【Native Speaker每日综合训练】 【38-C】 一周精选 - ETF

fywqrah

第一次占座啊~我不会说是我因为失眠了......

fywqrah

ETF was launched twenty years ago to track the stock index and was known as spider, which quickly expanded to a large scale.
The reasons why ETF was so successful are cheapness and convenience. It cost 0.09% per year, compared to over 1% of other hedge funds. Investors can find almost any asset to make a fully diversified portfolio.
The investment in industry has yeild a great deal of profit. Also, index-tracking is attractive to fund managers who try to take advantage of big funds with economies of scale.
The disadvantages of ETF exist. A benchmark imitated the trend of ETF and found that it could be less liquid and more exposed to risk. Some providers used swaps to lock the return of the fund.
The issue about synthetic ETFs is widely warned. They were worried about the link between investment bank and ETFs, which could default and result banking risks.
Investors started to vote with their wallet and to invest in physically backed funds. However, ETF will not disappear because derivatives and swaps are still needed.
Another concern is about leveraged ETFs, which has more uncertainties and tends to harm some smart investors.
Innovations on ETF provide more stable and less risky investment choices.