Your money will be save, because the assets are separated in a other entity. Details below.
What happens if my fund company fails?
Your money is safe. Under the Investment Company Act of 1940, which governs the industry, each fund is set up as an individual corporate entity, with its own board of directors. Essentially, your fund hires the fund company to manage its assets. If the company were to file for bankruptcy, its creditors would not be able to touch the funds’s assets. And the fund’s directors could immediately hire a new manager, pending shareholder approval.
For index ETF’s: a feedback loop with decreasing prices of individual large cap stocks causing a decrease of the index, then a selling in the corresponding ETF’s, then in the underlying stocks, and so on. So far, we have only seen the positive side of this effect (buy -> buy -> buy -> …).
The market maker is hiding just when there are plenty of sellers and no significant buyer (already had such situations).
Sure, but the ETF’s make the loop a bit longer since people don’t buy or sell stocks directly. These additional steps are perhaps a good thing (could help stabilizing the market) or a bad thing (could contribute to the inertia in a selloff). We need to see during the next bear market how it works in practice…