Institutions wary of ETFs is portable alpha approach

O'Connor, Cecily
May 2005
Pensions & Investments;5/2/2005, Vol. 33 Issue 9, p29
The article examines the use of exchange-traded funds (ETFs) in portable alpha strategies. ETFs are listed and traded like equities, and track indexes of stocks, bonds or other assets. Institutions can use them for beta, or market exposure, and then add alpha through hedge funds, fixed income or long-short strategies. On the upside, the investor benefits from perfect tracking against the index. The majority of the investors implementing portable alpha make direct investments in the alpha and use futures or swaps for their beta exposure. Cost is the biggest sticking point with institutional investors sizing up ETFs in portable alpha strategies.


Related Articles

  • ETFs simulate our fund picks.  // Dow Theory Forecasts;12/15/2014, Vol. 70 Issue 51, p1 

    The authors recommend two all-exchange traded fund (ETF) portfolios for thrifty investors. These are the All-ETF Growth Portfolio and the All-ETF Conservative Portfolio, which both include U.S. stocks, foreign stocks and bonds. Also presented is a chart which list some of the authors recommended...

  • Keeping It Simple. JUSTICE, PAUL // Bank Investment Consultant;Aug2011, Vol. 19 Issue 8, p42 

    The article discusses how investors can benefit and put exchange traded funds (ETF) to work in their portfolio. It emphasizes that advisors should keep it simple when dealing with investing that is important for client's financial well being. It stresses that clients can achieve a broad-based...

  • Under the Microscope.  // Morningstar Fund Family Reports: American Funds;Oct2011, Issue 95, p4 

    The article offers information on the comparison between the yield made by stocks and bonds. It states that stocks don not come with a promise that one will get your principal back. But, unlike bonds, they offer the prospect of positive real returns. It mentions that income-oriented investors...

  • ETF-only portfolios.  // Dow Theory Forecasts;1/18/2016, Vol. 72 Issue 3, p1 

    The article discusses how investors are embracing exchange-traded funds (ETFs) due to their low cost and trading flexibility. It cites 2 all-ETF portfolios that imitate the Growth and Conservative portfolios and hold 12 high-potential funds and will not cost much to purchase. It suggests for...

  • 3 ETFs That Help You Diversify. MARIE BEERENS // Investors Business Daily;3/14/2014, pA11 

    Achieving optimal diversification in your portfolio takes more than just bonds and stocks, whether in the form of ETFs, mutual funds or individual securities.

  • When is an ETF not an ETF? Dunkley, Emma // Fundweb;3/3/2014, p33 

    The article focuses on the growth in the European exchange-traded fund (ETF) industry in Great Britain. It is noted that in private over the counter, where typically an institution phones up a market maker, it is estimated that around two thirds of the market is done. It is mentioned that the...

  • ETFs BRANC OUT. Wine, Elizabeth // On Wall Street;Feb2008, Vol. 18 Issue 2, p38 

    The article looks at new forms of exchange-traded funds (ETF) that may come out in the U.S. in 2008. In 2007, large institutional investors have been increasing the amounts of their portfolios devoted to international stocks and bonds, according to Tom Anderson, head of ETF research at State...

  • Horizons launches Andean focused ETF. Bakie, John // Ai Trade News;2013, p33 

    The article reports on the launch of exchange-traded fund (ETF), the Horizons MILA 40 ETF, that will give investors exposure to the forty largest and most liquid stocks in Chile, Peru and Colombia.

  • Risk and reward. Gascoigne, Clare // Accountancy;Jun2002, Vol. 129 Issue 1306, p68 

    An increasing number of institutional investors have been turning to bonds instead of shares. This article discusses if individuals should also turn to bonds instead of shares. According to Colin Jackson, a financial adviser at Baronworth: "Putting your money into bonds means deciding to take...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics