Michael Steinhardt, hedge fund legend and chairman of WisdomTree Investments (NasdaqGM: WETF), on Thursday said there is no evidence that exchange traded funds are pushing around the prices of individual stocks.
“I think you would have to prove that,” Steinhardt said during a CNBC interview when asked if trading in ETFs is driving the prices of underlying stocks, rather than the other way around.
“And if there are certain limited instances of that occurring, then that can be dealt with. It’s really not the major point of ETFs,” he added. “ETFs have grown more quickly than any other form of investment management now for a long time, and with good reason.”
ETFs were in the spotlight Wednesday as a Senate subcommittee held a hearing on the impact of the financial products on the market. ETFs are baskets of securities that trade like individual stocks.