Visual Guide to ETFs

Transparency

When transparency is mentioned as a defining characteristic, it sometimes takes a minute of personal product inventory for an investor to realize that there is really no other fund product available that provides a daily accounting of exactly what the fund holds. Before ETFs, portfolio holdings were typically only released on a quarterly or semiannual basis. ETFs make their portfolio publicly available daily. This has a host of ramifications, from eliminating style drift to creating the basis for an arbitrage that keeps the trading price close to fund value. One would have thought transparency should have been the gold standard in investment products from their very beginning, but it does not seem as if investors learned anything ...