The evaluation of exchange traded funds as for the istitutional ivestors, te idividual ivestors ad abitragers

Investment volume of ETFs is rapidly increasing in developedmarkets, especially in US. As comparing the growth trend of the ETFs andthe classical investment funds it can be seen that the importance of thefinancial markets' new invention is growing.ETFs are taking concern of the investors because they are traded inexchanges unlike mutual funds, they are cheap and flexible, they haveadvantage in tax issues and they offer to the investors the opportunity toinvest in various instruments with a single purchase order.In foreign markets, investors are interested in ETFs, which arecomposed of capital market instruments and whose participation certificatesare traded in exchanges, as having low administration costs due to passivemanagement.Besides, unlike investing in mutual funds, investing in ETFs investorsare facing extra costs which are commission costs and spread. However,when investigating the US market where the ETFs market is well developed itcan be seen that, especially in the long run, as investing in ETFs, benefit oflow cost ratio and advantage in tax issues overcomes the negative effect ofcommissions and spread. On the other hand, because ETFs offer theopportunity of intra day investing in indices, this instrument becomes animportant alternative for the veteran investors.In this study, the ETFs are evaluated as for the institutional investors,individual investors and arbitragers as regarding the differentiating propertiesof ETFs from mutual funds and unit investment trusts.