The inside story of how ETFs weathered the March 2020 storm

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Happy new year everyone! We start 2022 with a look back… Emma Boyde and the Financial Times diving into how ETFs work and that it may have well been thanks to the people and relationships within the ETF ecosystem that we “weathered the March 2020 storm”.

Thoughts?

See what Daniel Izzo and Stefan Kaba-Ferreiro from GHCO had to say on the topic.

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As every AP was trying to redeem at the same time, the ETF providers had to restrict negotiation of the custom bond baskets to make sure they didn’t deviate from their index and that they treated everyone fairly. That meant that APs and market makers could get stuck with some bonds, illiquid at the time, that they were unable to trade out of as they redeemed the ETF shares.

Read the full article on ft.com

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