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Will ETF Liquidity Cause the Next Market Meltdown?

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ETFs have been at the corner of the passive vs. active debate. As products become more obscure and hold more assets, liquidity has become a major investor concern. However, we are much less concerned about the liquidity for three major reasons: ETFs are still small in comparison to their underlying markets, the larger ETFs have ample liquidity in the secondary market, and trading volume has tended to increase during market stress.

Ned Davis Research | ETF Selection | Highlights | Weekly

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