Koris International has launched a transparency campaign on exchange-traded funds’ risks and performance.
The company says transaction costs, dividend treatment, tax assumptions, replication strategies, discrepancies between exchange trading times and other intricacies inherent to managing an ETF have resulted in those funds requiring fairly complex financial, regulatory and operational setups as well as large disparities in cost, performance and risk.
In the absence of an applicable standard allowing to accurately gauging the qualities of each ETF, it has become extremely difficult for institutional investors to fully comprehend the latter and subsequently make thoughtful decisions.
In a first stage, Koris International will publish on a monthly basis a detailed qualitative and quantitative analysis on the main ETFs tracking a widely used index. The analysis does not intend to provide a ranking of these funds but instead to highlight their distinctive elements to investors so that they can make choices in full knowledge of the cause.
Jean René Giraud, Koris’ CEO and co-founder, says: “This initiative allows the institutional investors community to benefit from the know-how of our team, moreover delivered in a completely unbiased manner. Though experience has shown us that ETFs are relevant tools when it comes to implementing innovative investment strategies, apprehending, analysing, selecting and monitoring those vehicles requires a deep expertise few organisations are likely to provide.”
The first analysis on ETFs is devoted to the MSCI Emerging Markets Index.