Exchange treded funds and an application for measurement of performances of exchange treded funds

Accepted as a one of the most important financial innovation of last decades, the development of exchange traded funds world wide attracted attention of Turkish capital market and some studies have started on the subject. As an outcome of these studies, Turkey was introduced with exchange traded funds in 2005. Based on that, this thesis dicusses the development and other features of exchange traded funds, which consist of a basket of securities and known as the hybrid of mutual fund and share, in the world and Turkey. In the chapter of this study devoted to implementation, the performances of exchange traded funds are measured with respect to benchmarking ?MKB 100? ve ?A Tipi Yatırım Fonları? indexes in the period of the 58 half week (03.02.2006 to 25.08.2006). As a result of performance measure, the performances of exchange traded funds were observed to be close to the performances of indexes. The results demonstrate that the exchange traded funds in Turkey have adapted themselves to market and their returns are close to market returns. Other work in this chapter is to investigate the effect of monthly weight changes of shares in in the portfolio of exchange traded funds to the monthly returns of exchange traded funds in Turkey in the period of the 7 month (February 2006 to August 2006) . In spite that there is an adverse relationship between the weight changes of shares in portfolio of exchange traded funds and the return of exchange traded funds, this relationship is not statisticaly significiant due to the insufficiency of data period. But the results show that rather than being profit oriented, this activity?s purpose is to keep the correlation rate between exchange traded funds and its tracking index