Comment on Leveraged and inverse ETFs – the exotic side of exchange-traded funds by Rick Lacaille

Thanks for a great piece on L&I ETFs. One of the additional market stability challenges is that the re-balancing flows are very predictable - in theory this could lead to counter-cyclical liquidity being made available. This is undoubtedly the case when there are security level changes in index funds. However in the case of L&I ETFs, there could also be large flows in the underlying ETF - in other words, creations or redemptions which require the authorised participants to buy or sell the underl