Morningstar calls for greater transparency

MorningStar has put the market under the microscope and in publishing its findings on the unique sources of risk synthetic ETFs’ structure carries, three questions are addressed: what is the source of the risk? How are investors being protected against this risk? And, how are investors being compensated for assuming this risk? Several factors have prompted MorningStar’s probity including the nervousness of regulators in the wake of the global financial crisis towards this rapidly expanding and innovative niche that ETFs occupy within the financial markets. ETFs using synthetic replication ...