• Metals
    • Gold
    • Silver
    • Palladium
    • Copper
    • Platinum
  • Energies
    • WTI
    • Brent
    • Natural Gas
  • Stocks
    • US
    • UK
    • DE
  • Indexes
    • SPX500
    • NASDAQ
    • RTS
  • Forex
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CAD
    • USD/CHF
    • AUD/USD
  • Cryptos
    • BTC
    • BCH
    • ETH
    • LTC
    • XRP
    • DSH
    • XMR
  • Economic Calendar
  • Home
  • Education
  • Bulletin
  • News
  •  Forum
  • Contact
Menu
  • Home
  • Education
  • Bulletin
  • News
  •  Forum
  • Contact
Facebook Instagram Youtube Telegram
  Register    Login  
It's your trading deskIt's your trading desk
  • Metals
    • Gold
    • Silver
    • Palladium
    • Copper
    • Platinum
  • Energies
    • WTI
    • Brent
    • Natural Gas
  • Stocks
    • US
    • UK
    • DE
  • Indexes
    • SPX500
    • NASDAQ
    • RTS
  • Forex
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CAD
    • USD/CHF
    • AUD/USD
  • Cryptos
    • BTC
    • BCH
    • ETH
    • LTC
    • XRP
    • DSH
    • XMR
  • Economic Calendar

News

  • Home
  • News
  • If a violent downturn strikes the market, new ETF strategies may be vulnerable. Here’s why

If a violent downturn strikes the market, new ETF strategies may be vulnerable. Here’s why

  • Categories News
  • Date April 17, 2026
  • Comments 0 comment
If a violent downturn strikes the market, new ETF strategies may be vulnerable. Here's why

ETF Stress Tests: How funds are showing resilience in the face of uncertainty

New innovation in the exchange-traded fund industry could come at a cost to investors during extreme conditions.

According to MFS Investment Management’s Jamie Harrison, ETFs involved in increasingly complex derivatives and less transparent markets may be in uncharted territory when it comes to violent downturns.

“Those would be something that you’d want to keep an eye on as volatility ramps up,” the firm’s head of ETF capital markets told CNBC’s “ETF Edge” this week. “As innovation continues to increase at a rapid pace within the ETF wrapper, [it’s] definitely something that we advise our clients to be really front-footed about… Lack of transparency could absolutely be an issue if we’re going to start seeing some deep sell-offs.”

His firm has been around since 1924 and is known for inventing the open-end mutual fund. Last year, ETF.com named MFS Investment Management as the best new ETF issuer.

“It’s important to do due diligence on the portfolio,” he said. “Having a firm that has deep partnerships, deep bench of subject matter experts that plays with the A-team in terms of the Street and liquidity providers available [are] super important.”

Liquidity as the real issue?

Harrison suggested the real issue is liquidity, particularly during a steep sell-off.

“We’ve all seen the news and the headlines around potential private credit ETFs. That picture becomes much more murky,” he added. “It’s up to advisors, to investors [and] to clients to really dig in and look under the hood and engage with their issuers.”

He noted investors will have to ask some tough questions.

“What does this look like in a 20% drawdown? How does this liquidity facility work? Am I going to be able to get in? Am I going to be able to get out? And if I’m able to get out, am I able to get out at a price that’s tight to NAV [net asset value], and what’s the infrastructure at your shop in terms of managing that consideration for me,” said Harrison.

Amplify ETFs’ Christian Magoon is also concerned about these newer ETF strategies could weather a monster drawdown. He listed private credit as a red flag.

“If your ETF owns private credit, I think it’s worth taking a look at, kind of what the standards are around liquidity and how that ETF is trading, because that should be a bit of a mismatch between the trading pace of ETFs and the underlying asset,” the firm’s CEO said in the same interview.

Magoon also highlighted potential issues surrounding equity-linked notes. The notes provide fixed income security while offering potentially higher returns linked to stocks or equity indexes.

“Those could potentially be in stress due to redemptions and the underlying credit risk. That’s another kind of unique derivative,” Magoon said. “I would very closely look at any ETF that has equity-linked notes should we get into a major drawdown or there be a contagion in private credit or something related to the banking system.”

Disclaimer

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.


Source link

Previous post

Retail traders pile into Allbirds after odd AI pivot. History shows it won't end well
April 17, 2026

You may also like

108291733-1776260139249-gettyimages-2232243023-298432final.jpeg
Retail traders pile into Allbirds after odd AI pivot. History shows it won’t end well
16 April, 2026
105487657-1538651779020gettyimages-1042680562.jpg
Kering looks to double profits as it unveils ambitious turnaround plan to revive Gucci
16 April, 2026
107343943-1701877114420-gettyimages-1835267152-wm_10586_metgxgdq.jpeg
Goldman Sachs bond traders stumbled as Wall Street rivals thrived: ‘A fire is being lit under’ them
15 April, 2026

Leave a Reply

This comment form is under antispam protection
This comment form is under antispam protection
  Subscribe  
Notify of

Forums

  • Trading Psychology
  • Сryptos
  • Commodities
  • Stocks
  • Forex
  • Market Pulse
  • Trading Ideas
  • COVID-19, How we survived
  • Ecotrading

info@tdesk.pro
  • Home
  • Education
  • Bulletin
  • News
  • Contact
  • Privacy Policy
  • Risk Warning
  • Cookies
Facebook-f Instagram Youtube Telegram

Copyright © 2023 Tdesk. All Rights Reserved.

Login with your site account

No apps configured. Please contact your administrator.

Lost your password?

Not a member yet? Register now

Register a new account

Are you a member? Login now

wpDiscuz