Market antics could force ETF resiliency into new test
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ARK’s Catherine ‘Cathie’ Wood feels confident that the ETF market could handle any issues that come up.
In 2020, the resiliency of exchange-traded funds was on display as the products withstood the market gyrations of the spring. Now, a confluence of forces in 2021 may test ETFs yet again.
For the most part, ETFs were an afterthought in the recent run-up and run-down of stocks (or stonks ) targeted by boosters on the Reddit Inc. forum WallStreetBets last month. But that doesn t mean that ETFs are immune from coordinated action by retail traders or any others. Do ETFs have the mettle to handle a mob without a cascade of unintended consequences?
February 16, 2021
Widely regarded as ‘the father of modern finance’, Eugene Fama’s work is highly regarded in the capital markets. His work is also the basis for Canadian firm SmartBe Wealth’s four new ETFs.
Fama’s work in portfolio theory, asset pricing, and efficient markets eventually earned him the Nobel Memorial Prize in Economic Sciences jointly with Robert J. Shiller and Lars Peter Hansen in 2013. In 2019, the Research Papers in Economics project considered Fama the 9th-most influential economist of all-time.
Needless to say, Fama has quite the resume and it’s not a bad place to start for ETF strategies. The ETFs utilize factor-based strategies, namely momentum and value.
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