Exchange-Traded Funds

Exchange-Traded Funds, a new book from Risk Books, provides in one handy and accessible volume the complete guide to taking advantage of this global market.

The lure of alpha combined with the ease of an index-like product has made exchange-traded funds (ETF) a potent force in financial markets.

Since the first ETF was launched 15 years ago, their ease of use and benefits to investors have led to exponential growth. Today, 1,000 ETFs, worth more than $700bn, offer an astonishing number of investment choices across a growing range of asset classes for anyone with a brokerage account.

Yet rapid expansion and increasing specialisation make understanding this complex sector – and identifying opportunities in it – a daunting task.

Most ETFs are still passively managed funds that track equity indexes. The newer ones, however, are increasingly complex, often focussing on narrow sub-sectors of the market, non-equity asset classes, or enhanced directional plays. Some allow investors to expand and fine-tune a traditional asset allocation based on core equity exposure; others, such as leveraged or inverse ETFs, are used to improve portfolio risk-adjusted performance.

As such, we must be aware that while ETFs may continue to offer the market valuable investment opportunities, just like with other financial products there are also distinct risks associated with these investments that need to be fully understood.

“What are they?” “How can they be used?” and “What do we need to know to protect ourselves before we invest?” are only a few of the many questions answered by this book.

To effectively wade into ETFs’ increasing complexity, this book opts for a multi-author approach. Gathering many experts gives the reader the benefit of exposure to all aspects of ETF features and use. Never before has this many expert opinions on ETFs been collected in one place.

This book incorporates practitioners’ perspectives on the challenges facing ETF investors as well as their insights on building ETF portfolios using the latest investment trends and strategies.

Topics covered range from the established to the most recent cutting-edge work, making this book a must-have, not only for professionals wanting to brush up on the fundamentals of ETFs, but also for those who are more advanced in their use of these financial products and are looking for an edge in an increasingly competitive market.