ETFs are becoming a serious problem for the markets

The Bank of America warned that record-sized funds targeted to index funds could cause a serious problem.
The great popularity of this kind of passive investment schemes may lead to liquidity problems, alarmed by the financial institution.
According to the bank's report, the real stock available for S&P 500 components can be seriously overestimated.
Ultimately, this can lead to more serious fluctuations in stock markets, especially in times of decline, given that a company, a sector or the market as a whole is affected by one or another factor.
Passive index funds have become particularly popular among investors. They are currently managing funds of over $4 trillion, the report said.
The report of the financial institution also advises individual investors to target more under-valued parts of the market, and it is important to overtake index fund managers when it is time for them to rebalance their portfolios.
The other problem that emerges is that when the number of sellers exceeds the number of buyers seriously, the liquidity problem will result in a more severe fall in the indices.