Understanding synthetic ETFs

June 20, 2013

 

Over the past decade the global ETF industry experienced an average growth rate of about 31% per year. This surge in demand has led to significant innovation in ETF offerings, including the introduction of synthetic ETFs. A new Vanguard research paper explains the key characteristics, potential benefits and risks, and costs of these investment vehicles and discusses best practices for synthetic ETF disclosure.

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Additional materials

Notes:

  • All investing is subject to risk, including the possible loss of the money you invest.
  • Vanguard ETF Shares are not redeemable with the issuing Fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

CE credits available for this research paper

 

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