Talk:Exchange-traded fund

Bob, is it necessary to include explicitly the text "ETF" redirects here? If someone reaches this page by clicking on ETF, there will be a message (Redirected from ETF) anyway. Ken Schwartz 17:43, 12 June 2008 (EDT)
 * Nope. I just did it kind of out of habit, as it's often done on Wikipedia. However, now that you mention it, it is only done when there are multiple definitions for an acronym and the redirects here message is mostly used because of that as it will mention the other acronym definition. In this case, I think you're right that it's superfluous and I'll remove it. --CyberBob 09:08, 13 June 2008 (EDT)

ETF Provider Links
Link rot: This doesn't work anymore. ETF and Index Fund Managers --tarnation 15:14, 13 May 2010 (UTC)
 * Thanks, I replaced the link with a serviceable link form ETF Guide: ETF Directory--Blbarnitz 15:40, 13 May 2010 (UTC)

SEC Definitions:

According to the SEC, "Exchange-traded funds, or ETFs, are investment companies that are legally classified as open-end companies or Unit Investment Trusts (UITs), but that differ from traditional open-end companies and UITs in the following respects..."

The first paragraph is confusing:

"An exchange-traded fund, or ETF, is a registered investment company. Other forms of the registered investment company include mutual funds,  closed-end funds, and  unit investment trusts. Legally, an ETF is classified as an open end company or unit investment trust, but in the U.S. a number of other investment vehicles including exchange traded notes, HOLDRS, and certain partnerships are often grouped under the exchange traded fund banner."

Should this be instead:

"An exchange-traded fund, or ETF, is a registered investment company based on unit investment trusts. Other forms of registered investment companies include mutual funds and  closed-end funds. Legally, an ETF is classified as an open-end fund or unit investment trust, but in the U.S. a number of other investment vehicles including exchange traded notes, HOLDRS, and certain partnerships are often grouped under the exchange traded fund banner."


 * Compare the above definitions to Unit Investment trusts. I was thinking to make the ETF definitions consistent among UIT, ETF (open end), and Closed-End companies.
 * The first paragraph in Closed End Funds mentions ETFs as a registered investment company; which doesn't align with the SEC definition.

Open End Fund:

This is confusing: "The most flexible and most common form of ETF structure is the open end fund. Registered under the Investment Company Act of 1940, this structure has the following characteristics:"

Should this be instead (building on updated definition that a mutual fund is also open-ended fund): "The most flexible and most common form of ETF structure is the open end fund, which has the following characteristics:"

ETF History: This paper gives a more detailed history of ETFs: Exchange Traded Funds: A White Paper


 * Are OPALS important (see paper); as they are in this paper but I never seem them mentioned anywhere?

Acronyms: Can you add a reference link for SPDR (Standard & Poors Depository Receipt) and QQQQ?

--LadyGeek 12:11, 13 November 2010 (EST)


 * "An exchange-traded fund, or ETF, is a registered investment company based on unit investment trusts." This makes no sense since most ETFs are open end funds. A registered investment company ETF can be structured as either an open end company or as a unit investment trust. These structures are governed by the Investment Company Act of 1940.

However,in addition to open end and UIT structured funds, a number of additional exchange traded products are effectively considered exchange traded funds by the investing populace. These other entities include grantor trusts, which include such popular funds as the gold and silver exchange traded vehicles; Rydex currency exchange traded vehicles; and many of the commodity index exchange traded vehicles. Currently nearly 100 exchange traded vehicles known as exchange traded notes, which are credit instruments of a sponsoring bank, are traded on the exchanges. Finally, some commodity exchange traded vehicles are organized as Master Limited Partnerships. All of these entities have their legal basis in the Securities Act of 1933. See ETF Product Structures as well as History of ETFs. Historically, the first ETFs were structured as UITs, but the dominant current structure is the open end fund.

This emendation may be preferable:

"An exchange-traded fund, or ETF, is a registered investment company. Other forms of the registered investment company include mutual funds,  closed-end funds, and  unit investment trusts. Legally, an ETF is classified as an open end company or unit investment trust, but in the U.S. a number of other exchange traded products which are not regulated investment companies are often grouped under the exchange traded fund banner. These products include exchange traded grantor trusts, exchange traded notes (ETNs), HOLDRS, and certain partnerships (MLPs)"

--Blbarnitz 14:10, 13 November 2010 (EST)

Open End Fund: My point of confusion is interpreting the associations between the Investment Company Act of 1940 and ETFs. As written below, I'm interpreting ETFs to be registered under the Investment Company Act of 1940:

"The most flexible and most common form of ETF structure is the open end fund. Registered under the Investment Company Act of 1940, this structure has the following characteristics:"

This makes more sense to me: "The most flexible and most common form of ETF structure is the open end fund, which has the following characteristics:"

As the association between ETFs and open end funds were already explained in the first paragraph, the background info can be removed and the meaning is clear to me.

Also, there's no mention of how ETF's came to be (AMEX petition in 1992-1993), but it's probably not needed. Note that the IFA white paper (above) has a different perspective and more detail on the creation of SPDR than the History of ETFs.

Now I see what I misinterpreted. The closed end funds page is OK - I understand the perspective now. --LadyGeek 16:16, 13 November 2010 (EST)

Master Limited Parnerships
Based on comments in this post: Re: Pat Robertson investing idea [Master Limited Partnership, United States Oil Fund and United States Natural Gas Fund were noted to be inappropriate examples. A good tutorial site was recommended: National Association of Publicly Traded Partnerships, which leads to this page: Presentations and Primers.

ETF Guide shows United States Oil Fund (USO) as an Exchange Traded Security - which I think is different than an Exchange Traded Fund. Is it appropriate to list MLPs in this page? If so, should the details be updated (as described in the tutorials)?


 * Taxation of MLPs are incredibly complex.
 * Would it be appropriate to add a caveat that this investment should be limited to high net worth individuals?

--LadyGeek 16:58, 22 June 2013 (CDT)

MLPs don't belong on this page, because they are individual investments (stocks are also exchange-traded securities), not ETFs. If we have a wiki page on MLPs, it should be a separate page. (I don't know whether we need one, and if we do, I don't know enough about them to write a good page.) Grabiner 21:24, 25 June 2013 (CDT)


 * I agree and have removed the section. Based on the referenced thread, unless we want to warn investors that this product is not for everyone, I don't think we need a dedicated page. For reference:

Master limited partnership
Some commodity exchange traded vehicles are structured as Master Limited Partnerships (registered under the Securities Act of 1933). Characteristics include:
 * 1) As holders of a MLP, investors are required to report their share of the MLP's income, gains, losses and deductions on tax returns even if there are no cash distributions. Futures contracts are currently taxed at a hybrid rate of 60% long-term and 40% short-term gains, irrespective of the actual holding period.
 * 2) Tax reporting is done with a Schedule K-1.

--LadyGeek 21:52, 25 June 2013 (CDT)

Demise of HOLDRS
While researching the meaning of the HOLDRS acronym (not defined - HOLding Company Depositary ReceiptS), I came across this article: All The HOLDRS Are Now History, NYSE Says. Should HOLDRS be removed? --LadyGeek 21:38, 28 November 2013 (CST)