Synthetic ETF replication explained
With synthetic ETFs growing in popularity, we discuss their potential advantages over physical replication of an index.
The internet impacts every part of our lives, but the underlying technology was first used simply to share information between two computers. Just imagine if you could have foreseen how that technology would progress and been able to identify companies that would drive global change.
The companies that would find new ways to use the technology are now among the largest in the world: Twitter pioneered a way for us to create information, Dropbox for storing information, Netflix for transmitting information and Apple for consuming information.
You could draw some comparisons between the internet and blockchain. With blockchain technology still in its early days, we think the potential for changing the global economy is underappreciated by the market. This could provide an opportunity for investors who can capture this hidden potential.
Investment strategies involve numerous risks. Investors should note that the price of your investment may go down as well as up. As a result you may not get back the amount of capital you invest.
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Data as at February 2021, unless otherwise stated.
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