Exchange Traded Fund and Italian Equity Market : Part I

The exchange traded funds (ETF) have gradually won over the investors' trust, becoming one of the most important financial novelties in recent years. This document proposes to analyse the instrument's characteristics and prerogatives, which – as we know – shows a particular market index and is negotiated on mid-day basis like listed shares, with reference to both an examination of specific matters and the advantages offered and to the content and implications of investment policies and asset allocation set up by the operators. This is followed by a look at the micro-structure and a first evaluation of the MTF (Mercato Telematico dei Fondi), set up in 2002 by Borsa Italiana S.p.A, which accepts trading on the Italian ETF market, and which is recording strong interest from issuers, intermediaries and investors. Finally, the prospects for the sector's growth are outlined, which appears to be destined to permanently become part of the operators' portfolios