ETF to individual investors and institutional investors are a very good tool. For individual investors, for both short-term or long-term access to the layout, ETF is a very appropriate tool. Institutional investors are concerned, such as insurance companies, corporate bodies, mutual funds or securities companies can purchase and redemption mechanism for arbitrage investment, Or will the hands of the stock market through the primary into ETF, as a core holding.

Moreover, the ETF’s derivatives business, institutional investors can use ETF issued to the subject of HighYieldNote StructureNote, a bank might issue ETF structural deposits, Exchanges can be issued based on the right to choose ETF, the brokerage firms could be issued subject to the ETF Warrants, It can be said is the right to choose after the most extensive use of the financial products, could further use of index linkage of financial commodity arbitrage and hedging purposes. But ETF shares for a package of the investment portfolio, for the use of ETF investing Hedging and arbitrage by investing in people, the use of ETF remains to be done before the change in shareholding structure.

(1) use the fund industry — as a general picture of the Common Fund for the subject

ETF is suitable for all types of assets as the core management shareholdings. Through the core and satellite investment model, in addition to the initiative can effectively reduce the risk of investment, better in minimizing risk, creating a higher rate of return. ETF which, in essence, is still a sexual interest with the assets, particularly in the open-end fund operation. Past an open-end fund must be a certain location as cash to meet the cash for redemption. and the ETF because of the sale at any time in the market characteristics, combined with its constituent stocks are market liquidity excellent units, therefore, ETF very suitable for the Common Fund in cash as part of preparations for conversion of stock position intermediary investment location.

(2) the insurance industry — the use of investment-oriented insurance policies combined ETF

ETF for the benefit of a certificate with the purchase of a single stock, the ETF portfolio includes stocks, ability to spread the risks, and has a high hedging function. In addition, the ETF management fees than most mutual funds are low and transaction costs due to lower trading costs low, thus abroad greatly welcomed by the insurance industry. The United States, for example, 401K retirement pension funds on the part of most low-risk investment in the ETF. to own a lot of capital in the insurance sector, with solid profit, low-risk and low cost characteristics, the investment is the ideal choice.

Apart from their own capital investment ETF, the insurance industry can also combine ETF fixed income securities and commodities. create a conservative investment popular commodity investment-oriented insurance policies —. Investment-oriented insurance policies from a general policy, not movements liability reserve, the deduction of premiums and low maintenance costs of the operation of the office, with full access for value-added investment, profits can be offset by future taxpayers premiums, policy value of the policy holders to choose entirely in accordance with the investment performance of the subject to make a decision Compared to the past, the fixed rate of insurance, policy holders more flexibility. If investment-oriented insurance policies can use low-risk, moderate reward ETF as a link to the subject, In ups ETF index-tracking features, in addition to the wrong election could reduce the investment risks. its rate of return than the fund well, the ETF is launched, its rate of return will be close to the wholesaler. Therefore, the policy holders, connecting ETFs in the investment-oriented insurance policies linked investment risk than funds, Indexed Bonds small office, the more protected; ETFs link to the investment-linked insurance policy than government bonds office receipts, for the life insurance companies, the ETF is a move forward and attack, retreat and defend the investment products.

Copyright Fund China 2009.

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