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​How ETFs are Transforming Active Management

Eight top papers on ETF use by portfolio managers

According to recent research from BlackRock, ETFs are increasingly being used by investment managers as tools to effectively manage their portfolio objectives. ETF use is expanding rapidly in fixed income, while smart beta ETFs are increasingly being used to manage exposure to selected risk factors. Derivatives users are also using ETFs as an alternative to equity futures.

Below is a selection of eight documents covering the use of ETFs by investment managers. Click the paper title to read more:

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How ETFs are Transforming Active Management (BlackRock)
(This paper is not accessible in certain geographies)
This research by BlackRock provides insights into trends in institutional ETF adoption across asset classes, applications for smart beta ETFs, Bond ETFs, ETF options and more.

The Evolution and Success of Index Strategies in ETFs (FAJ, 2016)
This article challenges a piece by John Bogle (Vanguard founder) in which he discussed the description of how investors use ETF-based index strategies. It also sheds light on why and how ETFs are an important innovation.

ETFs: A roadmap to growth (PwC, 2016)
PwC recently concluded a survey of the global ETF market. This 33-page paper provides insights gained from that survey on key developments which will help drive ETF growth in this coming years - markets, distribution and products.

Exchange Traded Funds (Swiss Finance Institute, 2016)
This paper by Swiss Finance Institute examines exchange-traded funds. It provides a brief overview of the mechanics of ETFs, analyzes passive asset management and surveys the current literature on ETFs.

Exchange-Traded Funds: Made Simple Guide (PLSA, 2016)

This guide by the PLSA helps pension schemes and their stakeholders explore how the index investing landscape has evolved and the potential opportunities that arise to add value to an investment strategy.

The Right Way to Assess ETFs' Liquidity (OppenheimerFunds, 2016)
This paper by OppenheimerFunds serves as a guide for how to assess the liquidity of exchange-traded funds (ETFs).

Inefficiencies in the Pricing of Exchange-Traded Funds (FAJ, 2017)
This paper examines ETF pricing inefficiencies. The author, Dr Antti Petajisto, introduces a novel approach that uses the cross section of prices on a group of similar ETFs to control for stale pricing of the underlying assets.

A Comprehensive Guide to Exchange-Traded Funds (CFA Institute)
This document by CFA Institute Research Foundation takes a detailed look at exchange-traded funds. It explains at ETFs are, some of their benefits and drawbacks, how to implement ETF strategies in portfolio management, and more.

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