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Recent developments in exchange‐traded fund literature: Pricing efficiency, tracking ability, and effects on underlying securities

Narat Charupat (DeGroote School of Business, McMaster University, Hamilton, Canada)
Peter Miu (DeGroote School of Business, McMaster University, Hamilton, Canada)

Managerial Finance

ISSN: 0307-4358

Article publication date: 12 April 2013

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Abstract

Purpose

The purpose of this paper is to provide a brief review of three strands of the literature on exchange‐traded funds.

Design/methodology/approach

The paper starts with a review of the history of the growth of exchange‐traded funds and their characteristics. The paper then examines the key factors and findings of the existing studies on, respectively, the pricing efficiency, the tracking ability/performance, and the impact on underlying securities of exchange‐traded funds.

Findings

Although there has been a substantial amount of research conducted to advance our knowledge on the trading, management, and effect of exchange‐traded funds, the findings are still far from conclusive in addressing a number of research questions.

Practical implications

Investors and other market participants will find this review informative in enhancing the understanding of exchange‐traded funds.

Originality/value

By highlighting the general theme of the related research findings, the paper provides a systematic review of the existing literature that future researchers can utilize in developing their research agenda.

Keywords

Citation

Charupat, N. and Miu, P. (2013), "Recent developments in exchange‐traded fund literature: Pricing efficiency, tracking ability, and effects on underlying securities", Managerial Finance, Vol. 39 No. 5, pp. 427-443. https://doi.org/10.1108/03074351311313816

Publisher

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Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited

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