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Big Market Players Are Loving ETFs Even as They Fear the Fallout

  • Survey finds a third of institutions use ETFs more after Covid
  • Biggest concern remains impact on stock prices and volatility

Large institutions have jacked up their usage of exchange-traded funds since the Covid crash -- even as they fear these investing tools are fueling market volatility.

About a third of institutional traders surveyed by Keefe, Bruyette & Woods said they’re embracing ETFs more in the wake of the March 2020 stock collapse, which sparked a deleveraging wave like no other across the financial system.