• The large number of ETFs trading today could be responsible for a “flash crash” type of event.
• ETFs discourage companies from filing IPOs (initial public offerings).
• The ETF industry requires more SEC oversight to limit systemic risk.

The Kauffman Foundation report goes so far as to compare the ETF universe with the mortgage crisis. However, the ETFs that concern the creators of the report the most are those with high short interest. The concern arises over what would happen in a short squeeze and the Kauffman report lays out a scenario where ETFs would collapse.

Of course not everyone agrees with this report and David Nadig of IndexUniverse goes so far as to say the report is full of holes and the authors of the report simply don’t understand how ETFs work.

I’m sure there will be more debate and headlines about the Kauffman report in the future.

The Global X Gold Explorers ETF will start trading November 4th, on the New York Stock Exchange under the ticker symbol GLDX. The GLDX will be based on the Solactive Global Gold Explorers Index, which tracks the biggest and most liquid of companies that are active in gold exploration, and will have an expense ratio of 0.65%

You can take a look at SEC filings about the fund here.