Although ETFs held up relatively well in unsettled markets, the recent volatility has led to some misunderstandings about the funds’ inner workings. The ETF business should do more on education.
In fact, BlackRock’s iShares recently said it is launching a new education program to ensure more investors understand how ETFs work.
The role of ETFs “continues to grow in the global capital markets as investors seek efficient, tailored access to different investment exposures,” said Mark Wiedman, global head of iShares at BlackRock, in an open letter to investors. “This rise in prominence has increased focus on how ETFs perform, particularly in stressed markets.” [ETFs Performed Well in Stressed Market: iShares]
During BlackRock’s second-quarter earnings call Thursday, Wiedman said the recent scrutiny of ETFs has shown “we have a lot more work to do in educating clients and other stakeholders about how these vehicles behave [and]what does the current market price actually represent.”