Koris plans unbiased review of ETFs to boost clarity

In a bid to provide more clarity, Koris International’s chief executive said his firm planned to publish monthly quantitative analysis on the main ETFs, including“unbiased analysis” on ETFs tracking the main indices.

He said the analysis is not intended to provide a ranking of these funds, but instead to “highlight their distinctive elements to investors, so that they can make choices in full knowledge of the cause”.

Mr Giraud’s comments came following a recent commitment by his firm to campaign for large scale transparency on ETF risks and performance.

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He said: “ETFs are without any doubt one of the most fascinating developments the financial industry has witnessed over the past 20 years.

“But transaction costs, dividend treatment, tax assumptions, replication strategies, discrepancies between exchange trading times and other intricacies inherent to managing an ETF have resulted in those funds requiring fairly complex financial, regulatory and operational setups, as well as large disparities in cost, performance and risk.”

The first analysis on ETFs is devoted to the MSCI emerging markets index and underlines the disparity that ETFs exhibit in terms of cost, risk and performances.

Adviser view

Mike Pendergast, IFA at Cheshire-based Zen Financial Services, said: “I haven’t used ETFs as transparency is a problem and it’s quite risky for us to recommend them to clients. An independent assessment would be useful.”