ETFSTrade idea: ETF Volatility - Truths and Misconceptions
In this week’s ETFS Trade idea, we look at the misconceptions around ETFs causing volatility and explain why these are myths. High level observations:
ETFs have been unfairly targeted as the cause of market volatility
ETFs tracking the ASX 200 have successfully stayed in line with the volatility of the benchmark
ETFs can cause movements in the underlying market but so do active funds and investors buying securities directly
In nearly all cases ETFs match the volatility of the market they track and this is what should be expected from an index tracking fund