Koris International provides European institutional investors with full transparency on ETFs’ risks and performance

ETFs are without any doubt one of the most fascinating developments the financial industry has witnessed over the last twenty years. In substance, ETFs allow investors to gain access to the performance of an index at a reasonable cost without the hurdle of investing in the individual constituents.

Notwithstanding, transaction costs, dividend treatment, tax assumptions, replication strategies, discrepancies between exchange trading times and other intricacies inherent to managing an ETF have resulted in those funds requiring fairly complex financial, regulatory and operational setups as well as large disparities in cost, performance and risk. In the absence of an applicable standard allowing to accurately gauging the qualities of each ETF, it has become extremely difficult for institutional investors to fully comprehend the latter and subsequently make thoughtful decisions.

In a first stage, Koris International will publish on a monthly basis a detailed qualitative and quantitative analysis on the main ETFs tracking a widely used index.

This unbiased analysis does not intend to provide a ranking of these funds but instead to highlight their distinctive elements to investors so that they can make choices in full knowledge of the cause.

With the ‘ETF Inside Out’ initiative, Koris International positions itself as the first European specialist in asset allocation to offer independent analyses on the passive investment vehicles it uses to implement its strategies.

Jean René Giraud, Koris’ CEO and co-founder, considers that “this initiative allows the institutional investors community to benefit from the know-how of our team, moreover delivered in a completely unbiased manner. Though experience has shown us that ETFs are relevant tools when it comes to implementing innovative investment strategies, apprehending, analyzing, selecting and monitoring those vehicles requires a deep expertise few organizations are likely to provide.”

The first analysis on ETFs is devoted to the MSCI Emerging Markets Index, a quite complex index to replicate. The full study underlines the considerable disparity ETFs exhibit in terms of cost, risk and performances. It can be downloaded on our website at http://www.koris-intl.com/etf-inside-out.

The next studies will supplement these first analyses with specific focus on replication methods as well as on the much talked about ETFs trading issue.