Hedge funds continue to see ETFs as useful instruments while regulators voice concerns over complexity

Complex relationship


It is unfortunate the UBS rogue trader in London incident has brought exchange traded funds (ETFs) to the attention of the public as well as politicians and regulators. The danger is a hasty decision and assumptions made that the products themselves might become guilty by association because of what appears to be unauthorised trading by one UBS director.

The biggest market for ETFs unsurprisingly is in the US where around 80% of buyers are from the retail end of the market whereas the European ma