What are you views on Synthetic ETFs?

tg99

londoninvestor wrote: »

And typically these will be positions on major stock indexes: either futures on an exchange, or swaps with large counterparties that are required to have daily variation margin posted (under the rules that have been in place since 2016ish).

Not something I lose sleep over as a small part of a fund.

Some may also use options and futures and other derivatives for risk management purposes, e.g. put option on FTSE 100 to provide some protection against downside risk. Would typically only be a v small part of the portfolio though and not particularly common. Some managers may also use currency forwards to hedge fx risk where they are taking off benchmark positions (e.g, UK fund with FTSE All Share benchmark whereby manager is permitted to invest up to 10% in overseas equities).