Unboxing ETFs: The Most Popular Investment Products of Recent Decades
Umberto Urso, Co-Founder, Shape Q, Amsterdam
Current Situation
Over the last 30 years, the asset management industry has been disrupted by the growth of exchange-traded funds (ETFs), investment vehicles that passively replicate the performance of an index and can be traded continuously in the stock market. The assets in ETFs are quickly approaching $8 trillion globally. In the U.S., which is at the forefront of this trend, the assets surpassed the $5 trillion mark, amounting to about 17% of the total assets in investment companies. Switzerland is following the global trend. The assets in ETFs are CHF 170.9 billion (January 2021) and they have doubled over the last five years representing today about 13% of the assets in investment funds.
Over 7,700 ETFs are currently present on the market, covering all the way from broad-based indexes like the S&P 500 and the MSCI World to niche investment themes, such as a trade war, cannabis, vegan products, work from home, and COVID-19 vaccines. Just as easily as they can trade a single stock, investors can now trade large baskets of any asset class (stocks, bonds, commodities, etc) using ETFs.
Objective
In this class, will go back to the foundations of ETFs to understand how they work, how they trade, and how they are used. Not only that, we will also discuss critical issues relating to ETFs, such as their impact on market volatility and their liquidity at times of market stress. Moreover, we will introduce participants to recent academic research on the effects of ETFs on the underlying securities in equity and fixed income markets. Additional research will be presented focusing on thematic ETFs – e.g. those giving access to popular themes, such as vaccines and work-from-home – studying their raison d’être and their (as of today) disappointing performance.
Participants will have the opportunity to interact and discuss their views on the contentious issue of passive vs. active investing. We will exchange opinions on the role of ETFs within the Asset Allocation of a wealth management firm.
Target Audience
The Master Class is aimed at professionals in the financial industry who wish to broaden their knowledge capital and deepen their understanding of ETF investing.
SAQ Recertification
This Master Class is an acknowledged SAQ recertification measure for the CWMA, CCoB, Affluent-, SME-, and Individual Client Advisor profile and comprises four learning hours.