Abstract
The explosive growth in all kinds of ETFs—from broad-based indexes to narrow sector funds to commodities and fixed-income funds—has given rise to the need to examine how to achieve best execution for these securities. Should one treat ETFs as just another security, much like an individual stock, and seek best execution on the ETF only? Or should one recognize that an ETF has replicating or alternative securities, some of which could be traded in lieu of the ETF, thus prompting consideration as to whether to buy the cheapest of the related securities and sell the dearest? (For profit-and-loss (P&L) reasons, if not yet for regulatory requirements, one should choose the latter.)
- © 2009 Pageant Media Ltd
Don’t have access? Register today to begin unrestricted access to our database of research.