As the ETF landscape continues to evolve, investors can now pick from a lineup of over 1,400 products, gaining cheap and easy access to nearly every corner of the investable universe. And while the space has experienced tremendous growth and success over the years, ETFs are still just scratching the surface of their potential.
Since the industry is still rather young, it is important for investors and financial advisors alike to keep up with the latest research and analysis to stay ahead of the game. The following reports are must-reads for investors of all levels, as they can be instrumental in furthering your ETF knowledge as well as giving you some potentially intriguing portfolio strategies [visit our Thought Leadership Center for more of the latest ETF research reports].
1. Exchange-Traded Funds: Tax Advantages for Shareholders by Invesco PowerShares
Perhaps one of the biggest advantages of ETFs is their tax-efficient structure; exchange-traded products generally maintain lower capital gains distributions than mutual funds thanks to the nuances of the underlying creation/redemption mechanism. Even with a detailed explanation, however, this advantage remains a largely theoretical concept for most investors. In this report, Invesco PowerShares gives a simple yet in-depth explanation of the tax structure and benefits of ETFs.
2. Examining Exchange-Traded Funds by Arnerich Massena
For those looking to get their feet wet in the ETF pool, this publication is an excellent starting place. Contributors Tony Arnerich, Scott Dunbar, JD and Jillian Perkins lay out the basics of exchange-traded funds and ETF investing, highlighting the advantages and many uses of these innovative products.
No one can argue just how far the ETF industry has come since the debut of the first ever exchange-traded fund in 1993. In this publication, Deloitte details the evolution of the industry and discusses how ETFs are likely to increase their share of investment dollars and become the fastest-growing investment product.
4. Transforming the Bond Markets with Fixed Income ETFs by iShares
Though the investment landscape now boasts a lineup of nearly 1,500 offerings, equity ETFs still dominate the space. In this report, contributors Mathew Tucker, CFA and Jennifer Granico explain how fixed income ETFs are still just scratching the surface of their potential and how these products may grow to more than $2 trillion over the next decade.
5. Synthetic ETFs Under the Microscope: A Global Study by Morningstar
One of the most controversial corners of the exchange-traded fund universe is the growing use of “synthetic ETFs” – an investment that essentially mimics the behavior of an ETF through the use of derivatives. Ben Johnson, Hortense Bioy and Joe Garcia-Zarate take a deeper look at these products, exploring how synthetic ETFs actually work, both in theory and in real market practice.
6. Using Equity ETF Flows as a Contrary Leading Indicator by TrimTabs
While ETFs have continued to become more and more popular, there are some who vehemently oppose these products, arguing that ETFs are actually manipulating the markets. This research publication by TrimTabs discusses its intriguing findings about the correlation between equity ETFs and the overall performance of the equity markets.
7. Joined at the Hip: ETF and Index Development by Vanguard
The vast majority of exchange-traded products are those that seek to replicate the performance of an underlying index, some of which include “back-tested” data from before the date the indexes were first publicly available. In this report, Joel M Dickson, Ph.D., Sachin Padmawar and Sarah Hammer examine the implications of the concurrent development of ETFs and the indexes they seek to track.
The call to invest in gold goes out every time the global economies slip, but not all gold ETFs are created equal. The CME Group published a thorough examination of the differences in physically- backed vs. future-based gold funds and which style of investors should explore these options.
9. What Exchange Traded Funds Mean For Smaller Exchange Organisations by 4Asset-Management
As ETFs have grown in popularity with institutional and retail investors alike, the process is still often confusing for first timers. 4Asset Management has created a very comprehensive guide for first-time investors and those looking for information on how to integrate ETFs into their portfolio.
10. ETF Fact or Fiction: Should Large ETF Creations and Redemptions Cause Concern For for Investors? by State Street SPDR
With ETFs reaching their 20th year in the market, they have become essential holdings for some of the world’s largest corporations, leading small investors to worry how having a heavy-handed investor will affect their liquidity. SPDR University put together this quick guide for non-institutional investors looking for information on the creation and redemption process and how it affects them.
11. Portfolio Allocation to Commodities by Teucrium
Commodities may seem like an odd investment strategy for those looking to reduce the volatility of their portfolio, but Teucrium Trading is claiming just that. Experts at the firm explain their logic and findings when commodities are introduced as a hedging instrument in equity portfolios.
12. The Dividends of a Dividend Approach by WisdomTree
Most funds in operation today follow a market capitalization weighted approach, but not all experts agree that this gives investors the best estimate of a company’s or fund’s value. Jeremy Schwartz examines the benefits of weighting a fund by the dividends that individual companies offer investors, instead of how expensive and abundant the stock is.
13. High Yield ETF Behavior in Stressed Markets by BlackRock
With the recent consumer desire for high yield ETFs, many investors are left wondering how closely these funds actually follow their indexes, especially when markets are undergoing a great amount of stress. In this report, Matthew Tucker and Stephen Laipply dig into high yield ETFs, highlighting under which conditions they reach peak performance or bottom out.
Disclosure: No positions at time of writing.