Understanding Exchange Traded Funds

Exchange Traded Funds are now firmly established in the investment world. But how do they actually work? Originally designed as simple, user friendly, passive, Equity Index tracking vehicles, their evolution has created several different types of product, across the Asset Classes, with each one requiring different approaches in due diligence.


While the external ‘packaging’ might look similar, the risks underneath vary considerably.


  • Risk Managers
  • Regulators responsible for Fund Managers
  • Pension Fund Managers
  • Sovereign Wealth Fund Managers
  • Financial Journalists
  • New Financial Markets employees


Half day

Learning Objectives

  • ETFs & traditional Index Funds compared
  • Understanding ETFs, the replication mechanism
  • Synthetic Swap-based vs Physically backed ETFs – Counterparty risk
  • Primary (Redemption, Creation process) & Secondary markets
  • Authorised Participants, Portfolio Composition Files
  • Real time pricing & Arbitrage opportunities, Fees, Dividends
  • Tracking error measurement
  • Deciding on which ETFs to employ – structure, transparency, cost, liquidity
  • Core vs Satellite investing
  • ETF Variations on a theme – Inverse, Leveraged, Thematic, Active
  • ETFs on Commodities, Currencies, Bonds
  • Commodity ETFs – Issues to consider – Futures or Physicals?
  • Impact of behavioural factors on security market risk


This course has no prerequisites.

Quartic Support

Quartic is here to support you at every stage of your studying. Tutors are available by phone, e-mail or Skype, or in person if you are coming to face-to-face classes. Our Support team can assist with every aspect of administration.

Please contact us on +44 (0) 20 7776 7500 or email us at [email protected] with any questions you may have and we will be happy to help you.

Registration for : Understanding Exchange Traded Funds

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