ETFs

What are ETFs?

ETF stands for “exchange traded fund”, and is a type of mutual fund that trades on a stock exchange.┬á ETFs differ from traditional open-ended mutual funds that sold directly by investment brokers or fund houses at a daily closing price, in that ETFs trade on an exchange, throughout the day with market and limit orders.┬á Unlike “closed-end funds”, which also typically trade on stock exchanges, ETFs are open ended in the new shares can be created or redeemed, in kind, in large blocks that assure the ETF trades close to net asset value.

What is an example of a very big and popular ETF?

The oldest and still largest ETF in the world is the State Street SPDR S&P 500 ETF, with US$267 billion in assets as of July 2018.┬á This ETF trades under US ticker “SPY” and its shares are often called “Spyders” after the SPDR trademark, which was originally an acronym for “S&P 500 Depository Receipt” (comparable to ADRs, which hold foreign shares).

By buying shares of SPY, you are basically buying a proportional basket of shares of all 500+ stocks in the S&P 500 index at the same price the largest institutional money managers and pension funds would buy the same basket at.┬á If there were ever too much demand for SPY shares, large banks could create new shares by buying and exchanging a “creation unit” basket of shares in those 500+ S&P 500 components, which is the tax-efficient and market efficient “in-kind creation/redemption mechanism” you often hear about.

What are the main advantages of ETFs over other types of funds?

The main advantage of ETFs is that they are one of the cheapest, most scalable, and most efficient ways to get access to world class benchmarks of stocks, bonds and other assets.

“Core Grid” of US-listed Low-cost ETF “Majors”

As a “cheat sheet” for putting together diversified low-cost ETF portfolios, here is a grid organized from the 200 lowest expense ratio ETFs listed in the US as of February 2019:

iShares VG SSgA+ NonBig3
ITOT
s e
VTI
s e
SPTM
s e
GSLC
s e
IDEV
s e
VEA
s e
SPDW
s e
SCHF
s e
IEMG
s e
VWO
s e
SPEM
s e
USRT
s e
VNQ
s e
BBRE
s e
IAGG
s e
BNDX
s e
AGG
s e
BND
s e
SPAB
s e
SCHZ
s e
STIP
s e
VTIP
s e
SCHP
s e
GTIP
s e
SLQD
s e
BSV
s e
BIL
s e
GBIL
s e

“Core Grid” of US-listed “Enhanced Strategy” aka “Smart Beta” ETFs

Complementing the above grid of low cost ETFs, here are a few of the top US listed smart beta ETFs in a few different categories:

Value Quality Risk Multi Fundie Buyback
VTV
s e
QUAL
s e
USMV
s e
LRGF
s e
FNDX
s e
PKW
s e
VBR
s e
GSSC
s e
FNDA
s e
EFV
s e
IQLT
s e
EFAV
s e
GSIE
s e
FNDF
s e
IPKW
s e
ISCF
s e
FNDC
s e
EEMV
s e
GEM
s e
FNDE
s e
GQRE
s e

Broader Grid of US-listed ETF “Majors”

Here is a grid of US-listed ETFs by 8 major issuers of US-listed ETFs across 13 major categories I find useful for building “core” asset allocations. I put this together mostly for my own reference, so it is not the most readable or complete, but I have yet to find a more clearly organized grid of core ETF building blocks.

iShares VG SSgA Schw WT DWS GS JP iLoVol iQual iVal iMulti
ACWI
s e
QWLD
s e
DEW
s e
JPGE
s e
ACWV
s e
ACWF
s e
GSD
s e
ITOT
s e
VTI
s e
SPTM
s e
FNDB
s e
QSY
s e
QARP
s e
GSLC
s e
JQUA
s e
USMV
s e
QUAL
s e
VLUE
s e
LRGF
s e
IJR
s e
VB
s e
SMLV
s e
FNDA
s e
EES
s e
DESC
s e
GSSC
s e
JPSE
s e
SMMV
s e
IXUS
s e
VEA
s e
SPDW
s e
FNDF
s e
DWMF
s e
DEEF
s e
GSIE
s e
JPIN
s e
EFAV
s e
IQLT
s e
IVLUE
s e
INTF
s e
SCZ
s e
VSS
s e
GWX
s e
FNDC
s e
DLS
s e
IEMG
s e
VWO
s e
QEMM
s e
FNDE
s e
EMMF
s e
DEMG
s e
GEM
s e
JPEM
s e
EEMV
s e
EMGF
s e
EEMS
s e
EWX
s e
DGS
s e
USRT
s e
VNQ
s e
RWR
s e
SCHH
s e
BBRE
s e
VNQI
s e
RWX
s e
DRW
s e
AGG
s e
BND
s e
SPIB
s e
WFIG
s e
HYDW
s e
GIGB
s e
JPGB
s e
FIBR
s e
IGEB
s e
IAGG
s e
BNDX
s e
IBND
s e
EMCB
s e
IGVT
s e
JPMB
s e
TIP
s e
VTIP
s e
WIP
s e
GTIP
s e

Lists of UCITS and Hong Kong listed ETFs

I plan to update these lists in the near future, but for now, here is a list of data sources on ETFs:

HKEX has also shared the 2019 ETF Tax Report by EY showing the net income after withholding taxes Hong Kong investors can expect from ETFs domiciled in different jurisdictions.

A “quick pick” list of LSE-listed ones by currency, with links, are here:

USD EUR GBP
IWVL XDEV
IWQU XDEQ
IFSW SUSW
WDSC
EMVL
EMMV
IEMS
GLRE GBRE
TRSY GLAB
GLAU
CGB XGLE GLTY
XGSI
IEMB EMBE EMHG
TIPS ITPE XGIG
TRS3 ERNE ERNS
VDUC
XUIT
FLOT

List of US-listed Vanguard ETFs

Vanguard for some reason does not list all its own ETFs on its own website, but fortunately I was able to put together the following list with links thanks to ETF.com:

List of US-listed single country ETFs

One of the most obvious and immediate uses of ETFs is low cost access to a single foreign country’s stock benchmark. The first suite of these I am aware of were the World Equity Benchmark Securities (WEBS), which became the oldest single country ETFs now run under the Blackrock iShares umbrella. Here is a list of US-listed single country ETFs by size as of February 2019:

Questions?  Contact me through the form below.