{"id":47375,"date":"2021-09-13T09:16:29","date_gmt":"2021-09-13T13:16:29","guid":{"rendered":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/"},"modified":"2024-10-30T15:55:15","modified_gmt":"2024-10-30T19:55:15","slug":"stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good","status":"publish","type":[3762],"link":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/","title":{"rendered":"Stigma surrounding synthetic ETFs should be put to rest for good"},"content":{"rendered":"<div  class=\"bbg-row-container\">\n    <style>section[data-anchor=row-6a094d2da4428]::before {\n\t\t\t\tbackground-color: #eeeeee;\n\t\t\t}<\/style>\n    <section class=\"bbg-row bg--custom-color  bg--eeeeee text--black bbg-row--full-bg-bleed\" data-anchor='row-6a094d2da4428'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8 bbg-column--valign-bottom\"\n    style=\"\"\n    >\n    <p>    <ul class=\"bbg-categories_list\">\n                    <li>\n                <a href=\"https:\/\/www.bloomberg.com\/professional\/insights\/category\/markets\/\" rel=\"category tag\">\n                    Markets\n                <\/a>\n            <\/li>\n                    <li>\n                <a href=\"https:\/\/www.bloomberg.com\/professional\/insights\/category\/trading\/\" rel=\"category tag\">\n                    Trading\n                <\/a>\n            <\/li>\n            <\/ul>\n<div\n    class=\"bbg-spacer\"\n        style=\"height: 24px !important\"\n    >\n<\/div>    <h1 class=\"bbg-metadata bbg-metadata--title\">Stigma surrounding synthetic ETFs should be put to rest for good<\/h1>\n<\/p>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-compact row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-6a094d2daa0cb'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <p><div\n    class=\"bbg-spacer\"\n        style=\"height: 40px !important\"\n    >\n<\/div>    <p class=\"bbg-metadata bbg-metadata--date\">September 13, 2021<\/p>\n<\/p>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none bbg-row--full-bg-bleed\" data-anchor='row-6a094d2dab8d8'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <p><div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><em>This analysis is by Bloomberg Intelligence ETF Analysts Rebecca Sin and Athanasios Psarofagis. It appeared first on the Bloomberg Terminal<\/em><\/p>\n\n<\/div>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p>The stereotype of physical exchange-traded funds (ETFs) being superior to synthetic ones can be put to bed: some synthetic ETFs do outperform their physical counterparts. Depending on the underlying assets, there&#8217;s room for both physical and synthetic to coexist as the needs of investors vary by region and tax jurisdiction.<\/p>\n\n<\/div>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>What are synthetic ETFs?<\/h2>\n<p class=\"bi-text\">Most ETFs are physical in nature, replicating an index by physically buying all securities of the index. An example would be the iShares S&amp;P 500 (CSPX LN), where the ETF physically owns all the securities of the S&amp;P 500. A synthetic ETF would instead use a derivative or swap as the replication method. For example, the iShares S&amp;P 500 Swap UCITS (i500 LN) has a swap agreement which tracks the S&amp;P 500.<\/p>\n<p class=\"bi-text\">In the whole ETF universe, only 1,020 ETFs are synthetic, accounting for approximately 11% of the universe; of that number, 67% are in EMEA, 23% in the Americas and 10% in the Asia-Pacific. From an assets-under-management perspective, almost 70% are from EMEA due to the UCITS scheme.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:1024px\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"604\" height=\"322\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/etf-structures.png\" class=\"bbg-single-image__image attachment-large\" alt=\"ETF Structures\" title=\"etf-structures\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/etf-structures.png 604w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/etf-structures.png 552w\" sizes=\"auto, (max-width: 604px) 100vw, 604px\" \/>\n        \n                <figcaption class=\"bbg-single-image__caption\" style=\"text-align: left\">\n                Source: Bloomberg Intelligence\n        <\/figcaption>\n            <\/figure>\n<\/div>\n\n<div class=\"bbg-interstitial\" aria-label=\"interstitial\" tabindex=\"0\">\n\t<style>\n\t\t.bbg-interstitial #card_1.bbg-card_hasCta{\n\t\t\tbackground:rgba(0,0,0,0);\n\t\t\tpadding: 104px;\n\t\t\t\n\t\t\t\n\t\t}\n\t\t.bbg-interstitial #card_1.bbg-card_hasCta .bbg-card__content, .bbg-interstitial #card_1.bbg-card_hasCta .bbg-card__content p{\n\t\t\tcolor:inherit;\n\t\t}\n\t\t@media (max-width: 768px) {\n\t\t\t.bbg-interstitial #card_1.bbg-card_hasCta{\n\t\t\t\tpadding: 80px 32px;\n\t\t\t}\n\t\t}\n\t\t@media (max-width: 480px) {\n\t\t\t.bbg-interstitial #card_1.bbg-card_hasCta{\n\t\t\t\tpadding: 80px 18px;\n\t\t\t}\n\t\t}\n\t<\/style>\n\t<div class=\"wpb_content_element bbg-card  bbg-card-dark bbg-card_hasCta has_interstitial\" id=\"card_1\" data-card_type=\"no_image\">\n  \n  \n  <div class=\"bbg-card__innerwrapper\">\n    <div class=\"bbg-card__content\">\n      \n      \n                      <h3 class=\"bbg-card__title\">Research and insights on the EMEA ETF industry directly in your inbox.<\/h3>\n      \n              <div class=\"bbg-card__wysiwyg bb-wysiwyg\"><p>Sign up for the newsletter<\/p>\n<\/div>\n          <\/div>\n\n          \n<div\n  id=\"cta_4061866085664468635\"\n  class=\"wpb_content_element bbg-cta icon icon-arrow\">\n  <style>\n    \n    \n    \n  <\/style>\n  <div\n    class=\"bbg-cta-link link-holder\"\n    data-links-type=\"cta-links\">\n    <p class=\"bbg-cta-p right\">\n      <a\n        class=\"bbg-cta-link link interstitial_cta\"\n        href=\"https:\/\/www.bloomberg.com\/professional\/insights\/newsletter\/\"\n        target=\"_blank\"\n        rel=\"\"\n        data-section-name=\"\"\n                role=\"button\"\n        aria-label=\"Learn more\"\n        >\n                <\/a>\n    <\/p>\n  <\/div>\n<\/div>\n\n      <\/div>\n\n  <\/div>\n\n<\/div>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>Underlying assets matter<\/h2>\n<p class=\"bi-text\">There has been a long debate over synthetic vs. physical ETFs and there are pros and cons to both. Depending on the underlying assets, synthetic may be the preferred choice for replication method. Some ETFs simply can&#8217;t be physical as the cost would outweigh the performance, such as oil ETFs where storage and transport costs to move oil would be very high. For other ETFs, there may be tax advantages to using a swap as opposed to a physical structure.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:1024px\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"604\" height=\"310\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/synthetic-etfs.png\" class=\"bbg-single-image__image attachment-large\" alt=\"Regional Breakdown of Synthetic ETFs\" title=\"synthetic-etfs\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/synthetic-etfs.png 604w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/synthetic-etfs.png 552w\" sizes=\"auto, (max-width: 604px) 100vw, 604px\" \/>\n        \n                <figcaption class=\"bbg-single-image__caption\" style=\"text-align: left\">\n                Source: Bloomberg\n        <\/figcaption>\n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>Performance of synthetic vs. Physical ETFs<\/h2>\n<p class=\"bi-text\">In some cases, synthetic can end up outperforming physical. For example, in September 2020, iShares launched an S&amp;P 500 swaps version (I500 LN) that is identical to its physical S&amp;P 500 ETF (CSPX LN) and on a one-year basis, the swap version has performed 47 basis points better than the physical ETF. The difference in performance is due to the replication method of swap vs. physical.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:1024px\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"594\" height=\"336\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/physical-v-synthetic.png\" class=\"bbg-single-image__image attachment-large\" alt=\"Physical vs. Synthetic: Index Comparison\" title=\"physical-v-synthetic\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/physical-v-synthetic.png 594w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/physical-v-synthetic.png 552w\" sizes=\"auto, (max-width: 594px) 100vw, 594px\" \/>\n        \n                <figcaption class=\"bbg-single-image__caption\" style=\"text-align: left\">\n                Source: Bloomberg\n        <\/figcaption>\n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>Comparing replication methods<\/h2>\n<p class=\"bi-text\">Swap-based ETFs may offer lower trading differences and this is due to a lower withholding-tax drag. For instance, the i500 LN pays 0% withholding tax as the swap\/derivative is exempt. Some physical Irish ETFs, such as the CSPX LN, pay 15% withholding tax on U.S. dividends.<\/p>\n<p class=\"bi-text\">From an AUM perspective, EMEA leads with almost 70% of synthetic ETFs partly because the UCITs regime offers tax benefits for many investors in the region. America has about 30% of synthetic ETFs, mainly in commodities.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"602\" height=\"307\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/synthetic-aum.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Synthetic ETFs by AUM (Millions of Dollars)\" title=\"synthetic-aum\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/synthetic-aum.png 602w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/synthetic-aum.png 552w\" sizes=\"auto, (max-width: 602px) 100vw, 602px\" \/>\n        \n                <figcaption class=\"bbg-single-image__caption\" style=\"text-align: left\">\n                Source: Bloomberg\n        <\/figcaption>\n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>Not All synthetic ETFs are created equals<\/h2>\n<p class=\"bi-text\">Even among S&amp;P 500 synthetic ETFs, performance isn&#8217;t equal &#8212; it can differ depending on choice of swap counterparty, whether the swap is written on the gross or net index, the cost of managing the fund, and the fee structure (not all swap-fee structures are represented in the management fee). A swap written on a net benchmark may be more volatile and can lead to a higher tracking error, which is the result of implied vs. expected dividends priced into the swap. Looking at the fee structures of five ETFs, even though Invesco is the cheapest, iShares has the best performance.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"586\" height=\"281\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/comparison-of-synth.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Comparison of Synthetic ETFs\" title=\"comparison-of-synth\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/comparison-of-synth.png 586w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/10\/comparison-of-synth.png 552w\" sizes=\"auto, (max-width: 586px) 100vw, 586px\" \/>\n        \n                <figcaption class=\"bbg-single-image__caption\" style=\"text-align: left\">\n                Source: Bloomberg\n        <\/figcaption>\n            <\/figure>\n<\/div>\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none bbg-row--full-bg-bleed\" data-anchor='row-6a094d2dbb9d1'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <style>section[data-anchor=row-6a094d2dbd301]::before {\n\t\t\t\tbackground-color: #eeeeee;\n\t\t\t}<\/style>\n    <section class=\"bbg-row bg--custom-color  bg--eeeeee text--black bbg-row--full-bg-bleed\" data-anchor='row-6a094d2dbd301'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>Recommended for you<\/h2>\n\n<\/div>\n<div\n    class=\"bbg-spacer\"\n        style=\"height: 24px !important\"\n    >\n<\/div><script>\n    window.feed = window.feed || {};\n    window.feed['6a094d2dc054f'] = {\"config\":{\"uuid\":\"\",\"title\":\"\",\"filter_label\":\"\",\"post_type\":\"post\",\"order_by\":\"date\",\"direction\":\"desc\",\"show_date\":\"no\",\"show_excerpt\":\"no\",\"display\":\"limit\",\"filter\":\"OR\",\"max_items\":\"3\",\"skip_cache\":\"no\",\"feed_style\":\"grid\",\"published_date\":\"\",\"show_cta\":\"\",\"featured_image\":\"yes\",\"el_class\":\"\",\"terms_post\":\"\",\"terms_page\":\"\",\"terms_attachment\":\"\",\"terms_webinar\":\"\",\"terms_bbmegamenu\":\"\",\"terms_directory\":\"\",\"terms_datalayer\":\"\",\"terms_templatera\":\"\",\"terms_bbg-fourofour\":\"\",\"terms_reusable\":\"\",\"terms_cookie_items\":\"\",\"terms_bbl_email_subscriber\":\"\",\"terms_dynamic_table_ticker\":\"\",\"terms_bfix\":\"\",\"terms_quicklinks\":\"\",\"terms_interstitial\":\"\",\"terms_slide\":\"\",\"terms_gated_content_form\":\"\",\"terms_site_alert\":\"\",\"terms_country\":\"\",\"terms_region\":\"\",\"terms\":\"\"},\"cpt\":{\"name\":\"post\",\"label\":\"Posts\",\"labels\":{\"name\":\"Posts\",\"singular_name\":\"Post\",\"add_new\":\"Add New\",\"add_new_item\":\"Add New Post\",\"edit_item\":\"Edit Post\",\"new_item\":\"New Post\",\"view_item\":\"View Post\",\"view_items\":\"View Posts\",\"search_items\":\"Search Posts\",\"not_found\":\"No posts found.\",\"not_found_in_trash\":\"No posts found in Trash.\",\"parent_item_colon\":null,\"all_items\":\"All Posts\",\"archives\":\"Post Archives\",\"attributes\":\"Post Attributes\",\"insert_into_item\":\"Insert into post\",\"uploaded_to_this_item\":\"Uploaded to this post\",\"featured_image\":\"Featured image\",\"set_featured_image\":\"Set featured image\",\"remove_featured_image\":\"Remove featured image\",\"use_featured_image\":\"Use as featured image\",\"filter_items_list\":\"Filter posts list\",\"filter_by_date\":\"Filter by date\",\"items_list_navigation\":\"Posts list navigation\",\"items_list\":\"Posts list\",\"item_published\":\"Post published.\",\"item_published_privately\":\"Post published privately.\",\"item_reverted_to_draft\":\"Post reverted to draft.\",\"item_trashed\":\"Post trashed.\",\"item_scheduled\":\"Post scheduled.\",\"item_updated\":\"Post updated.\",\"item_link\":\"Post Link\",\"item_link_description\":\"A link to a post.\",\"menu_name\":\"Posts\",\"name_admin_bar\":\"Post\"},\"description\":\"\",\"public\":true,\"hierarchical\":false,\"exclude_from_search\":false,\"publicly_queryable\":true,\"show_ui\":true,\"show_in_menu\":true,\"show_in_nav_menus\":true,\"show_in_admin_bar\":true,\"menu_position\":5,\"menu_icon\":\"dashicons-admin-post\",\"capability_type\":\"post\",\"map_meta_cap\":true,\"register_meta_box_cb\":null,\"taxonomies\":[],\"has_archive\":false,\"query_var\":false,\"can_export\":true,\"delete_with_user\":true,\"template\":[],\"template_lock\":false,\"_builtin\":true,\"_edit_link\":\"post.php?post=%d\",\"cap\":{\"edit_post\":\"edit_post\",\"read_post\":\"read_post\",\"delete_post\":\"delete_post\",\"edit_posts\":\"edit_posts\",\"edit_others_posts\":\"edit_others_posts\",\"delete_posts\":\"delete_posts\",\"publish_posts\":\"publish_posts\",\"read_private_posts\":\"read_private_posts\",\"read\":\"read\",\"delete_private_posts\":\"delete_private_posts\",\"delete_published_posts\":\"delete_published_posts\",\"delete_others_posts\":\"delete_others_posts\",\"edit_private_posts\":\"edit_private_posts\",\"edit_published_posts\":\"edit_published_posts\",\"create_posts\":\"edit_posts\"},\"rewrite\":false,\"show_in_rest\":true,\"rest_base\":\"posts\",\"rest_namespace\":\"wp\\\/v2\",\"rest_controller_class\":\"WP_REST_Posts_Controller\",\"rest_controller\":{},\"revisions_rest_controller_class\":false,\"revisions_rest_controller\":{},\"autosave_rest_controller_class\":false,\"autosave_rest_controller\":{},\"late_route_registration\":false},\"taxonomies\":[{\"taxonomy\":\"post_format\",\"terms\":[{\"term_id\":33,\"name\":\"Link\",\"slug\":\"post-format-link\",\"term_group\":0,\"term_taxonomy_id\":33,\"taxonomy\":\"post_format\",\"description\":\"\",\"parent\":0,\"count\":12,\"filter\":\"raw\"},{\"term_id\":666,\"name\":\"Link\",\"slug\":\"post-format-link\",\"term_group\":0,\"term_taxonomy_id\":666,\"taxonomy\":\"post_format\",\"description\":\"\",\"parent\":0,\"count\":2,\"filter\":\"raw\"}]},{\"taxonomy\":\"post_series\",\"terms\":{\"0\":{\"term_id\":3751,\"name\":\"Asia Centric\",\"slug\":\"asia-centric\",\"term_group\":0,\"term_taxonomy_id\":3751,\"taxonomy\":\"post_series\",\"description\":\"\",\"parent\":0,\"count\":51,\"filter\":\"raw\"},\"1\":{\"term_id\":3741,\"name\":\"Bloomberg Expert Access\",\"slug\":\"bloomberg-expert-access\",\"term_group\":0,\"term_taxonomy_id\":3741,\"taxonomy\":\"post_series\",\"description\":\"\",\"parent\":0,\"count\":10,\"filter\":\"raw\"},\"2\":{\"term_id\":3739,\"name\":\"Bloomberg Pro Tips\",\"slug\":\"bloomberg-pro-tips\",\"term_group\":0,\"term_taxonomy_id\":3739,\"taxonomy\":\"post_series\",\"description\":\"\",\"parent\":0,\"count\":59,\"filter\":\"raw\"},\"4\":{\"term_id\":3743,\"name\":\"Functions for the Market\",\"slug\":\"ffm\",\"term_group\":0,\"term_taxonomy_id\":3743,\"taxonomy\":\"post_series\",\"description\":\"\",\"parent\":0,\"count\":7,\"filter\":\"raw\"},\"5\":{\"term_id\":3770,\"name\":\"Market Dialogues\",\"slug\":\"market-dialogues\",\"term_group\":0,\"term_taxonomy_id\":3770,\"taxonomy\":\"post_series\",\"description\":\"\",\"parent\":0,\"count\":11,\"filter\":\"raw\"},\"6\":{\"term_id\":3742,\"name\":\"Need to Know\",\"slug\":\"need-to-know\",\"term_group\":0,\"term_taxonomy_id\":3742,\"taxonomy\":\"post_series\",\"description\":\"\",\"parent\":0,\"count\":15,\"filter\":\"raw\"},\"7\":{\"term_id\":3798,\"name\":\"Pricing Insights\",\"slug\":\"pricing-insights\",\"term_group\":0,\"term_taxonomy_id\":3798,\"taxonomy\":\"post_series\",\"description\":\"\",\"parent\":0,\"count\":6,\"filter\":\"raw\"},\"8\":{\"term_id\":3740,\"name\":\"Terminal Essentials\",\"slug\":\"terminal-essentials\",\"term_group\":0,\"term_taxonomy_id\":3740,\"taxonomy\":\"post_series\",\"description\":\"\",\"parent\":0,\"count\":6,\"filter\":\"raw\"}}},{\"taxonomy\":\"type\",\"terms\":{\"0\":{\"term_id\":3762,\"name\":\"Article\",\"slug\":\"article\",\"term_group\":0,\"term_taxonomy_id\":3762,\"taxonomy\":\"type\",\"description\":\"\",\"parent\":0,\"count\":1646,\"filter\":\"raw\"},\"1\":{\"term_id\":3763,\"name\":\"Case Study\",\"slug\":\"case-study\",\"term_group\":0,\"term_taxonomy_id\":3763,\"taxonomy\":\"type\",\"description\":\"\",\"parent\":0,\"count\":41,\"filter\":\"raw\"},\"3\":{\"term_id\":3765,\"name\":\"Podcast\",\"slug\":\"podcast\",\"term_group\":0,\"term_taxonomy_id\":3765,\"taxonomy\":\"type\",\"description\":\"\",\"parent\":0,\"count\":504,\"filter\":\"raw\"},\"4\":{\"term_id\":3815,\"name\":\"Press Release\",\"slug\":\"press-release\",\"term_group\":0,\"term_taxonomy_id\":3815,\"taxonomy\":\"type\",\"description\":\"\",\"parent\":0,\"count\":81,\"filter\":\"raw\"},\"5\":{\"term_id\":3766,\"name\":\"Q&amp;A\",\"slug\":\"qa\",\"term_group\":0,\"term_taxonomy_id\":3766,\"taxonomy\":\"type\",\"description\":\"\",\"parent\":0,\"count\":101,\"filter\":\"raw\"},\"6\":{\"term_id\":3767,\"name\":\"Report\",\"slug\":\"report\",\"term_group\":0,\"term_taxonomy_id\":3767,\"taxonomy\":\"type\",\"description\":\"\",\"parent\":0,\"count\":78,\"filter\":\"raw\"},\"8\":{\"term_id\":3768,\"name\":\"Video\",\"slug\":\"video\",\"term_group\":0,\"term_taxonomy_id\":3768,\"taxonomy\":\"type\",\"description\":\"\",\"parent\":0,\"count\":135,\"filter\":\"raw\"}}}],\"excluded_taxonomies\":{\"\":[]},\"post_id\":47375};\n<\/script>\n<div class=\"feed\" data-id=\"6a094d2dc054f\"><\/div>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--white bbg-row--full-bg-bleed\" data-anchor='row-6a094d2dc148b'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column\"\n    style=\"\"\n    >\n    <div class=\"bbg-interstitial\" aria-label=\"interstitial\" tabindex=\"0\">\n\t<style>\n\t\t.bbg-interstitial #card_2.bbg-card_hasCta{\n\t\t\tbackground: url(https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Interstitial_bg.png);\n\t\t\t\tbackground-repeat: no-repeat;\n\t\t\t\tbackground-position: center center;\n\t\t\t\tbackground-size: cover;\n\t\t\tpadding: 104px;\n\t\t\t\n\t\t\t\n\t\t}\n\t\t.bbg-interstitial #card_2.bbg-card_hasCta .bbg-card__content, .bbg-interstitial #card_2.bbg-card_hasCta .bbg-card__content p{\n\t\t\tcolor:white;\n\t\t}\n\t\t@media (max-width: 768px) {\n\t\t\t.bbg-interstitial #card_2.bbg-card_hasCta{\n\t\t\t\tpadding: 80px 32px;\n\t\t\t}\n\t\t}\n\t\t@media (max-width: 480px) {\n\t\t\t.bbg-interstitial #card_2.bbg-card_hasCta{\n\t\t\t\tpadding: 80px 18px;\n\t\t\t}\n\t\t}\n\t<\/style>\n\t<div class=\"wpb_content_element bbg-card  bbg-card-dark bbg-card_hasCta has_interstitial\" id=\"card_2\" data-card_type=\"no_image\">\n  \n  \n  <div class=\"bbg-card__innerwrapper\">\n    <div class=\"bbg-card__content\">\n      \n      \n                      <h3 class=\"bbg-card__title\">Request a Demo<\/h3>\n      \n              <div class=\"bbg-card__wysiwyg bb-wysiwyg\"><p>Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Now, let us do that for you.<\/p>\n<\/div>\n          <\/div>\n\n          \n<div\n  id=\"cta_1425080595430322967\"\n  class=\"wpb_content_element bbg-cta icon icon-arrow\">\n  <style>\n    \n    \n    \n  <\/style>\n  <div\n    class=\"bbg-cta-link link-holder\"\n    data-links-type=\"cta-links\">\n    <p class=\"bbg-cta-p right\">\n      <a\n        class=\"bbg-cta-link link interstitial_cta\"\n        href=\"https:\/\/www.bloomberg.com\/professional\/request-demo\/\"\n        target=\"\"\n        rel=\"\"\n        data-section-name=\"\"\n                role=\"button\"\n        aria-label=\"Learn more\"\n        >\n                <\/a>\n    <\/p>\n  <\/div>\n<\/div>\n\n      <\/div>\n\n  <\/div>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Some synthetic ETFs do outperform their physical counterparts, but there\u2019s room for both to coexist as the needs of investors vary. We put the superior ETFs stereotype to bed here.<\/p>\n","protected":false},"author":1686,"featured_media":37702,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"template-article.php","format":"standard","meta":{"_yoast_wpseo_primary_category":"","footnotes":""},"categories":[453,444],"tags":[614,565,3675,547,577,445],"series":[],"class_list":["post-47375","post","type-post","status-publish","format-standard","hentry","category-markets","category-trading","tag-614","tag-bloomberg-intelligence","tag-digital-asset-indices","tag-indices","tag-research","tag-sales-and-trading","type-article"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.11 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Stigma surrounding synthetic ETFs should be put to rest for good | Insights | Bloomberg Professional Services<\/title>\n<meta name=\"description\" content=\"Some synthetic ETFs do outperform their physical counterparts, but there\u2019s room for both to coexist as the needs of investors vary. We put the superior ETFs stereotype to bed here.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Stigma surrounding synthetic ETFs should be put to rest for good | Insights | Bloomberg Professional Services\" \/>\n<meta property=\"og:description\" content=\"Some synthetic ETFs do outperform their physical counterparts, but there\u2019s room for both to coexist as the needs of investors vary. We put the superior ETFs stereotype to bed here.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/\" \/>\n<meta property=\"og:site_name\" content=\"Bloomberg Professional Services\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/bloomberglp\" \/>\n<meta property=\"article:published_time\" content=\"2021-09-13T13:16:29+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-10-30T19:55:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/assets.bbhub.io\/image\/v1\/convert?type=auto&amp;url=https%3A%2F%2Fassets.bbhub.io%2Fprofessional%2Fsites%2F10%2F362952441.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"960\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"pchoudhury2\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@theterminal\" \/>\n<meta name=\"twitter:site\" content=\"@theterminal\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"pchoudhury2\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/\"},\"author\":{\"name\":\"pchoudhury2\",\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#\/schema\/person\/70054e3453c0627a49da6d3e76b7ae74\"},\"headline\":\"Stigma surrounding synthetic ETFs should be put to rest for good\",\"datePublished\":\"2021-09-13T13:16:29+00:00\",\"dateModified\":\"2024-10-30T19:55:15+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/\"},\"wordCount\":\"812\",\"publisher\":{\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#organization\"},\"keywords\":[\"430037\",\"Bloomberg Intelligence\",\"Digital Assets Indices\",\"Indices\",\"Research\",\"Sales and Trading\"],\"articleSection\":[\"Markets\",\"Trading\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/\",\"url\":\"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/\",\"name\":\"Stigma surrounding synthetic ETFs should be put to rest for good | Insights | Bloomberg Professional Services\",\"isPartOf\":{\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#website\"},\"datePublished\":\"2021-09-13T13:16:29+00:00\",\"dateModified\":\"2024-10-30T19:55:15+00:00\",\"description\":\"Some synthetic ETFs do outperform their physical counterparts, but there\u2019s room for both to coexist as the needs of investors vary. We put the superior ETFs stereotype to bed here.\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#website\",\"url\":\"https:\/\/www.bloomberg.com\/professional\/\",\"name\":\"Bloomberg Professional Services\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.bloomberg.com\/professional\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#organization\",\"name\":\"Bloomberg Professional Services\",\"url\":\"https:\/\/www.bloomberg.com\/professional\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/assets.bbhub.io\/image\/v1\/convert?type=auto&amp;url=https%3A%2F%2Fassets.bbhub.io%2Fprofessional%2Fsites%2F41%2Flogo.png\",\"contentUrl\":\"https:\/\/assets.bbhub.io\/image\/v1\/convert?type=auto&amp;url=https%3A%2F%2Fassets.bbhub.io%2Fprofessional%2Fsites%2F41%2Flogo.png\",\"width\":\"512\",\"height\":\"103\",\"caption\":\"Bloomberg Professional Services\"},\"image\":{\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.instagram.com\/bloomberg\/\",\"https:\/\/www.linkedin.com\/showcase\/bloomberg-professional-service\/\",\"https:\/\/www.facebook.com\/bloomberglp\",\"https:\/\/twitter.com\/theterminal\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.bloomberg.com\/professional\/#\/schema\/person\/70054e3453c0627a49da6d3e76b7ae74\",\"name\":\"Bloomberg Professional Services\",\"url\":\"https:\/\/www.bloomberg.com\/professional\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Stigma surrounding synthetic ETFs should be put to rest for good | Insights | Bloomberg Professional Services","description":"Some synthetic ETFs do outperform their physical counterparts, but there\u2019s room for both to coexist as the needs of investors vary. We put the superior ETFs stereotype to bed here.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/","og_locale":"en_US","og_type":"article","og_title":"Stigma surrounding synthetic ETFs should be put to rest for good | Insights | Bloomberg Professional Services","og_description":"Some synthetic ETFs do outperform their physical counterparts, but there\u2019s room for both to coexist as the needs of investors vary. We put the superior ETFs stereotype to bed here.","og_url":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/","og_site_name":"Bloomberg Professional Services","article_publisher":"https:\/\/www.facebook.com\/bloomberglp","article_published_time":"2021-09-13T13:16:29+00:00","article_modified_time":"2024-10-30T19:55:15+00:00","og_image":[{"width":1600,"height":960,"url":"https:\/\/assets.bbhub.io\/image\/v1\/convert?type=auto&amp;url=https%3A%2F%2Fassets.bbhub.io%2Fprofessional%2Fsites%2F10%2F362952441.jpg","type":"image\/jpeg"}],"author":"pchoudhury2","twitter_card":"summary_large_image","twitter_creator":"@theterminal","twitter_site":"@theterminal","twitter_misc":{"Written by":"pchoudhury2","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/#article","isPartOf":{"@id":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/"},"author":{"name":"pchoudhury2","@id":"https:\/\/www.bloomberg.com\/professional\/#\/schema\/person\/70054e3453c0627a49da6d3e76b7ae74"},"headline":"Stigma surrounding synthetic ETFs should be put to rest for good","datePublished":"2021-09-13T13:16:29+00:00","dateModified":"2024-10-30T19:55:15+00:00","mainEntityOfPage":{"@id":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/"},"wordCount":"812","publisher":{"@id":"https:\/\/www.bloomberg.com\/professional\/#organization"},"keywords":["430037","Bloomberg Intelligence","Digital Assets Indices","Indices","Research","Sales and Trading"],"articleSection":["Markets","Trading"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/","url":"https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/","name":"Stigma surrounding synthetic ETFs should be put to rest for good | Insights | Bloomberg Professional Services","isPartOf":{"@id":"https:\/\/www.bloomberg.com\/professional\/#website"},"datePublished":"2021-09-13T13:16:29+00:00","dateModified":"2024-10-30T19:55:15+00:00","description":"Some synthetic ETFs do outperform their physical counterparts, but there\u2019s room for both to coexist as the needs of investors vary. We put the superior ETFs stereotype to bed here.","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.bloomberg.com\/professional\/insights\/trading\/stigma-surrounding-synthetic-etfs-should-be-put-to-rest-for-good\/"]}]},{"@type":"WebSite","@id":"https:\/\/www.bloomberg.com\/professional\/#website","url":"https:\/\/www.bloomberg.com\/professional\/","name":"Bloomberg Professional Services","description":"","publisher":{"@id":"https:\/\/www.bloomberg.com\/professional\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.bloomberg.com\/professional\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.bloomberg.com\/professional\/#organization","name":"Bloomberg Professional Services","url":"https:\/\/www.bloomberg.com\/professional\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.bloomberg.com\/professional\/#\/schema\/logo\/image\/","url":"https:\/\/assets.bbhub.io\/image\/v1\/convert?type=auto&amp;url=https%3A%2F%2Fassets.bbhub.io%2Fprofessional%2Fsites%2F41%2Flogo.png","contentUrl":"https:\/\/assets.bbhub.io\/image\/v1\/convert?type=auto&amp;url=https%3A%2F%2Fassets.bbhub.io%2Fprofessional%2Fsites%2F41%2Flogo.png","width":"512","height":"103","caption":"Bloomberg Professional Services"},"image":{"@id":"https:\/\/www.bloomberg.com\/professional\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.instagram.com\/bloomberg\/","https:\/\/www.linkedin.com\/showcase\/bloomberg-professional-service\/","https:\/\/www.facebook.com\/bloomberglp","https:\/\/twitter.com\/theterminal"]},{"@type":"Person","@id":"https:\/\/www.bloomberg.com\/professional\/#\/schema\/person\/70054e3453c0627a49da6d3e76b7ae74","name":"Bloomberg Professional Services","url":"https:\/\/www.bloomberg.com\/professional"}]}},"_links":{"self":[{"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/posts\/47375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/users\/1686"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/comments?post=47375"}],"version-history":[{"count":2,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/posts\/47375\/revisions"}],"predecessor-version":[{"id":97547,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/posts\/47375\/revisions\/97547"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/media\/37702"}],"wp:attachment":[{"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/media?parent=47375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/categories?post=47375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/tags?post=47375"},{"taxonomy":"post_series","embeddable":true,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/series?post=47375"},{"taxonomy":"type","embeddable":true,"href":"https:\/\/www.bloomberg.com\/professional\/wp-json\/wp\/v2\/type?post=47375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}