David Solomon, the Goldman Sachs CEO, said on Thursday that the sale of the markets this month was mostly driven by algo trading.
"Undoubtedly, if we look at last week, the sell-off was also driven by the algorithms that have boosted sell-offs once the volatility has risen." - David Solomon in a recent interview.
Major US indices collapsed earlier this month after investors began selling their shares, a move triggered by fears of rising interest rates, a possible slowdown in global economic growth, and overpriced companies in the technology sector.
Dow Jones is 1000 points down from the summits earlier in the month and the S & P500 has lost 5% of its value. David Solomon stressed that relatively new instruments and assets, such as passive indices and so-called " exchange - traded funds. Part of the examples of new technologies that continue to improve.
Popular exchange-traded funds such as the Vanguard's Total Stock Market ETF have attracted huge capital in recent years. This is one of the passive funds that investors are targeting. The assets managed by the Total Stock Market ETF have expanded from $ 86 billion in October 2017 to an impressive $ 102 billion.
Movement of the Vanguard Total Stock Market ETF for the past five years.
Graphs: Used with permission of Bloomberg Finance L.P.
Source: Bloomberg Finance L.P.
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