The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

ETF Watchers Weigh Innovations

Advisors and analysts praised actively managed exchange-traded funds but said investors should be careful with certain innovative offerings.

They said the tax and trading advantages of index ETFs will carry over to the active versions but noted that some new ETFs are more appropriate as satellite holdings than as core holdings.

"If it's a good wrapper or index, it maybe even a better wrapper for active," said Jim Wiandt, president of Index Publications and

Richard Ferri, ceo of Portfolio Solutions, welcomed ETF innovation but warned that leveraged ETFs can be dangerous, as they carry twice the volatility of the market. He said they should not be core holdings. Rydex Investments recently launched four leveraged sector ETFs.

Ferri added that newer indexes from companies such as MSCI Barra are designed with ETFs in mind--they are made to be more than benchmarks. He said the indexes have features that limit turnover and cut trading costs for ETF investors.

More stories from Fund Action

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree