Australian Investors Podcast ETF foundations & are we in an ETF bubble?
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Nov 3, 2025 Jess Leung, a portfolio manager at Global X ETFs, dives into the world of ETFs with insights on their structure and risks. She explains how ETFs offer diversification and liquidity while discussing market makers' roles. Jess debunks the notion of an ETF bubble, highlighting that they aren't the root cause of market issues. Key considerations for investors include maintaining an emergency fund and avoiding emotional trading. With a focus on current trends, she notes where money is flowing in the ETF space, particularly towards gold and international equities.
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What An ETF Actually Is
- An ETF is a fund traded on an exchange that gives one-unit exposure to a basket of underlying securities.
- Jess compares ETFs to a party mix that provides instant diversification across many assets.
How ETF Issuers Build The Basket
- ETF issuers aggregate investor money and then buy the underlying securities, often trading at the end of the day.
- Jess describes receiving net inflows and then investing that sum across all fund holdings to create the ETF's portfolio.
Market Makers Enable ETF Liquidity
- Market makers are central to ETF liquidity because they stand ready to buy or sell so trades always have a counterparty.
- Jess calls market makers the largest single contributor to the ETF ecosystem for enabling fluid trading.