CNBC, continuing their series addressing whether or not ETFs are “ticking time bombs,” reached out to the ETF industry for their side of the Kauffman report. In their latest segment Benjamin Fulton, managing director at Invesco PowerShares, is brought in to fight some of the allegations brought about in the report. Ben addresses the short selling, fails, capitalization of business, periods of stress, and the role of ETFs in the flash crash. In addition to Ben’s commentary, Herb outlined some of the input he has received from ETF “insiders” citing:
*ETF sponsors have nothing to do with what happens in the secondary market.
*ETFs are totally transparent
*Concerns about heavily traded ETFs are bogus
Wisdom Tree submitted a few comments noting:
*ETFs simply cannot fail or collapse
*Heavily shorting of ETFs won’t affect them any more than shorting can affect any other stock, as long as the stock lending industry is doing their job.
ETFs mentioned in the segment: iShares Russell 2000 Index (NYSE:IWM)