Despite Market Unease, ETFs continue to provide investors with liquidity and efficient market access when they need it most.
Record Trading Volumes Evidence Liquidity Amid Volatility: European ETF trading volumes surged to over twice the normal volumes. From a 2019 average of $44 billion to between $110 billion and $120 billion (all in USD) from the third week of February (24 February 2020) to 13 March 2020.
Fixed Income ETFs Reflect Real Time Prices: The transparency of on exchange trading has proven valuable to active investors and other market participants during times of stress, since ETFs help establish real-time prices when trading in underlying market is impaired
EAM Crypto Fund; First Quarter Summary
The bottom line is that our crypto fund hedging strategy worked. EAM choose to hedge the coronavirus risk "on time" in February, rather than sell all of our investments because we are long-term investor, and we believe that all of our companies would eventually recover, and create substantial value over the long term. We also began unwinding our CDS hedge from 12 March, and continued to do so everyday thereafter until we completed our exit on the morning of 23rd March.
Therefore, while we incurred mark-to-market losses on our portfolio equal to $2.6 billion, we made over the same amount on the hedges. As of the last report release, we were flat for the year.
By selling the hedge, we generated over $2.6 billion of proceeds, the substantial majority of which we invested in both new and existing investments, which we believe will payoff as markets recover.