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The ETF Strategist: Balancing Risk and Reward for Superior Returns | 
 enlarge | Author: Russ Koesterich
Publisher: Portfolio Hardcover
Category: Book
List Price: $39.95
Buy New: $17.54
You Save: $22.41 (56%)
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Avg. Customer Rating:  4 reviews
Sales Rank: 275645
Media: Hardcover
Number Of Items: 1
Pages: 272
Shipping Weight (lbs): 1.2
Dimensions (in): 9.1 x 6.1 x 1.2
ISBN: 1591842077
Dewey Decimal Number: 332.6327
EAN: 9781591842071
ASIN: 1591842077
Publication Date: May 29, 2008
Availability: Usually ships in 1-2 business days
Shipping: Expedited shipping available
Condition: New/New; New, unread copy with remainder mark.Get it fast - I ship every weekday; Single DVDs & CDs by 1st class/airmail.
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Product Description
A sophisticated guide to todays hottest investment vehicle exchange traded funds
The ETF Strategist is aimed primarily at investment advisers and sophisticated retail investors who are interested in using exchange traded funds, or using them more effectively than they already do.
Compared with mutual funds, ETFs can offer a better way to diversify risk, target specific sectors or countries, avoid style drift, and maintain a specific asset allocation that might include real estate or commodities.
Previous ETF books have focused on their mechanics, regulation, and other basic information. But The ETF Strategist goes much further, showing how ETFs can improve many aspects of an overall investment strategy. It explores advanced concepts such as alphabeta separation, which basically means dont confuse skill with risk. And it shows how different ETFs can be combined to find the ideal balance of risk and potential reward.
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| Customer Reviews:
 This is a differentiated ETF book January 3, 2009
The `ETF Strategist' is a book about using exchange traded funds as a way to more precisely allocate risk in investment portfolios. Koesterich lays out a framework for thinking about portfolios that is derived from quantitative finance (Chapter 3) - and demonstrates why the ETF is a more powerful innovation than you might at first think.
Each exchange traded fund can be thought of as its own particular strategy - offering `exposure' (beta) to a particular segment of the market. It is not that one particular ETF strategy is superior to all others -- for each strategy will have its own particular cycles and sensitivities to an ever-changing global economy. The more important point here is the connection made between the use of ETF's as an efficient tool to implement a more efficient (risk-adjusted) portfolio.
When constructing portfolios, investors need to think hard about the underlying larger risk factors their portfolio holdings represent. Historically, disproportional emphasis has been placed on security selection in order to `beat' a particular asset class (ie, the S&P 500). Investors would be well-served to focus their efforts on the more important issue of which market segments they would like to have exposure to given their view of the investment landscape -- and to de-emphasize security selection as an area of focus. Without a significant informational edge, security selection techniques will generally assume risk exposures that do not carry incremental returns - resulting in an inefficient portfolio.
An example from November of 2008 - an investor would have done well to expose their portfolio to the bond market during/after the credit market dislocation/opportunity. An ETF such as LQD offers pure, diverse and extremely low-cost exposure to the investment grade corporate segment of the bond market - a segment offering attractive spreads (value) and low risk. Compare this to selecting individual bonds -- where security selection without an `information edge' is only likely to produce incremental risk (issuer credit risk, liquidity risk etc...) without any corresponding benefit in expected returns. Even with a `perceived' significant informational edge, most professional bond (and equity) fund managers still fail with respect to generating true value-add.
The bottom-line is that using ultra low-cost tools such as ETF's to access attractive segments of the market (equity, bond, commodity, real estate) is a powerful concept in that you get instant access to the types of strategies that are the core drivers of portfolio performance without taking security-specific risk (risk that you are not being paid for anyway).
While the second half of the book is much like other ETF books - just the more typical overview of various ETF's - `The ETF Strategist' still does a good overall job of inspiring the reader to re-think their attitudes towards risk -- and a mental framework for balancing risk and return.
F Chris Greene, CFA
 Light on Strategy September 10, 2008
1 out of 1 found this review helpful
Well written and helpful on understanding what ETFs are and their benefits. The addition of a chapter that would give examples of portfolio construction using ETFs would have added punch and really earned the use of the word "Strategy" in the title.
OUTSTANDING book July 4, 2008
1 out of 1 found this review helpful
The author's writing style is easy to read and just repetitive enough to allow concepts to sink in. The nuts and bolts of ETFs are very well covered. This includes how they are created, how they are "indexed", and how they may or may not adequately follow the index they are designed to follow. The author also covers costs of ETFs and tax consequences of ETF investments. ETFs of all varieties are covered from equities and fixed income to commodities and alternative investments. The author did not create a "do it this way" book but rather provided a very comprehensive foundation for understanding ETFs within the larger context of porfolio creation and management.
The author includes some other great pearls of wisdom in the first several chapters that are useful for any investor. This includes a well documented review of the elemental causes for unusually high returns on equity investment that have been experienced since the 1980s until recently. He also provides great insight on the ultra-competitive nature of the markets that individual investors face. This includes a great discussion of the types of risk and how to develop a healthy perspective on risk particularly relative to one's abilities as an investor.
Every individual investor should have this book!!!
MBAs Only June 5, 2008
7 out of 7 found this review helpful
This is an excellent book. Very intelligent and well written. It is NOT a how to do it book.
The first third of the book is totally about the theory of risk vs reward and about how beta can be used to estimate risk and volitility. He does an excellent job of explaining beta.
After that there is a long section on the legal structure of the business entities that offer ETFs.
Following this, about half the book describes a very short list of the available ETFs and describes the sectors to which they offer exposure. Note that "Offer exposure" is as close as it gets to a buy when /sell when / hold when recommendation.
If you are interested in the theory of constructing a portfolio and tweaking the risk relative to the market this book deserves five stars.
If you are looking for a book that tells you "If you expect energy stocks to go up buy XLE." This book rates zero stars.
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