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Facing the financial market with increased volatility due to the new pneumonia，Can exchange-traded funds (ETFs) withstand the adverse effects of the market？ The situation is，Despite the sharp fluctuations in stock prices，The bid-ask spread continues to widen in the stock and bond markets，But ETF trading has always been very orderly，and helped achieve price discovery in early March，Refers to the process in which the market price reaches the equilibrium price after dynamic adjustment of information)。Also，The net subscription and net redemption sizes of ETFs vary by asset class，But it has always maintained a moderate level。

ETF trading has always been in order

ETF provides investors with a mechanism to quickly and effectively transfer risks and hedge risks。Under normal market conditions，U.S. dollar-denominated ETF trading volume typically accounts for 25% to 30% of daily U.S. stock market trading volume。But during a crisis，We are seeing seabet casino reviewinvestors turning to ETFs。This is exactly what is happening right now: during the first two weeks of March，The daily trading volume of ETFs has always exceeded 30% of the total transaction amount，Some days it’s even close to 40% (Figure 1)。

Figure 1: In times of crisis，Investors use ETFs to quickly and effectively transfer risks and hedge risks

ETFs aid in price discovery

ETF trading can help market participants faster、More accurately determine market-clearing prices for underlying stocks and bonds。For example，March 9th and March 12th，Before the U.S. Stock Exchange opens，S&P 500 futures down 5%，reached "circuit breaker"，US stock index futures trading suspended as a result。In these two days，Several ETFs tracking the S&P 500 continue to trade ahead of the opening，Its subsequent price changes, which reflect the changing views of market participants, closely correlate with the change in value of the S&P 500 at the open。

(Editor’s note: Click here to check the real-time pre-market/post-market prices of U.S. stock ETFs)

ETF net subscriptions and net redemptions remain at moderate levels

Estimated，In the field of U.S. stock ETFs，There was a net inflow of funds (net subscription) on 8 of the first 10 trading days of this month，A total of 26 billion US dollars (Figure 2)。The vast majority of U.S. stock ETFs use physical trading，Use a basket of securities to subscribe or redeem，instead of cash。Therefore，These inflows require market participants to purchase shares，To seabet casino reviewcreate an ETF portfolio，Thus supporting the basic market。

Figure 2: U.S. equity ETF inflows in the first two weeks of March

Estimated，From March 2nd to March 13th，Three major categories of bond ETFs (government bond ETFs、Investment-grade corporate bond ETFs and high-yield bond ETFs) have net inflows of approximately US$1 billion (Figure 3)。This may reflect a significant widening in credit spreads，Investors pay more attention to the quality of securities。Government bond ETF inflows ($10 billion) exceeded investment-grade corporate bond ETF outflows ($7 billion) and high-yield bond ETF outflows ($1.5 billion) combined。However，Transfers from investment-grade credit exposures are modest，As of the end of January，About $7 billion in outflows from investment-grade corporate bond ETFs，Only 1% of the total assets of these funds.7%。

Figure 3: Within the first two weeks of March，Inflows into government bond ETFs have matched outflows from investment-grade corporate bond ETFs

During the first two weeks of March，High-yield bond ETFs have seen modest outflows，Only $1.5 billion (2% of assets in January.2%）。In fact，The main market activities of high-yield bond ETF include subscription and redemption， Both activities are directly related to high yield bonds。From March 2nd to March 13th，In the high-yield bond space，Subscriptions and redemptions related to its ETFs account for only a small portion of daily trading activity in this asset class (Figure 4)。Even on March 3rd，High-yield bond ETF market trade volume reaches $1.8 billion，seabet appThe total USD transaction volume involved in these subscriptions and redemptions is less than 10% of the total high-yield bond transaction volume。

Figure 4: Primary market trading of high-yield bond ETFs represents only a small portion of high-yield bond trading

Overall，Past two weeks，ETF acts as a safety valve in the stock and bond markets，Allows investors to gain or remove exposure to different asset classes。ETF did not experience large-scale redemptions，It also did not produce any chain reaction in the basic market。

We often hear people say that ETFs are not truly tested。But when the new type of pneumonia is spreading，ETF remains healthy and robust so far。

Source: Sina Finance