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Exchange Traded Funds
Inside this issue
• Steps are being taken to save the industry’s reputation
• Regulators call for better risk advice
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Content
Overview: Investors see positive side after UBS shockwaves
ETFs are struggling under a weight of bad press but use of ETFs increases and product innovation continues apace. The industry is going to have to work with regulators to address growing concerns
Market share: Battling for assets alongside the Big Three
The biggest three ETF providers recognise their market dominance is fragile, especially outside their main market in the US
Commodities: Investor appetite for gold ETPs wanes
Heightened risk aversion and counterparty risk concerns might be behind a fall-off in demand
Industry comment: Remedies can save this tainted barrel
The record is clear: true ETFs have been a tremendous boon to investors, providing transparency, liquidity, diversification, and choice
Regulation: Risk and contagion fears harden views
Even tougher rules may now be on the cards
Emerging markets: Using ETFs to invest brings risk of pitfalls
Emerging markets are looking less a niche opportunity for daring investors and more a must-have in any reasonably balanced portfolio
Distribution: New rules expected to boost retail flows
A proposal from the UK Financial Services Authority is part of a wider trend among global regulators towards fee-based models for advice
Transparency: Regulator calls for better risk advice
The UBS affair has caused the financial industry and the wider world to take a new, not-too-caring look at ETFs
Leveraged & inverse: Short-term trading vehicles face criticism
Leveraged and inverse ETFs might not be suitable for buy-and-hold investors and there are concerns that many do not understand them
Hedge funds: Concern over ETFs’ shorting role
Buying ETFs may facilitate or fund the short positions of hedge funds, especially if that ETF is structured synthetically using swaps
