ETFs' Vulnerability in Market Downturns: Insights From MFS Management

MFS Investment Management cautions that newer ETFs utilizing complex derivatives may face challenges during market downturns. Jamie Harrison, the firm's head of ETF capital markets, highlighted the importance of liquidity, especially in scenarios of steep sell-offs. He stressed that investors should conduct thorough due diligence, particularly concerning ETFs linked to private credit, which could experience mismatches in trading pace. The firm has been in operation since 1924, emphasizing the need for transparency and expert partnerships in managing these investments.