Visual Guide to ETFs


  • Format: PDF
  • Pages: 257
  • Published Date: 2013


Visual Guide to ETFs 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.


The Visual Guide to ETFs begins with a clear and concise description of ETFs and their differences from mutual funds and closed-end funds. In Chapter 1, you will gain a deeper understanding of the basics of the structure: transparency, exchange listing, tax efficiency, and lower costs. You will also see some interesting statistics about the growth of the products and what the future may bring. Then in Chapter 2, you will find a detailed explanation of how the underlying portfolios of the funds work. The details of asset growth and the creation and redemption process enable readers to more fully understand what is happening as assets move in and out of the funds. This is followed by a deep analysis of the short interest of ETFs in Chapter 3.

In Chapter 4, we start to look at the trading of the products in the secondary markets. We examine trading strategies for positioning the funds in your portfolio and delineate the various market participants and their roles. The Visual Guide to ETFs provides the most in-depth available analysis of the liquidity of ETFs. There is a full explanation of ETF implied liquidity, the implied daily tradable shares, and the completely new and unique ETF basket implied liquidity scale (EBILS). In Chapter 5, there is a detailed accounting of what occurred within the ETF market during the flash crash of 2010.

In Chapters 6 and 7, you’ll see detailed explanations for executing order flow in ETFs and strategies for trading the products. In Chapter 8, we look in depth at the various structures of exchange-traded products and how they can provide very different return results than those from seemingly similar investment exposures. And in Chapter 9, we look at some additional sources of information that are available. Finally, in the Appendix, there is a guide to the numerous Bloomberg functions for analyzing ETFs. The book is packed with more than 200 screens and callouts highlighting key points and important terminology for investors.


  • Characteristics of Modern Investment Products
  • Understanding How ETF Portfolios Work: The Primary Markets
  • Understanding the Short Interest of ETFs
  • Trading and Liquidity of the ETF Markets: The Secondary Markets
  • ETFs and the Flash Crash
  • How to Execute Orders in ETFs
  • Examining ETF Trading Strategies
  • Product Labeling and Structural Impact
  • Where to Find ETF Information