ETFs and Funds

ETFs - The 3 most popular papers on Savvy Investor

Our most popular ETF papers are those which explore some of the essentials; considering their use an an alternative to indexing, comparing their efficacy against futures and exploring methods of efficient trading. Here are a few of the most popular papers:

1. Should you offer ETFs in your DC plan?

Many defined contributions pensions plans now offer an indexed equity fund. What is the best way for plan sponsors to offer an indexed equity exposure?  This paper from Vanguard considers the merits of offering index exposure via exchange traded funds .

2. Best practices for ETF trading: Seven rules of the road (Vanguard)

Want to trade ETFs like a pro? This 8 page report from Vanguard provides advice for securing efficient pricing of ETF trades. Unsurprisingly, the authors advocate patience and close attention to price. In particular, the authors instruct traders to steer clear of dealing at the open or close of the market, and to give "marketable limit" instructions, rather than impatient market orders.

3. The Big Picture: A Cost Comparison of Futures and ETFs (AIMA)

There are many cases where an asset manager may want to gain exposure to an equity index without buying the underlying stocks. What is the most cost-efficient method of gaining exposure to equity markets for short or medium-term time horizons? This study examines the total costs involved in gaining exposure to the S&P 500 through index futures and via ETFs, based on different objectives and varying time horizons.