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Visual Guide to ETFs

Book Description

A visual guide to one of the fastest growing areas in trading and speculation

An Exchange-Traded Fund (ETF)—a security that tracks an index, a commodity, or a basket of assets like an index fund, but trades like a stock on an exchange—offers diversification of an index fund, as well as the ability to sell short, buy on margin, and purchase as little as one share. Giving financial advisors, institutional asset managers, traders, and other investment professionals the information they need to get the most out of ETF opportunities, the Bloomberg Visual Guide to ETFs covers the subject in a highly visual manner.

Starting with an introduction to ETFs, the book looks at where they fit within the world of investment products, how they are structurally differentiated from other products and among themselves, relevant tax considerations, global listings, growth on a global basis, evolution of the product set, and other topics. Also looking towards the future, the text provides information on finding ETFs—including fund searches, fund news, measuring and valuing ETFs, evaluating their correlation to the underlying sector or commodity being tracked, and more. As a result, the book is a resource not just for understanding ETFs today, but for taking advantage of what's to come.

  • Presents critical information in an easy-to-absorb visual manner

  • Serves as a reference, presenting information in easily digestible pieces for easy access

  • Author David Abner is a well-known ETF developer expert

  • Incorporates quizzes, charts, and other accessible features to bring the material to life

ETFs are multivarious, complex instruments that offer unique rewards, and the Bloomberg Visual Guide to ETFs brings together everything that people working with them need to understand to cash in.

Table of Contents

  1. Cover
  2. Visual Guide to ETFs
  3. Dedication
  4. Copyright
  5. Contents
  6. List of Exhibits
  7. How to Use This Book
  8. Preface
  9. Acknowledgments
  10. Chapter 1: Characteristics of Modern Investment Products
    1. Four Types of Investment Products
    2. Transparency
    3. Exchange Listing
    4. Tax Efficiency
    5. Structural Ramifications and Taxation
    6. Summary
  11. Chapter 2: Understanding How ETF Portfolios Work: The Primary Markets
    1. Utilizing Shares Outstanding
    2. Understanding the ETF Data
    3. Creation and Redemption
    4. Understanding ETF Values
    5. The Best Trading Indicators
    6. Funds with Difficult-to-Trade Underlying Baskets
    7. ETF Spreads and Prices in the Market
    8. Summary
  12. Chapter 3: Understanding the Short Interest of ETFs
    1. The Lending Tree of Short Positions
    2. Short Scenario 1: Short Covering
    3. ETF Borrow Rates Are a Function of the Underlying Basket
    4. Short Scenario 2: Redemption en Masse
    5. Understanding Short Interest in a Popular ETF
    6. Summary
  13. Chapter 4: Trading and Liquidity of the ETF Markets: The Secondary Markets
    1. Understanding ETF Liquidity
    2. Average Daily Trading Volume of an ETF
    3. Related Derivatives for Providing ETF Liquidity
    4. Correlated Trading Vehicles for Providing ETF Liquidity
    5. ETF Basket Liquidity: Implied Daily Tradable Shares
    6. The ETF Basket Implied Liquidity Scale (EBILS)
    7. Summary
  14. Chapter 5: ETFs and the Flash Crash
    1. Closer Look at the SEC-CFTC Report Findings
    2. Can This Happen Again?
    3. Summary
  15. Chapter 6: How to Execute Orders in ETFs
    1. A Story about Large Block Trading
    2. Types of Trade Executions
    3. Trade Advertisement
    4. Summary
  16. Chapter 7: Examining ETF Trading Strategies
    1. Negotiating Your ETF Trading Prices
    2. Executing Daily Rebalances in Low-Volume ETFs
    3. Assessing the Impact of an ETF Trade
    4. A Tale of Two ETF Trades
    5. Summary
  17. Chapter 8: Product Labeling and Structural Impact
    1. Impact of Structure
    2. A Discussion of Taxation Issues
    3. Booking and ETF Platform Execution Issues
    4. ETF Trade Settlement—Fails to Deliver
    5. Summary
  18. Chapter 9: Where to Find ETF Information
    1. ETF Data for Institutions and Professional Traders
    2. Summary
  19. Appendix: Bloomberg Functionality Cheat Sheet
    1. Underlying ETF Data
    2. ETF Descriptions and Fund Searches
    3. Fund and Portfolio Analytics
    4. Trading Data
    5. Additional Tools
  20. Index