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Tuesday, October 04, 2011|
Jaffe Calls ETF Scandal Concerns 'Wildly Overblown'
Fundsters in the exchange-traded mutual fund business facing worried advisors and investors in the wake of recent scandals may want to take a look at Chuck Jaffe's latest column. The MarketWatch columnist opines that the ETF insider trading case with the ex-Goldman trader and the synthetic ETF trading mistakes at UBS have led to "wildly overblown" concerns about ETFs.
"The fact that ETF trades happen independent from the underlying securities has made most observers conclude that trading in these securities is not to blame for events like the Flash Crash," Jaffe writes. "ETFs are the bag -- the vehicle by which the underlying securities are trading. Investors may wind up holding the bag in adverse situations, but it won't be the bag's fault."
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