Exchange Traded Funds – Anchor for Market Liquidity

Overview:

ETFs are traded in the market and its prices are dependent on a lot of variables. While popularity and interest are contributing factors, the most important factor is the liquidity of underlying assets. Massive inflows into funds suggest that ETFs and Mutual Fund products hold a large proportion of bonds. Does this mean that the buy side can provide liquidity by holding underlying bonds in these products?

We have examined ETF cases addressing the ETF liquidity concept.

What you will learn:

  • Liquidity characteristics
  • Few market examples
  • ETF fund flows