Product performance

Abstract

This month three products linked to exchange-traded funds (ETF) are examined. These products are very popular in the US as they are cheap to use as an underlying, while structured products linked to ETFs appeal to investors as they can change the risk-return profile of the fund. The range of EFTs that are used to structute products is increasing, but the iShares MSCI Emerging Markets Index Fund remains the most common. Some funds, such as the iShares Russell 2000 Index Fund and SPDR S&P 500 ETF, are used in place of the indexes they aim to replicate. There are also funds that offer relatively inexpensive access to more illiquid indexes, such as the iShares MSCI Brazil Index Fund and iShares FTSE/Xinhua China 25 Index Fund.