Tag Archives

One Article


Asset Management For Everyone? ETFs Make It Possible

Posted by on

Asset management for everyone? ETFs make it possible you are the stars in the marketing departments of the money houses: passive investment products, all preceded the exchange-traded Index Fund (exchange traded funds, ETFs). They have become a real bestseller. Because they offer much of what investors desire. They are cheap, easily constructed and are transparent so at least the catchy sales arguments for these products. Granted the secret of success of the ETF, the original idea was simple and ingenious: because hardly a Fund Manager managed over time to generate a better return on its benchmark index, ETF should this benchmark standardized so one on one, depict. Advantages: The cost for such a fund tend to zero, because no highly specialised fund management is necessary.

In addition, that such a fund never worse can evolve, as the benchmark index itself. Disadvantage: A constructed such an ETF can never reach a higher return than the benchmark index. In the success secret of the ETF was this design. In contrast to an actively managed fund, the ETF could distinguish themselves quickly. Instead of 2%, only 0.25% fell running costs and often the return from the ETF was higher than that of active funds. The success put on generic and has an explosive expansion of the product universe resulted. Is not equal to ETF ETF in practice investors today are facing the problem that the ETFs now a seemingly impenetrable jungle of product occurred.

This is demonstrated by the increase of the product terms for Exchange-traded funds. In addition to ETF still ETC (Exchange traded commodities) are exchange traded products (ETPS) and exchange trade notes (ETN). The number of each products within this group is growing rapidly. In the rhythm of the week, new passive products are developed by the creative departments of the banks. The second and third generation products are long but not so simple, transparent and inexpensive as their ancestors. Let’s take for example some ETFs under the magnifying glass on the BRIC countries Put (Brazil, Russia, India, China). For the BRIC countries, there are several papers which are differently designed but all. So some ETFs, set others only on 40 companies to 50, to depict the BRIC countries. The weighting of the countries varies greatly. Brazil is weighted with 39% in other Russia with 15 to 36% in some ETFs with 18%. These differences result in some significantly different rates. Conclusion: investment with ETF makes sense nevertheless ETFs very well suited for investment from 30,000 up to 3 million euro. Even for a such assets usually eight to twelve ETFs enough useful for structuring the portfolio. Here, especially wide markets (stock indices, commodities, bonds) are covered with the passive funds. This is implemented with one time equipment or with a ETF savings plans into practice. It is, however, useful to construct an individual ETF Portfolio larger assets. Its composition and weighting should be checked every six months. Order the publication on the Internet at or by phone at 030 28 88 17 20.