"Smarter" investment strategies in ETFs

Investment in exchange-traded funds has grown dramatically over the past five years, as the vehicle’s key characteristics – high degrees of transparency and liquidity, absence of credit risk, and the ability to trade intraday – have found increasing favour with investors around the world. According to consultants McKinsey & Co, the assets held in ETFs globally are likely to increase from the US$1,500bn that was in place at the end of 2010 to between $3,100bn and $4,700bn by 2015. Given how important credit exposure and liquidity have become to all categories of investor since the financ...