Standardized commodity futures contracts may also contain provisions for adjusting the contracted price based on deviations from the "standard" commodity, for example, a contract might specify delivery of heavier USDA Number 1 oats at par value but permit delivery of Number 2 oats for a certain seller's penalty per bushel.
Inverse ETFs are constructed by using various derivatives for the purpose of profiting from a decline in the value of the underlying benchmark. It is a similar type of investment to holding several short positions or using a combination of advanced investment strategies to profit from falling prices.
Many inverse ETFs use daily futures as their underlying benchmark. A leveraged inverse bear ETF fund on the other hand may attempt to achieve returns that are -2x or -3x the daily index return, meaning that it will gain double or triple the loss of the market.
Leveraged ETFs require the use of financial engineering techniques, including the use of equity swaps , derivatives and rebalancing , and re-indexing to achieve the desired return. The rebalancing and re-indexing of leveraged ETFs may have considerable costs when markets are volatile. Investors may however circumvent this problem by buying or writing futures directly, accepting a varying leverage ratio.
The re-indexing problem of leveraged ETFs stems from the arithmetic effect of volatility of the underlying index. The index then drops back to a drop of 9. The drop in the 2X fund will be This puts the value of the 2X fund at Even though the index is unchanged after two trading periods, an investor in the 2X fund would have lost 1.
This decline in value can be even greater for inverse funds leveraged funds with negative multipliers such as -1, -2, or It always occurs when the change in value of the underlying index changes direction. And the decay in value increases with volatility of the underlying index.
The effect of leverage is also reflected in the pricing of options written on leveraged ETFs. The impact of leverage ratio can also be observed from the implied volatility surfaces of leveraged ETF options. The decision concerns two potential products: ETFs have a reputation for lower costs than traditional mutual funds.
This will be evident as a lower expense ratio. However, this needs to be compared in each case, since some index mutual funds also have a very low expense ratio, and some ETFs' expense ratios are relatively high. An index fund is much simpler to run, since it does not require some security selection, and can be largely done by computer. Not only does an ETF have lower shareholder-related expenses, but because it does not have to invest cash contributions or fund cash redemptions, an ETF does not have to maintain a cash reserve for redemptions and saves on brokerage expenses.
Over the long term, these cost differences can compound into a noticeable difference. Because ETFs trade on an exchange, each transaction is generally subject to a brokerage commission. Commissions depend on the brokerage and which plan is chosen by the customer. Generally, mutual funds obtained directly from the fund company itself do not charge a brokerage fee. Thus, when low or no-cost transactions are available, ETFs become very competitive.
The cost difference is more evident when compared with mutual funds that charge a front-end or back-end load as ETFs do not have loads at all. The redemption fee and short-term trading fees are examples of other fees associated with mutual funds that do not exist with ETFs. Traders should be cautious if they plan to trade inverse and leveraged ETFs for short periods of time.
Close attention should be paid to transaction costs and daily performance rates as the potential combined compound loss can sometimes go unrecognized and offset potential gains over a longer period of time. ETFs are structured for tax efficiency and can be more attractive than mutual funds.
This can happen whenever the mutual fund sells portfolio securities, whether to reallocate its investments or to fund shareholder redemptions. These gains are taxable to all shareholders, even those who reinvest the gains distributions in more shares of the fund. In contrast, ETFs are not redeemed by holders instead, holders simply sell their ETF shares on the stock market, as they would a stock, or effect a non-taxable redemption of a creation unit for portfolio securities , so that investors generally only realize capital gains when they sell their own shares or when the ETF trades to reflect changes in the underlying index.
In most cases, ETFs are more tax-efficient than conventional mutual funds in the same asset classes or categories. An important benefit of an ETF is the stock-like features offered. A mutual fund is bought or sold at the end of a day's trading, whereas ETFs can be traded whenever the market is open. Since ETFs trade on the market, investors can carry out the same types of trades that they can with a stock.
For instance, investors can sell short , use a limit order , use a stop-loss order , buy on margin , and invest as much or as little money as they wish there is no minimum investment requirement. Covered call strategies allow investors and traders to potentially increase their returns on their ETF purchases by collecting premiums the proceeds of a call sale or write on calls written against them.
Mutual funds do not offer those features. New regulations were put in place following the Flash Crash , when prices of ETFs and other stocks and options became volatile, with trading markets spiking : These regulations proved to be inadequate to protect investors in the August 24, flash crash,  "when the price of many ETFs appeared to come unhinged from their underlying value".
ETFs were consequently put under even greater scrutiny by regulators and investors. A non-zero tracking error therefore represents a failure to replicate the reference as stated in the ETF prospectus. The tracking error is computed based on the prevailing price of the ETF and its reference. Tracking errors are more significant when the ETF provider uses strategies other than full replication of the underlying index. Some of the most liquid equity ETFs tend to have better tracking performance because the underlying is also sufficiently liquid, allowing for full replication.
ETFs that buy and hold commodities or futures of commodities have become popular. The commodity ETFs are in effect consumers of their target commodities, thereby affecting the price in a spurious fashion. A synthetic ETF has counterparty risk, because the counterparty is contractually obligated to match the return on the index. The deal is arranged with collateral posted by the swap counterparty. A potential hazard is that the investment bank offering the ETF might post its own collateral, and that collateral could be of dubious quality.
Furthermore, the investment bank could use its own trading desk as counterparty. ETFs have a wide range of liquidity. Some funds are constantly traded, with tens of millions of shares per day changing hands, while others trade only once in a while, even not trading for some days.
There are many funds that do not trade very often. This just means that most trading is conducted in the most popular funds. In these cases, the investor is almost sure to get a "reasonable" price, even in difficult conditions. With other funds, it is worthwhile to take some care in execution. This does not mean that less popular funds are not a quality investment.
This is in contrast with traditional mutual funds, where everyone who trades on the same day gets the same price. Bogle , founder of the Vanguard Group , a leading issuer of index mutual funds and, since Bogle's retirement, of ETFs , has argued that ETFs represent short-term speculation, that their trading expenses decrease returns to investors, and that most ETFs provide insufficient diversification.
He concedes that a broadly diversified ETF that is held over time can be a good investment. ETFs are dependent on the efficacy of the arbitrage mechanism in order for their share price to track net asset value. The trades with the greatest deviations tended to be made immediately after the market opened.
The tax advantages of ETFs are of no relevance for investors using tax-deferred accounts or indeed, investors who are tax-exempt in the first place.
In a survey of investment professionals, the most frequently cited disadvantage of ETFs was the unknown, untested indices used by many ETFs, followed by the overwhelming number of choices.
Some critics claim that ETFs can be, and have been, used to manipulate market prices, including having been used for short selling that has been asserted by some observers to have contributed to the market collapse of From Wikipedia, the free encyclopedia. List of American exchange-traded funds. List of exchange-traded funds. Archived from the original on June 10, Securities and Exchange Commission.
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Archived from the original on January 9, Archived from the original on September 27, Archived from the original on December 24, Archived from the original on June 6, Gli ETF sono strumenti finanziari a gestione passiva. Differentemente dai fondi comuni, che valorizzano solitamente a fine giornata, gli ETF vengono scambiati in borsa in negoziazione continua, proprio come avviene per le azioni e di conseguenza il loro valore varia continuativamente nell'ambito della stessa giornata di contrattazioni.
Al 30 giugno , su Borsa Italiana risultavano negoziati  ETF, tale numero fa di Borsa Italiana una delle principali borse europee per questo tipo di strumenti. Gli ETF possono pagare dividendi , infatti proprio come i fondi comuni si dividono in ETF a distribuzione con pagamento di dividendi periodici o ETF ad accumulazione con il reinvestimento dei dividendi. Gli ETF sono strumenti molto liquidi, per importi fino a 1 euro la negoziazione avviene agevolmente sul mercato di Borsa.
A completare l'offerta esistono anche ETF specifici per la speculazione borsistica giornaliera: Comunque negli ultimi anni gli ETF stanno diventando un grande punto di forza dei mercati internazionali. Nonostante lo stile di gestione passivo, negli anni passati gli ETF hanno conseguito mediamente risultati migliori dei fondi attivi. Gli ETF generalmente investono in titoli fisici totalmente, o per buona parte ne esistono anche basati sull'uso di contratti swap.
Esattamente come gli ETF, gli ETC e gli ETN sono negoziati in Borsa come un comune titolo azionario ; gli investitori, tramite il proprio intermediario, possono quindi in qualunque momento della giornata borsistica dalle 9.
Da Wikipedia, l'enciclopedia libera.