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Perspective

Feb. 18, 2011

Exchange-traded Funds: Uncompensated Risks From Securities Lending

Common industry practices for managing exchange-traded funds present risks unknown to most investors and trustees. By Jeffrey W. Loebl.


By Jeffrey W. Loebl


Investors and trustees often use exchange-traded funds (ETFs) to produce market or index returns at a low cost. Often, an ETF strategy is utilized to economically meet the obligations of diversification and to meet the prudent investor standard.


Recent analysis by the Kauffman Foundation and by Bogan Associates LLC raised significant questions about the risks associated with ETFs. Assessing and minimizing risk is a responsibility of...

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