The Ugly Truth About ETFs Is Revealed (In A Footnote)
Heisenberg is going to lose his fucking mind if he here's one more otherwise smart person try to assert that high yield ETFs are more liquid than the underlying assets.
As I've said on more occasions than I care to count, that proposition is a philosophical impossibility.
It makes no fucking sense.
An ETF cannot be more liquid than what it represents. It can pretend to be more liquid, and it can trade that way when everyone is stuck in the proverbial Matrix, but ultimately, corporate bond
Yes. And then yes again.
But so long as the music is playing and central banks keep the liquidity flowing into the market, nobody (almost nobody) cares. What will be the timing or event that really makes a difference?
well this is a little different because HY is more exposed to idiosyncratic event risk than IG or equities
At least on the retail side, aka my side, I imagine almost nobody could tell you the majority of the stocks or bonds held by a given ETF that they have shares in, and only a slightly larger proportion could tell you how that ETF tracks them.
I suppose ETFs that hold government bonds might be an exception. Still, if history has shown me anything, it’s that the best investment strategy is not to know what companies you’re invested in and to never try to time the market by selling ahead of a crash.
Are ETFs are the next CDs .?