In 2024, a record $1.9tn was invested in ETFs, bringing the all-time total to $14.8tn. Although they originated as asset class specific, cross-asset ETFs are now common. As a result, the impact of ETFs on their underlying constituents is an important consideration for any trading strategy. In this report, we summarise a study that examines the impact of ETFs' regulatory disclosures on their underlying over-the-counter (OTC) constituents.

LITERATURE

We review Viet-Dung Doan's paper ‘Exchange-Traded Funds and Transparency in Over-the-Counter Markets,’ which was published in the Review of Finance in March 2025.

QUICK VIEW

The article explores the ways in which exchange-traded funds (ETFs) can affect the prices of the underlying constituents they hold. Amongst others, here are some of the article’s key findings: