The ETF Handbook, Second Edition: How to Value and Trade Exchange Traded Funds
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More About This Title The ETF Handbook, Second Edition: How to Value and Trade Exchange Traded Funds

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Professional-level guidance on effectively trading ETFs in markets around the world

The ETF Handbook is a comprehensive handbook for using Exchange Traded Funds, designed specifically for institutional investors and professional advisors seeking to improve ETF profitability. While ETFs trade like stocks, they are not stocks—and the differences impact every aspect of their use. This book provides full guidance toward effectively monitoring, analyzing, and executing ETFs, including the technical details you won't find anywhere else. You'll learn how they work, where they fit, and who is using them, as well as the resources that exist to provide access for investors. This new second edition includes updated coverage on how business has moved from niche to mainstream, ETF performance and issuers around the world, and changes to the users of ETFs in the US. The companion website features instructional video, as well as ready-to-use spreadsheets for calculating NAV and IIV.

Most of the literature surrounding ETFs is geared toward individual investors or traders, but this book is written from the professional perspective—complete with the deeper mechanical information professionals require.

  • Learn the analysis and execution methods specific to ETFs
  • Discover why ETFs require a sophisticated level of skill
  • Consider how ETFs perform in different market environments
  • Examine the impact of managed ETF portfolio growth

ETFs are incredibly flexible and valuable tools, but using them effectively demands a more sophisticated skillset, even among professional money managers and traders. Daily volumes and spreads do not tell the full story regarding availability and liquidity, and treating ETFs just like stocks can dramatically impact profits. The ETF Handbook is the professional's guide to the ETF markets worldwide with expert insight on the technical details that matter.

English

DAVID J. ABNER currently leads the European business for WisdomTree Asset Management, an ETF issuer based in New York. During his career, he has built and managed ETF sales and trading businesses at both BNP Paribas and Bear Stearns. He is the author of The Visual Guide to ETFs and The ETF Handbook, both by Wiley.

English

Preface ix

Acknowledgments xv

Introduction xvii

Part One

Introduction to the ETF Market Place 1

Chapter 1

How Did We End Up Here? 5

Chapter 2

Steps for Developing an ETF 32

Chapter 3

Giving an ETF Life in the Markets 50

Part Two

ETF Trading and Execution 69

Chapter 4

Trading Volumes and ETF Liquidity 71

Chapter 5

Volume ≠ Liquidity—Understanding ETF Implied Liquidity 96

Chapter 6

Execution 128

Chapter 7

Market Participants and Their Trading Strategies 155

Chapter 8

Market Structure and ETFs—Protecting Your Portfolio from Flash Crashes 181

Part Three

ETF Valuation 207

Chapter 9

ETFs with Domestic Holdings 209

Chapter 10

ETFs with International Constituents 224

Chapter 11

Fixed-Income and Currency ETFs 240

Chapter 12

Leveraged, Inverse, and Commodity Products 266

Chapter 13

Structure of an ETF 281

Appendix A

Bloomberg ETF Reference Guide 304

Appendix B

ETF Issuers 314

Appendix C

An Overview of Japanese ETF Market 316

Appendix D

An Overview of European ETF Market 322

About the Author 327

Index 329

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