An ETF, or Exchange Traded Fund is a collection of securities (generally stocks) designed to track an underlying index or other underlying asset. This index may follow a group of stocks in a given industry, grouped by size or other identifiable characteristics, geographical region, or may be part of a specific investment strategy. ETF’s can be broad and well diversified or focussed on a specific aspect of investing. Some ETF’s may be deemded as UCITS compliant depending on their construction and locality.
For more information on these products, please see our glossary entry Exchange Traded Fund. Alternatively, see our article “IQ Merger Arbitrage ETF Review“, in which the IQ Merger Arbitrage Exchange Traded Fund (MNA), the most well known, covering merger arbitrage is discussed at length.
ETF Example
The best-known example is the SPDR S&P 500 (SPY). A passive index fund which tracks the S&P 500 Index. Exchange Traded Funds can be traded like regular stocks regardless of the financial instrument they refer to. Merger Arbitrage Limited reports on the performance of this fund in the weekly Merger Arbitrage Performance & Analysis updates.
Additional Resources
The Ultimate ETF Guidebook: A Comprehensive Guide to the World of Exchange-Traded Funds – Including the Latest Innovations and Ideas for ETF Portfolios by David Tuckwell is a great resource for those wishing to learn more.
So as not to show favoritism, three prominent Exchange Traded Fund websites (with THEIR taglines) offering similar services and information are
- ETF.com – Screener & Database
- ETF&Channel – The Web’s Best Screener
- ETF&Database – The Original & Comprehensive Guide
