Exposed to a broader future

ETFs may be simple but can they compete on cost with a futures-led strategy?

Hedge-fund managers desiring pan-European equity exposure are presented with a wealth of choices. Historically, they have used futures, swaps and program trades to gain relevant exposure. However, in recent years, exchange-traded funds (ETFs) have become an increasingly interesting option to hedge funds.

ETFs are funds that trade like stocks and offer immediate, diversified exposure to a market segment in one trade. They are not derivatives and do not require any margin or mark to market. They