Abstract: Exchange traded funds (ETFs) achieve their investment objectives by either owning a portfolio of securities (physical ETFs) or entering into swap agreements that deliver the returns of pre-specified indexes (synthetic ETFs). In this note, we provide an overview of how synthetic ETFs work and analyze collateralization levels for a group of synthetic ETFs that voluntarily report their collateral baskets.
File(s): File format is text/html https://www.federalreserve.gov/econres/notes/feds-notes/synthetic-etfs-20170810.htm
Part of Series: FEDS Notes
Publication Date: 2017-08-10