Morley Conn

March 2020, you had major dislocation in some fixed income ETFs across North America.

Now, what happened then during the COVID crisis panic

the underlying cash markets, interestingly enough, the credit markets froze up.

And so you weren't even able to trade much in those markets.

The ETF markets surprisingly provided a lot more liquidity during that time.

So that frozen cash market was kind of static and

Markets weren't really moving when at the same time the ETF market was truly moving.

So there were some thoughts and opinion that those ETFs were trading at certain points at 30% discounts to where the quoted market was in the cash market.

But the cash market wasn't trading anywhere near as much volume, both in Canada and the US, as was the ETF market.

So the true representation at that point in time was the ETF market.

So that 30% discount in NAV is kind of questionable.

And I don't think that that really did exist.

If the cash market was trading as actively, that would have been a narrower spread.

But the market makers and even others participants in the market will come in if there's ever arbitrage opportunities pricing to be had in the ETF space.

There was if you trade it small, but there certainly wasn't given the size that was going through the ETF market at that time.

And there's a lot of competitive market makers continuously posting through automated trading prices in ETFs all the time, guys.

And so you don't see huge arbitrage opportunities day in, day out.

From time to time, there are dislocations in the market and events do occur.

Those are small little windows in time.

My market making desk is constantly working and looking to find new proxies, new price and reference points and new relationships on various ETFs that they trade.