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ETF Specialist

There Is a Better Way to Push for Better Labeling of ETPs

I agree with the spirit of the ETP industry coalition's proposal, but not the specifics.

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Not all types of exchange-traded products, or ETPs, are created equal. But oftentimes investors unwittingly treat them as though they are. There are important differences in how different types of ETPs are structured as well as the exposures that they provide. The recent rout in the oil markets and the knock-on effects on oil-related ETPs was a not-so-gentle reminder of this fact.

Investors need to be aware of these differences. I believe that better labeling is long overdue and would help investors to more confidently navigate the menu of more than 2,300 ETPs.

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Ben Johnson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.