Book Reviews: Exchange Traded Funds

Exchange Traded Funds – Francis Groves
(207 pages, Harriman House, ISBN 9781906659141)

‘Exchange Traded Funds’ is a thorough guide to ETFs, a product that is increasingly popular among both retail and professional traders and investors.

The author covers a lot of ground, starting with how ETFs are constructed and how they are regulated (particularly in Europe). While there is a focus on equity and index ETFs, the author does explain other types of ETFs, including bond-linked and commodity-based ETFs.

While many traders and investors believe that ETFs are passive instruments that simply track an underlying, the author explains how and why there is more to them. There are some important issues that ETF users need to be aware of and Groves does a good job of explaining these.

The book appears to be aimed at a professional or sophisticated traders and investors, as well as financial advisors. Because there are some complex issues associated with ETFs, novices may struggle with the book at times (but there is an argument that novices should not be trading ETFs.)

If you are interested in trading ETFs or would like to know more about them, this book should be able to answer most of, if not all, your questions. Although there is a European focus, once you understand the basics and mechanics of ETFs you should be able to apply them to other markets.

All in all, the book is a thorough guide to ETFs that does exactly what the author states it will.