There is a Bloomberg story about how "LDEM lost more than $730 million (91%) in assets in two days" (Dec 21 to Dec 23) https://www.bloomberg.com/news/arti...hits-a-blackrock-etf-of-sustainable-em-stocks However, the volume in those two days were less than 30k. Can anyone explain to me 1. How (mechanically) this $730 million outflow happened when there was only 30k volume? 2. Why did the ETF rise significantly rather than falling in those two days, opposite to the supply/demand forces? Thanks.
ETF shares can be redeemed for the underlying assets. https://www.investopedia.com/articles/mutualfund/05/062705.asp
This was a redemption from a major investor in the fund. Looked at the stockchart and do not see the share price plunging down 91%. The article was misleading. It should have stated that a majority investor took out their monies reducing investments in the fund to 9%. That is what actually, happened.
Blackrock would have done that one large transaction privately so the volume never occurred on an exchange. The $730 million would have been divided between all the stocks in the ETF which isn't large enough to affect the entire group of stocks.
This is how ARKK share owners can demand individual company shares in exchange for ARKK shares. Then Cathie Wood would have less capital to manage. Like a reverse stock buy back. Outside funds can "sell back" shares to Cathie Wood for TSLA shares etc....
So again how can an ETF lose 91% of its assets .... back in December and still be trading right around the same price currently?
I don’t think they can do it with arrk. I think arrk is actually a closed end fund which is like a mutual fund that trades on the open market. You can’t create/redeem it for the underlying basket
%% Good subject for a book. Hitting some of the high points; [1]Black Rock tried window dressing negative meddling in gun maker business, not good for BR, but guns + ammo makers is a complex markets/ so that life. So really few guns + ammo buyers care about BR window dressing [2]Same principal, one home can sell or buy price all over the map\low volume.So most RE appraisers us 3 comparisons , my RE agenten used a whole page or 2 ;50 sales. {2.777} I made money on black rock's DVY, but average volume then was closer to 777 average day. But i remember a price shock /good thing my plan forbids panic selling + i had my 10 year paper charts. Like IBD founder notes ,''NEVER buy for dividend'' Amen Sometimes dividends may smooth out price shocks, but certainly not all the time LOL]