Monday, April 10, 2017

Where Has the Volatility Gone-Part Deux

Last week, we asked a question “Do ETFs really cause the low volatility” in this post

Where Has the Volatility Gone?

Today, CNBC released another article on the same topic. This time, the article features opposing points of view from notable researchers. Some experts agree that the rise of ETFs has caused the volatility to decline

“There’s no one resounding answer to [why we’ve seen] this low volatility,” Repetto, who covers the brokers and exchanges, said Tuesday on CNBC”s “Trading Nation.” But the growth of assets in exchange-traded funds, which largely track indexes, “has had some impact.”
Repetto pointed out that the first quarter of 2017 was the least volatile quarter for the S&P 500 in decades — which is just one among a host of stats showing how anomalous the lack of market movement has been.

While some disagree:

“To a large extent, I disagree that low volatility is being caused by ETFs,” Meziani, the author of three books about exchange-traded funds, told CNBC in a Thursday phone interview.
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