Exchange Traded Funds: Products & Lifecycle
April 18, 2012
Registration Fee: US$995.00 Register Location Instructor
Many classes sell out; we suggest registering at least one week in advance to ensure availability
Beginner Level, 7 CPE Credits
Instructor: Stanley D. Monsowitz
Hours: 9:00 am - 5:00 pm; Registration/Breakfast begins at 8:30 am
Location: Bayards, One Hanover Square, New York City
What are ETF’s and why are they becoming the hottest selling product? Why are billions of dollars moving from Mutual Funds and other investment products into ETF’s (For example - November 2011: $20 billion out of Mutual Funds and $60 billion into ETF’s).
This 1-day seminar will present the participants with the knowledge required to help both the back-office and front-office employees to better understand and substantially reduce risk and minimize errors in this mainly automated process.
We will discuss why the sudden flurry of warnings about ETFs and why (and how) they are being used not only as an investment product, but as a hedge. Will this new functionality for ETF’s raise the risk profile of the product?
Some of the topics we will be discussing include:
- What is an ETF?
- Why are Passively Managed EFTs so “inexpensive”?
- What are the new Actively Managed ETFs?
- How are they Created, Traded, Cleared, Settled and Reported?
- How do the professionals use them in an Investment Portfolio?
- How are ETFs valued?
- What are the Real and True Costs and Risks of ETF’s?
We will also review the back-office clearing and settlement of these products and what the NSCC involvement is with them. We will then conclude with the current state of the Rules and Regulations regarding them.
Session One
Introduction, Program Objectives and Critical Importance, Terms & Entitlements
- The Course Director will present a brief overview of the program
- The delegates introduce each other & review the objectives for the course
- Understand the importance of this product
- Introduce & begin Glossary of special terms, where necessary
Session Two
What is an ETF?
Session objective: To understand the features and functions of a Mutual Fund and then to compare them to an ETF and to understand what appears to be making the ETFs so popular.
- What are Mutual Funds and how are they related to ETFs?
- Are ETFs really Mutual Funds?
- Structure of an ETF
- Why are they called “Exchange Traded Funds”?
Session Three
Passive and Active Managed ETF’s and understanding their costs
Session objective: To understand how the processing of Passive and Active Managed ETF’s and why (and how) they are so “inexpensive” for the issuer
- Understand Index Tracking and the Operations required
- Passive Investment ETFs
- Active Investment ETFs
Session Four
How are ETFs Traded, Cleared, Settled and Reported. Also, the role of DTCC/NSCC/OMGEO in ETF processing
Session objective: To understand how ETFs are processed through the full value chain of Trade Processing including NSCC’s role in the automation and processing of ETFs.
- Trade Processing and ETFs
- How are ETFs Created?
- How are ETFs Valued and Redeemed?
- What is DTCC/NSCC/OMGEO doing to assist in this process?
Session Five
Types, Costs and Risks of ETFs
Session objective: To understand all the classifications of ETFs and the real costs and risks – especially as they are used more and more as a Portfolio Hedge
- US Equity ETFs
- International Equity ETFs
- Emerging Markets ETFs
- Fixed Income ETFs
- Commodities ETFs
- Currency ETFs
- Alternative Investment/Strategy/Other ETFs
Session Six
Final Review and Wrap-up
- Review class information and allow for any final questions and discussion
- “Visioning” Session