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Jane Street Defends ETFs From Claims They Cause Market Stress

  • These funds don’t pose systemic risks, writes market maker
  • In fact, they could discourage panic selling amid volatility
RF NYSE Manhattan

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Investors looking for potential causes of volatility in the debt markets have nothing to fear from exchange-traded funds, according to one of the industry’s largest market makers.

These products have become something of a boogeyman for some debt investors who worry that a mismatch between their liquidity and that of the securities they hold could exacerbate a credit sell-off. But a new report from Jane Street Group concludes that such concerns are unfounded.