How safe are ETFs?
Does anyone have any views on what type of ETF might be riskier than others.
In the case of an ETF that tracks a commodity via the futures market, what is the ultimate risk?
As I understand it the provider must cover the daily amount of ETF in "circulaton" with 100% colaterall. Is this colaterall in cash or the value of the futures contracts held?
Is there the possibility that some of the colaterall could be diverted to other parts of the ETF providers business, whether legally or not?
Presumably the futures contract cannot get too far out of kilter with the underlying physical market or could it?
Does anyone have any views on what type of ETF might be riskier than others.
In the case of an ETF that tracks a commodity via the futures market, what is the ultimate risk?
As I understand it the provider must cover the daily amount of ETF in "circulaton" with 100% colaterall. Is this colaterall in cash or the value of the futures contracts held?
Is there the possibility that some of the colaterall could be diverted to other parts of the ETF providers business, whether legally or not?
Presumably the futures contract cannot get too far out of kilter with the underlying physical market or could it?
