The barrage of regulator reports and comments on ETFs has brought to light some of the activities inside ETFs, securities lending is one of these. Paul Burgin asks asset managers what they think of the practice
Deutsche Bank's July Industry Perspective highlighted the importance of securities lending within the ETF industry. While the practice can generate attractive revenues to offset total expense ratios (TERs), it is not without its risks. ETF providers are not the only parties debating whether the practice is right or wrong. Nor are they the only parties making use of stock lending. Stock lending is nothing new. Mutual funds and pension providers have lent out stock for many years, generating returns that add to profits, reduce overall investment costs or boost fund performance. Not all a...
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