The Risks of investment in ETF: the case of Lithuanian pension funds
ENThis paper contributes to the growing literature on the potential risks arising from exchange-traded funds (ETFs). The ETFs are considered as one of the most popular financial innovations in recent decades. The growing size, complexity and scope make this product important for regulators, researchers, scientists, etc. Despite ETFs still being a relatively small part of the whole financial system, they are growing rapidly. This growth can also be seen in the investments of Lithuanian pension funds. Since 2019, when the pension reform was implemented, the part of ETFs in pension funds grew significantly. Therefore, this paper presents an analysis of ETFs as the important investment of Lithuanian pension funds, it also discusses the risks of ETFs. So the aim of this paper is to distinguish possible risks of ETFs which is important for Lithuanian pension funds. The data from the Bank of Lithuania and Bloomberg, the network approach and statistical data analysis are used. The results are important for regulators and supervisors in order to make the right decisions and impact on their operating field. This study provides some useful insights for the future research as well.
