Quentin D. Solano
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Quentin D. Solano in Breaking news,

B. of A. warns the rise of ETFs is distorting the stock market

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Appearances can be deceiving.

The number of passive investors who trade stocks via exchange-traded funds has surged in recent years in what some see as a sign of a dysfunctional market in the making. Strategists at Bank of America Merrill Lynch, led by Savita Subramanian, earlier this week warned in a report that the surge of ETFs is distorting the stock market and making it less efficient in the process. Bank of America Merrill Lynch ETFs currently account for nearly a quarter of U.S. stock-market trading volume versus 76% for individual stocks. Three years ago, ETFs accounted for 20%. Meanwhile, the percentage of equity-fund assets has jumped in the wake of the U.S. financial crisis, rising to 37% in 2017 from 19% in 2009, according to Bank of America. 

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