Exchange traded products

Introducing Exchange Traded Products

Exchange Traded Products – Exchange Traded Funds (ETF), Exchange Traded Commodities (ETC) and Exchange Traded Notes (ETN) are collective investments that seek to return the performance of the index they track.

ETPs are passively managed and can therefore be cheaper than an equivalent Unit Trust, OEIC or Investment Trust.

They either buy the components of an index (physical replication) or are guaranteed its performance by a third party (synthetic replication).

Some seek to outperform an index by applying an arithmetic formula.

ETPs trade like a share and can provide cost-effective access to most countries, regions, sectors and asset classes.

About Exchange Traded Products

 

Easy  –     ETFs are bought and sold like any other share via an online broker.

Liquid  – Trade with multiple market makers during normal market hours with liquidity according to the underlying assets.

Cheap – Low Total Expense Ratio (TER), no Stamp Duty.

Simple – Aim to match the performance of an index.

Scope – Exposure to most countries, regions, sectors, and asset classes.

Diverse – An ETF is as diverse as the index it follows.

Income Generating – Many pay dividends to enable you to build a portfolio for income.

Trade close to NAV – The price of most ETFs closely reflects the value of the assets they hold (net asset value).

Transparent – When you invest you know you should achieve very close to the return of the index the product replicates.

Easy to research – Compare the cost, risk, and return characteristics of different ETFs.

ISA and SIPP eligible – Can be held within wrappers to shield them from income and capital gains tax.

Inside Exchange Traded Products

 

Inside Exchange Traded ProductsElevator Pitch for Index InvestingETF Portfolio Investing Made SimpleWhat do ETFs Invest in?How Much do ETFs Cost?How do ETFs Work?Passive vs ActiveETFs for IncomeWhat are Synthetic ETFs?What are Smart Beta ETFs?How well is Your ETF Performing?Understand ETF Names

Inside Exchange Traded Products

 

Exchange Traded Products are increasingly popular with the DIY investor.

ETP are passive investment funds that track a wide range of indices and provide exposure to different asset classes, in a wide range of industry sectors around the world.

Because they have no fund manager or analysts to support, the cost of ownership of ETPs can be low in comparison to other types of pooled investment and they are simple because they trade on an exchange like a share.

Many brokers allow regular investments and drip feeding into a basket of ETPs can be a cost effective way of building a diverse, and potentially income generating, portfolio.

DIY Investor looks at the different types of exchange traded products available and includes content from issuers and partners to explain how to select the right product for you and how to include ETPs in your investment portfolio.

Elevator Pitch for Index Investing

 

The DIY investor can construct a portfolio of passive investments in line with their risk tolerance.

Indices deliver exposure to most types of investment, home and abroad, with differing volatility and risk profile

If you want a readymade, diversified range of investments without the costs that come with actively managed funds you may find index investing an attractive option; here are five reasons why…..

 

Read more

ETF Portfolio Investing Made Simple

 

Dominique Riedl, founder and CEO of justETF, explains why he thinks ETFs are the right choice for DIY investors and explains how his platform can assist in selecting the right products to build and maintain a balanced investment portfolio.

Taking a DIY approach can be a daunting prospect for those new to investing but, happily, there is a straightforward yet powerful strategy available – passive investing with Exchange Traded Funds (ETFs)

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What do ETFs Invest in?

 

ETFs enable you to construct a diversified portfolio cheaply and easily.

There are five major asset classes to consider when building your ETF portfolio:

 

 

  • Cash
  • Bonds
  • Property
  • Equities
  • Commodities

 

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How Much do ETFs Cost?

 

One of the great advantages of ETFs is that they are a cheap way to invest; cost is a crucial factor in determining your long-term success, so consider the Total Cost of Ownership (TCO) as well as the Total Expense Ratio (TER).

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How do ETFs Work?

 

ETFs enable you to gain diversified exposure to a stock market, sub-sector or asset class by investing in just one cost effective and easily traded product.

ETFs operate just like mutual funds with the big difference that they are listed on the stock market which means that whereas traditional funds can only be bought into or cashed out of once a day, you can trade ETFs whenever you like during normal market hours just like other share.

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Passive vs Active

 

ETFs are most often associated with passive index-tracking strategies, but they have a role to play for investors trying to beat the market, too.

Active investors either pick individual stocks or put their money into funds run by managers who aim to do better than average, or to judge the best times to get in and out of different assets.

ETFs use mechanical rules instead of expensive managers to construct index-following portfolios and cover all mainstream markets and asset classes, making the construction of a diversified, low-cost DIY passive portfolio a realistic prospect for anyone.  

passive vs active

 

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ETFs for Income

 

Years of near-zero interest rates have crushed the income that can be achieved from traditional sources.

ETFs that deliver good dividend yield could be just the answer for those looking to take advantage of new pension freedoms and generate income in retirement.

 

With just a handful of ETFs, you can build a diverse income portfolio, with less risk and because fees are much lower than those of an actively managed fund, you’ll retain more of your income to reinvest or to spend.

Savings Pig

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What are Synthetic ETFs?

 

You would expect an index tracker to actually invest in the same holdings as its index. This is how a physical ETF works and why it returns the same results as the market it mimics.

But synthetic ETFs don’t work this way often because the markets they track are very hard to physically recreate at a reasonable cost; a market may consist of many small and illiquid securities that are very expensive to trade or complexities of tax, time zones and local laws may make it difficult to track some global indices.
ETF Shopping Basket

 

 

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What are Smart Beta ETFs?

 

A Smart Beta ETF aims to deliver the best of both worlds – to beat the market or to match it while taking less risk – precisely what an active investing product would hope to do, yet they follow an index and deliver the advantages of passive investing.

Smart Beta ETFs exploit investing anomalies that are known to have beaten the market over the long term – finding companies that are undervalued, highly profitable or with a long track record of outperformance and creating an index that filters out those that do not fulfil those criteria.
Pension pig

 

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How well is Your ETF Performing?

 

How do you know if an ETF is performing in the way it should and delivering the results you wanted?

How do you compare the likely future performance of different ETFs that track a common index?

Merely looking at its performance over the previous year may not reveal much because markets rise and fall regardless of how well an ETF does its job.

The measure used to assess the performance of an ETF is its ‘tracking difference’ which is one of the most important statistics to consider.

Most ETFs aim to track an index—i.e. they try to deliver the same returns of a particular index; tracking difference is the discrepancy between the performance of the ETF and the performance of the index.

 

1-Year Performance

 

ABC Index                                           8%

ABC Index Tracking ETF                 6.8%

 

Tracking difference                        -1.2%

 

Tracking difference is rarely zero and in most cases the ETF performance is poorer than the index it tracks; tracking difference can be small or large, negative or positive and are caused by the following factors:

 

performance

 

 

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Understand ETF Names

 

ETF names can look complicated, but you’ll soon decode them with our handy guide.

Cryptic names can be off-putting, but they are usually based on a simple logic that can help you understand whether an ETF is right for you; once you know how to read ETF names you’ll be able to target your searches more quickly.
An ETF name is built from keywords that reveal the product’s most important features; there are typically five key components:

Provider – who issued the ETF?

Index – which index does the ETF track?

Regulatory information

Share class – characteristics of the ETF

Additional information – inter alia, domicile, currency, replication method, treatment of income.

 

decipher etf names

 

 

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What Proportion of Active Fund Managers Consistently Beat the Market?

Introducing Moo.la

Costs and Performance of ETPs

Creation and Redemption of ETPs

ETP Structure

Benefits and Risks of ETPs

ETPs at a Glance

Investing Basics: ETFs

Introduction to ETPedia

Active vs Passive Fund Management

Introducing core FX investment strategies – Currencies decoded

The benefits for your investment portfolio – Currencies decoded

How to Invest in FX – Currencies decoded

Introduction to FX – Currencies Decoded

Short and Leveraged ETFs

Getting Started – Saltydoginvestor

Active Investing – Saltydoginvestor

Societe Generale Infinite Turbos

What is an ETF?

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Jan

Active versus passive investing – selectivity required

Henderson Global Investors believes that active management is key to achieving investors objectives

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Jan

How to Easily Decipher ETF Names

ETF names can look complicated, but this handy guide from justETF will help you decipher them

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Dec

Moola Partners with iShares to Deliver Automated Advice

Fintech startup will deliver portfolios of 'Core' ETFs to retail investors and advisers

Read More

12th


Sep

Robo-advice Boost to ETFs

ETF industry to be transformed by the proliferation of digital investment managers or robo-advisers

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Sep

ETFs Versus Old-fashioned Tracker Funds

Which of the two types of passive investing vehicle is right for you? asks Dominique Riedl, CEO and

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Sep

How well is Your ETF Performing?

Tracking difference is the gap between the index and the ETF and here is why

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Sep

Well on Track – DIY Investors ‘Flock’ to Passive Investments

Hargreaves Lansdown sees the number of its clients investing in trackers double

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26th


Jul

Post-Brexit Uncertainty? Consider Some Quality in Your ETF Portfolio

Smart Beta, or Strategy ETFs seek to outperform by adopting a risk factor - here, 'quality'

Read More

6th


Mar

How do ETFs Work?

ETFs enable you to gain diversified exposure to a stock market, sub-sector or asset class

Read More

4th


Mar

Passive vs Active Investing

ETFs have a role to play for investors trying to beat the market as well as passively track it.

Read More

3rd


Mar

What do ETFs Cost?

ETFs can be a cheap way to invest but investors should beware of all costs attached

Read More

3rd


Mar

What do ETFs Invest in?

There are five major asset classes to consider when building your ETF portfolio

Read More

2nd


Mar

What is a Smart Beta ETF?

Smart Beta ETFs aim to beat the market or to match it while taking less risk

Read More

2nd


Mar

What are Synthetic ETFs for?

Synthetic ETFs don’t buy the index they track because they can be very hard to physically

Read More

17th


Feb

High Five: Index Investing for the DIY Investor

Why low cost, passive investing could be the ideal solution for the time poor DIY Investor.

Read More

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Jan

Introduction to ETPedia

ETF Securities educational series on investing in exchange traded products

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Jan

Active vs Passive Fund Management

ETF Securities' Guide to active vs passive fund mangement

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Dec

The Power of Equality

Vincent Denoiseux explains how ETFs can can provide equal-weighted exposure to equity markets

Read More

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Dec

An Elevator Pitch for Index Investing

How the DIY investor can construct a portfolio of passive investments in line with their risk

Read More

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Nov

Introducing core FX investment strategies – Currencies decoded

Core FX investment strategies that underpin currency markets

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Nov

The benefits for your investment portfolio – Currencies decoded

Explaining how investors can include FX as part of their balanced portfolio.

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How to Invest in FX – Currencies decoded

How to Use Exchange Traded Products to access foreign exchange markets

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Introduction to FX – Currencies Decoded

An introduction to the currency markets and the basic elements of currency investing.

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Oct

Neutralising the Market….Safely

Dr Fred Piard - ‘The Lazy Fundamental Analyst’ - introduces his market neutral portfolio

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Oct

Boost Your Returns, Limit Your Risk

Using leveraged trading to reduce capital at risk and protect your portfolio

Read More

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Oct

Constructing an ETF Portfolio

Why DIY investors are increasingly turning to ETFs when constructing their investment portfolio.

Read More

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Passive Investment – Active Selection

With 1300 to choose from, how do you find the right ETF for your portfolio?

Read More

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Short and Leveraged ETFs

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Getting Started – Saltydoginvestor

Introduction to the Saltydoginvestor

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Active Investing – Saltydoginvestor

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Societe Generale Infinite Turbos

Ben Thompson introduces SG's listed structured products

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What is an ETF?

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Oct

ETF Portfolio Investing Made Simple

Dominique Riedl of justETF, explains why he thinks ETFs are the right choice for DIY investors

Read More

6th


Oct

Investing – Start With the end in Mind

DAN Norman gives his thoughts on the best long term strategy for your ISA.

Read More

1st


Apr

Will 2015 be Remembered as the Year of Volatility?

Low oil prices, woes in the Eurozone and wobbles in China have seen markets in turmoil

Read More

4th


Mar

ETFs for Income.

ETFs with good dividend yield could be the answer for those looking for income

Read More

2nd


Mar

High Five: Simple Rules for Successful Investing

FT journalist David Stevenson shares his five rules for successful investing

Read More

27th


Oct

Eight Things To Know About Short and Leverage ETFs/ETPs

S&L ETPs can provide magnified long and short exposure in an efficient product wrapper.

Read More

17th


Jan

Active versus passive investing – selectivity required

Henderson Global Investors believes that active management is key to achieving investors objectives

Read More

15th


Jan

How to Easily Decipher ETF Names

ETF names can look complicated, but this handy guide from justETF will help you decipher them

Read More

14th


Dec

Moola Partners with iShares to Deliver Automated Advice

Fintech startup will deliver portfolios of 'Core' ETFs to retail investors and advisers

Read More

12th


Sep

Robo-advice Boost to ETFs

ETF industry to be transformed by the proliferation of digital investment managers or robo-advisers

Read More

9th


Sep

ETFs Versus Old-fashioned Tracker Funds

Which of the two types of passive investing vehicle is right for you? asks Dominique Riedl, CEO and

Read More

3rd


Sep

How well is Your ETF Performing?

Tracking difference is the gap between the index and the ETF and here is why

Read More

1st


Sep

Well on Track – DIY Investors ‘Flock’ to Passive Investments

Hargreaves Lansdown sees the number of its clients investing in trackers double

Read More

26th


Jul

Post-Brexit Uncertainty? Consider Some Quality in Your ETF Portfolio

Smart Beta, or Strategy ETFs seek to outperform by adopting a risk factor - here, 'quality'

Read More

25th


Jun

Selftrade: ETFs ‘Best’ for Investors

Online broker cuts commission and introduces comparison tool

Read More

6th


Mar

How do ETFs Work?

ETFs enable you to gain diversified exposure to a stock market, sub-sector or asset class

Read More

4th


Mar

Passive vs Active Investing

ETFs have a role to play for investors trying to beat the market as well as passively track it.

Read More

3rd


Mar

What is Leverage?

DIY Investor looks at how margin trading can amplify gains, and magnify losses

Read More

3rd


Mar

What do ETFs Cost?

ETFs can be a cheap way to invest but investors should beware of all costs attached

Read More

3rd


Mar

What do ETFs Invest in?

There are five major asset classes to consider when building your ETF portfolio

Read More

2nd


Mar

What is a Smart Beta ETF?

Smart Beta ETFs aim to beat the market or to match it while taking less risk

Read More

2nd


Mar

What are Synthetic ETFs for?

Synthetic ETFs don’t buy the index they track because they can be very hard to physically

Read More

17th


Feb

High Five: Index Investing for the DIY Investor

Why low cost, passive investing could be the ideal solution for the time poor DIY Investor.

Read More

15th


Dec

The Power of Equality

Vincent Denoiseux explains how ETFs can can provide equal-weighted exposure to equity markets

Read More

10th


Dec

An Elevator Pitch for Index Investing

How the DIY investor can construct a portfolio of passive investments in line with their risk

Read More

27th


Oct

Neutralising the Market….Safely

Dr Fred Piard - ‘The Lazy Fundamental Analyst’ - introduces his market neutral portfolio

Read More

26th


Oct

Boost Your Returns, Limit Your Risk

Using leveraged trading to reduce capital at risk and protect your portfolio

Read More

20th


Oct

The Road to Becoming a D.I.Y. Investor is Paved with Good Intentions

How Saltydog's fund performance analysis helps you make smart investment decisions

Read More

15th


Oct

Constructing an ETF Portfolio

Why DIY investors are increasingly turning to ETFs when constructing their investment portfolio.

Read More

13th


Oct

Passive Investment – Active Selection

With 1300 to choose from, how do you find the right ETF for your portfolio?

Read More

6th


Oct

ETF Portfolio Investing Made Simple

Dominique Riedl of justETF, explains why he thinks ETFs are the right choice for DIY investors

Read More

6th


Oct

Investing – Start With the end in Mind

DAN Norman gives his thoughts on the best long term strategy for your ISA.

Read More

1st


Apr

Will 2015 be Remembered as the Year of Volatility?

Low oil prices, woes in the Eurozone and wobbles in China have seen markets in turmoil

Read More

4th


Mar

ETFs for Income.

ETFs with good dividend yield could be the answer for those looking for income

Read More

2nd


Mar

High Five: Simple Rules for Successful Investing

FT journalist David Stevenson shares his five rules for successful investing

Read More

27th


Oct

Eight Things To Know About Short and Leverage ETFs/ETPs

S&L ETPs can provide magnified long and short exposure in an efficient product wrapper.

Read More

justETF logo 2

 

Best and Worst Country ETFs 2016

 

Best Worst Country ETFs 2016

 

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Best Country ETFs 2016

 

1Brazil124.1%
2Russia103.68%
3Thailand63.96%
4Canada63.07%
5Taiwan55.09%

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Worst Country ETFs 2016

 

1Turkey5.48%
2Mexico15.44%
3Ireland16.06%
4Italy16.76%
5Malaysia22.28%

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Best ETFs 2016

 

Best ETF 2016

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Worst ETFs 2016

 

Worst ETF 2016

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ETF Securities presents the ETPedia video suite. Gain a better understanding of investing in ETPs.

 

 

 

 

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