It's not the ETFs' fault! You don't know them like I do!
Brendan Conway writes that the blame game needs to stop when it comes to ETFs and the bond selloff. Conway writes that the Federal Reserve, hedge fund managers and easily-influenced mutual fund investors would make better targets.
] has countered the argument that bond ETFs made the selloff worse than it needed to be, with iShares data showing that ETFs may have relieved some of the selling pressure, Conway writes.
Conway writes that bond ETFs, especially those that held junk bonds, didn't sell much last spring, with only a small amount of trading activity resulting in the selling individual bonds. In the spring, just $2.3 billion of the iShares junk ETF's sales forced a sale of underlying bonds, while the ETF trading activity made it easier for investors to exit and enter the market, Conway writes.
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