ETF Strategies and Tactics: Hedge Your Portfolio in a Changing Market »

Laurence M. Rosenberg is former chairman of the Chicago Mercantile Exchange and served on the Exchange's Board for more than 20 years. He is currently involved in international consulting through his own Chicago-based company, LRosenberg Consulting.

Neal Weintraub teaches at the Chicgo Mercantile Exchange and is director of education and strategy for World Wide Associates, Ltd.. He is the author of Tricks of the Active Trader (McGraw-Hill).

Andrew S. Hyman

is marketing director at Fiske Walter Capital Management. He also holds institutional and public seminars on exchange-traded funds.

The first hands-on guide to tapping into the $335 billion ETF market

ETF Strategies and Tactics is an unprecedented guidebook covering the mechanics of ETFs, complete with approaches and techniques for hedging positions, preserving capital, and protecting assets from market volatility.

Led by former chairman of the Chicago Mercantile Exchange, Laurence Rosenberg, the expert team of authors behind ETF Strategies and Tactics provides valuable insight into:

• How ETFs work
• Unique characteristics of ETFs
• The people who trade ETFs
• The types of investors who own ETFs
• Advantages and disadvantages of ETFs

There is no clearer or more practical resource for learning how to use ETFs to hedge risk at low cost than this one-stop guide.

Laurence M. Rosenberg is former chairman of the Chicago Mercantile Exchange and served on the Exchange's Board for more than 20 years. He is currently involved in international consulting through his own Chicago-based company, LRosenberg Consulting.

Neal Weintraub teaches at the Chicgo Mercantile Exchange and is director of education and strategy for World Wide Associates, Ltd.. He is the author of Tricks of the Active Trader (McGraw-Hill).

Andrew S. Hyman

is marketing director at Fiske Walter Capital Management. He also holds institutional and public seminars on exchange-traded funds.

Acknowledgments     xiii
Introduction     xix
What Are ETFs, and What Makes Them Good
Investments?     1
What Is an ETF?     2
Origins of ETFs     2
Growth of the ETF Market     5
Product Varieties     6
Why Investors Are Embracing ETFs     7
ETFs Compared to Mutual Funds     11
The Investment Universe     12
Investment Companies     14
Expenses     26
Tax Efficiency     36
Similarities and Differences between Mutual Funds and ETFs     42
How ETFs Work     47
Buying and Selling ETFs: An Illustration     47
ETF Mechanism     49
Arbitrage and ETFs     51
Differences between Unit Investment Trusts and Open-End Companies     52
Grantor Trusts/HOLDRs     54
Actively Managed ETFs in the Future     57
ETF Regulation     61
ETFs and ETF Look-Alikes     62
Illustration of an ETF Look-Alike     64
Personnel Issues     66
Taxes     69
Regulations outside the United States     72
ETF Indexes     77
What Are Indexes?     77
Development of an Index     79
Index Diversity     82
Major Indexes Measured by ETFs     83
Tax Issues     85
The ETF Universe     89
ETF Investment Options     89
Classification by Capitalization     99
Broad Market Index     100
Funds Classified by Market Capitalization of Investments     101
Style     104
International Funds     109
Sector     114
Specialty Funds     122
Commodity     125
Currency     125
Fixed Income     126
Support and Resistance with Pivots     129
Pivot Points and ETFs     130
Moving Averages and ETFs     133
What about Swing Trading?     135
ETF Money Management     145
Margin-to-Equity Parameter     145
Short Selling: Securities and ETFs     153
Short Selling Securities     154
Short Selling ETFs     154
Hedging Your Portfolio     156
ETF Arbitrage and Spreading     159
Forms of Arbitrage     160
ETF Arbitrage     161
Advantages of Spreading      162
Identifying Arbitrage Opportunities     163
Options for ETFs     165
Four Basic Strategies     166
Option Terminology     167
Option Strategies     169
Evaluating ETFs     173
Price/Earnings Ratio     173
Price/Sales Ratio     174
Financial Ratios     175
Analyze the Company's Profitability     176
Getting the Research Done     180
ETFs and Market Activity     183
Read the Trends ... and That Includes ETFs     184
Trade in Terms of Probability     187
Design, Maintain, and Manipulate Your ETF Portfolio     191
Develop Your "Watch List" of ETFs     191
Export Your Portfolio into Excel     194
Maintain and Manipulate Your Portfolio     197
Two Significant Trading Strategies     199
European ETFs     203
Invest in European ETFs     204
ETF Choices     205
ETF Managers-Europe and the United States     205
Taxes     209
Regulation     210
Strategies     211
European Currency ETFs     211
Europe Is Not One Country      212
Eurozone Issues     212
ETF Practical Applications     223
Navigating Web Pages     224
Examine Typical ETF Screens     225
Herd Mentality     232
ETF Spreads     233
One-on-One Interviews: Leading ETF Providers     241
American Stock Exchange: The Birthplace of Exchange-Traded Funds     242
Dow Jones     246
iShares Germany     250
Keefe, Bruyette, and Woods (KBW)     256
MSCI BARRA     260
Van Eck Global     265
WisdomTree     268
XShares and HealthShares     275
U.S. ETFs and Trading Volume as of October 1, 2007     287
SPDR Strategies     313
Building a Customized and Diversified Equity Portfolio That Matches Your Specific Objective     313
Manage Risk through Asset Allocation by Sector     315
Rebalance Portfolio Based on Current Sector Weightings     317
Gain Diversified Access to Attractive Investment Themes     318
Enhance After-Tax Returns with Tax Swaps     319
Use ETF Flexibility to Hedge Concentrated Positions     320
Web Sites     323
www.finance.yahoo.com     323
www.etfguide.com      325
www.etfconnect.com     326
www.indexuniverse.com     327
www.finra.org     328
www.amex.com/etf/EtMain.jsp     330
www.fidelity.com     331
www.geckosoftware.com     333
www.investors.com/etf     333
www.lrosenberg.com     334
www.seekingalpha.com     335
www.cheatthestreet.com     336
www.vanguard.com     336
www.optionsxpress.com     337
Endnotes     339
Bibliography     347
Index     351