FYI: Liquidity concerns for exchange-traded funds pop up occasionally, such as if ETFs trade more than their underlying securities, or when share price and net-asset value deviate.
The poster child for these concerns is the high-yield bond, says Michael Iachini, vice president, head of manager research at Charles Schwab. Some individual high-yield bonds can be hard to trade, but popular ETFs like iShares iBoxx $ High Yield Corporate Bond ETF (HYG) have very strong volume. That’s caused worries about excessive liquidity in the secondary market, where most retail and financial advisors trade ETFs, compared to the primary market, where authorized participants create or redeem the actual ETFs.
Regards,
Ted
http://www.fa-mag.com/news/beware-of-liquidity-issues-in-etf-market-34254.html?print
