2025 • 1 min read
CCLA's Charlotte Ryland and Joe Hawkes: How to position for the end of the 90-day tariff pause

CCLA's Charlotte Ryland and Joe Hawkes: How to position for the end of the 90-day tariff pause

Focus on quality

Charlotte Ryland and Joe Hawkes
clock 26 June 2025 • 4 min read
Almost half of UK investors using social media for financial advice

Almost half of UK investors using social media for financial advice

Many sources 'unregulated and unverified’

Sorin Dojan
clock 23 June 2025 • 2 min read
Trustpilot