What are the possible uses of exchange-traded funds?
IAsset allocation, e.g. core/satellite strategy a) Building up of a base investment through a broadly based index fund; b) Overweighting or underweighting of sectors, countries and regions, buying or short-selling corresponding ETFs Cash Management/Equitization: Management of daily inflows and outflows of money, mainly for funds; also as a complement to and instead of futures Arbitrage: Exploitation of temporary price differences between ETFs, cash and derivatives markets Hedging/Lending: Securing the portfolio against price losses by short-selling (short strategy) Examples of different trading strategies can be found in the brochures “XTF Exchange Traded Funds – A Guide for Institutional Investors” and “XTF Exchange Traded Funds – A Guide for Traders” of Deutsche Börse.
