Lyxor develops ETF efficiency indicator

Lyxor’s research team has looked into the positive performance of ETFs throughout the year and proposed an ETF Efficiency Indicator for investors to address the issue of evaluating their performance.

“In theory, ETFs following the same index should all provide very similar investment returns as they are designed to closely replicate the indices that they track. In practice, however, these returns can vary significantly,” Lyxor report said

In order to match market expectations, Lyxor has developed an ‘ETF Efficiency Indicator’, which is a solution used to compare and evaluate all ETFs.

The ETF Efficiency Indicator looks at an ETF’s tracking difference, tracking error and the key metric of secondary market liquidity and combines this into a single score. This score provides a way to compare funds that are based on the same index, which is based on observable quantitative criteria.

Click here to read full report [asset_library_tag 7355,ETF Efficiency Indicator]

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