Book of the Week: The ETF Book

19 Nov 2016

the-etf-book This week I read The ETF Book, because I’m procrastinating. I though this would be a really boring and dry subject, but I learned a few things. I learned that Vanguard has a patent on Vanguard Index Participation Receipts (VIPERs), the structure of their ETFs, which are special class shares of their mutual funds. When you’re buying something, you should know what you’re buying. There are many different type of exchange portfolios as detailed below. | Grantor Trusts | Investment Trust | Exchange-Traded Notes (ETN) | Unit Investment Trust (UIT) | RIC Open-Ended ETF | RIC Vanguard ETF
—|—|—|—|—|—|—
SEC Registration Act | 1933 | 1933 | 1933 | 1940 | 1940 | 1940
Company dividend reinvested | No | No | Implied | No | Yes | Yes
Portfolio pays dividends | Yes | Yes | No | Yes | Yes | Yes
Redemption in-kind option | Yes | No | No | No | No | No
Tracking error | NA | Yes | No | Yes | Yes | Yes
Credit risk of issuer | No | No | Yes | No | No | No
Manager discretion | NA | Yes | No | Restricted | Yes | Yes
Allows concentrated positions | Yes | Yes | Yes | No | No | No
Traditional fund share class | No | No | No | No | No | Yes
Economic Cycle Investing the-etf-booksvg