The Rise, Role and Risks of Exchange-Traded Funds
On October 7th, Dr Ananth Madhavan (BlackRock/iShares) gave a largely attended lecture on Exchange-Traded Funds. The world in asset managing is changing. Recent years have seen a variety of financial market developments and innovations, reflecting a broader shift toward passive, index investing. These include the rapid growth of exchange-traded funds (ETF’s), which offer a diversity of exposures across asset classes and geographies. As a consequence, there is increased interest by investors, academics,practitioners and policy-makers in the pricing and trading of these investment vehicles,particularly on less liquid segments of the market. Common concerns include the transmission of liquidity shocks, excess volatility, economically significant premiums/discounts and systemic risk. The talk discussed these issues using factual data and actual case studies. Also was discussed how ETF’s are being used to gain exposure to factors and for tactical uses, and the broader implications of these changes for the asset management industry.
Dr. Ananth Madhavan is managing director and global head of research for iShares Core funds at the world’s largest asset manager BlackRock. In previous positions Ananth Madhavan worked at Barclays Global Investors (BGI) as the global head of trading research and transitions and as a managing director of research at ITG. Ananth Madhavan was a professor of Finance at the Marshall School of Business at the University of Southern California and assistant professor of Finance at the Wharton School of the University of Pennsylvania. He earned his PhD in Economics at Cornell University (1988).