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ETFs are without any doubt one of the most fascinating developments the financial industry has
witnessed over the last twenty years. In substance, ETFs allow investors to gain access to the
performance of an index at a reasonable cost without the hurdle of investing in the individual
constituents.
Notwithstanding, transaction costs, dividend treatment, tax assumptions, replication strategies,
discrepancies between exchange trading times and other intricacies inherent to managing an ETF
have resulted in those funds requiring fairly complex financial, regulatory and operational setups
as well as large disparities in cost, performance and risk.
In the absence of an applicable standard allowing to accurately gauging the qualities of each ETF, it
has become extremely difficult for institutional investors to fully comprehend the latter and
subsequently make thoughtful decisions.
In a first stage, Koris International will publish on a monthly basis a detailed qualitative and quantitative
analysis on the main ETFs tracking a widely used index.
This unbiased analysis does not intend to
provide a ranking of these funds but instead to highlight their distinctive elements to investors so
that they can make choices in full knowledge of the cause.
With the ‘ETF Inside Out’ initiative, Koris International positions itself as the first European specialist
in asset allocation to offer independent analyses on the passive investment vehicles it uses to
implement its strategies.
Jean René Giraud, Koris’ CEO and co-founder, considers that “this initiative allows the institutional
investors community to benefit from the know-how of our team, moreover delivered in a completely
unbiased manner. Though experience has shown us that ETFs are relevant tools when it comes to
implementing innovative investment strategies, apprehending, analyzing, selecting and monitoring
those vehicles requires a deep expertise few organizations are likely to provide.”
The first analysis on ETFs is devoted to the MSCI Emerging Markets Index, a quite complex index to
replicate. The full study underlines the considerable disparity ETFs exhibit in terms of cost, risk and
performances. It can be downloaded on our website at http://www.koris-intl.com/etf-inside-out.
The next studies will supplement these first analyses with specific focus on replication methods as well
as on the much talked about ETFs trading issue.
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