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dp Media<br />
Shedding light on product concepts<br />
Being traded on an exchange is a common<br />
denominator of exchange traded financial<br />
products. however, this product group also<br />
comprises variants and some abbreviated<br />
terms. an excursion into the world of exchange<br />
traded instruments.<br />
14 ExchangE TradEd ProducTs & IndExIng guIdE <strong>Switzerland</strong> <strong>2013</strong><br />
dIETEr haas<br />
Only in rare cases do laymen know what the financial market<br />
abbreviations ETF, ETC, ETN, ETV, ETI and ETP mean. Even the<br />
pros often have a hard time always being able to define the<br />
concepts and putting them in their correct product categories.<br />
In the English-speaking world, exchange traded products are<br />
the general term for exchange traded financial products. However,<br />
the Swiss exchange defines this a bit differently. ETPs<br />
are a separate segment there. But let's start at the beginning:<br />
The conceptual world of the "E-" products began over 20 years<br />
ago when exchange traded funds (ETFs) were introduced on<br />
exchanges in North America.<br />
In the beginning was the ETF<br />
ETFs track passive indices and are considerably less expensive<br />
and often more flexible than actively managed investment<br />
funds. For a stock ETF, investors generally pay considerably<br />
less than 1% annually in management fees. Active funds, on the<br />
other hand, generally charge up to 2% per year. In addition, an
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