Synthetic ETFs Under the Microscope
A new Morningstar report illuminates the key risks, risk mitigants, and rewards associated with synthetic replication ETFs
After closely examining the practices of each of Europe’s largest providers of swap-based ETFs, we have produced a general list of best practices for investors to use as a guide in assessing these various providers’ practices.
We also provide a detailed explanation of the mechanics of the two basic swap models used by providers of synthetic ETFs in Europe: funded swaps and un-funded swaps. Additionally, we have produced comprehensive profiles of each of the providers of swap-based ETFs in Europe. Here, we closely examine the most crucial aspects of these providers’ product structures: the identity of the swap counterparty(ies), the fund holdings/collateral baskets, swap reset policies, disclosure levels, securities lending policies, and swap costs.
Find a copy of the full report HERE
