► From Europe? Use Trade Republic to invest in ETFs*: trade.re/Dan ► From the UK? Use Trading 212 to invest in ETFs*^: www.trading212.com/join/MALONE ► ETF Cheatsheet: docs.google.com/spreadsheets/d/12MCbsfl1tem176XgetL0ontIQK2Ba97R96G_ZzOtLNs/edit?usp=sharing
Appreciate such a clear thorough explanation, it is rare to find nuanced financial content online, especially on YT, so I was sceptical when clicking, but now I am subscribed and checking the rest of your videos. I think its more difficult to build an audience, the masses do not want to be so nuanced and want the buzzy/click-bait answer, but I wish you that with time you build a strong community that values such quality and nuance. Cheers man
Much more thorough treatment than most RUclipsrs on the topic. Subbed ❤. I'd be interested to hear your analysis of some of the ESG/Paris Accord compliant ETFs.
Dear friend. I am trying to learn the mechanics of synthetic etf for months. Your video is a world class explanation!!!! My biggest concern is that synthetic ETF= active trading , because of the need to choose collateral portfolio by investment manager
I’m glad you found the video to be useful! Yes, the collateral basket can vary greatly and careful thought needs to be put into your selection before investing
This is a relatively complex topic so if there's any questions or challenges to the information presented just leave a comment and we can discuss it! Do you own any synthetic ETFs?
I didnt understand if as an investor in the synthetic ETF of Invesco im getting the return of the index (for ex. SP500). bc you said onlu 10% is in swap fee
Synthetic replication accumulation ETFs use dividends to be reinvested in the same fund. Do synthetic ETFs do the same? Will they generate dividends to be reinvested in the same fund?
I don't know, but some derivatives markets will make an estimate of cash flow over the term and discount it to present value to determine a cash price. Maybe synthetics typically are priced in a similar way. Oh and then on compounding: when the dividends are discounted to present value, the premium payer can decide if they want to lever up to mimic the effect of compounding (eg, for $100k notional index exposure, maybe some $2000 of expected dividend yield discounts to $1960, so instead of depositing $20k, maybe I increase it to $21960 to increase my index exposure [in advance!] to include expected dividend cash flows). But I'm just reasoning through the logic here.
For me, the additional dividend returns that synthetic ETFs provide doesn't massively outweigh the additional risk that is posed. Investing in the stock market, for some, can be enough of an emotional rollercoaster on it's own never mind adding fear of your chosen fund's counterparty defaulting.
![Best ETFs for European Investors [2025] | S&P 500, All-World, Europe & Emerging Markets](http://i.ytimg.com/vi/1ZuYohV3Nvs/mqdefault.jpg)
► From Europe? Use Trade Republic to invest in ETFs*: trade.re/Dan
► From the UK? Use Trading 212 to invest in ETFs*^: www.trading212.com/join/MALONE
► ETF Cheatsheet: docs.google.com/spreadsheets/d/12MCbsfl1tem176XgetL0ontIQK2Ba97R96G_ZzOtLNs/edit?usp=sharing
Appreciate such a clear thorough explanation, it is rare to find nuanced financial content online, especially on YT, so I was sceptical when clicking, but now I am subscribed and checking the rest of your videos. I think its more difficult to build an audience, the masses do not want to be so nuanced and want the buzzy/click-bait answer, but I wish you that with time you build a strong community that values such quality and nuance. Cheers man
Much more thorough treatment than most RUclipsrs on the topic. Subbed ❤. I'd be interested to hear your analysis of some of the ESG/Paris Accord compliant ETFs.
Just subscribed last night, some very informative videos with detailed commentary and research for retail investors, Dan. Keep it up.
Cheers Adrian!
Great video. Easy to understand
Thanks!
You lost me by 3:52😢😂😂. Too many unfamiliar terms
Stick with it! Synthetics aren’t the easiest of topics but with a few watches it might click
Best video I’ve seem on Synthetic ETFs, thank you so much, I will subscribe 👍
Appreciate it! Welcome!
Best video on the subject, hands on.
Appreciate it
Dear friend. I am trying to learn the mechanics of synthetic etf for months. Your video is a world class explanation!!!!
My biggest concern is that synthetic ETF= active trading , because of the need to choose collateral portfolio by investment manager
I’m glad you found the video to be useful! Yes, the collateral basket can vary greatly and careful thought needs to be put into your selection before investing
Finally!! Thanks very much!
No problem Lawrence, thanks for watching
This is a relatively complex topic so if there's any questions or challenges to the information presented just leave a comment and we can discuss it! Do you own any synthetic ETFs?
Yes invesco S&P500 ETF :) It is better than index ;) (tracking error positive)
Hi Dan so what are the three etfs you suggesting for beginners
Great video man, thanks!
Thank you
Very informative video, thank you!
I didnt understand if as an investor in the synthetic ETF of Invesco im getting the return of the index (for ex. SP500). bc you said onlu 10% is in swap fee
Hi Dan. What synthetic S&P 500 etf world you recommend. Ticker??
Hi Jerry, I plan on doing a dedicated video talking about specific synthetic ETFs and their benefits. Stay tuned
Synthetic replication accumulation ETFs use dividends to be reinvested in the same fund. Do synthetic ETFs do the same? Will they generate dividends to be reinvested in the same fund?
I don't know, but some derivatives markets will make an estimate of cash flow over the term and discount it to present value to determine a cash price. Maybe synthetics typically are priced in a similar way.
Oh and then on compounding: when the dividends are discounted to present value, the premium payer can decide if they want to lever up to mimic the effect of compounding (eg, for $100k notional index exposure, maybe some $2000 of expected dividend yield discounts to $1960, so instead of depositing $20k, maybe I increase it to $21960 to increase my index exposure [in advance!] to include expected dividend cash flows). But I'm just reasoning through the logic here.
What if I own an Accumulating physical ETF do I or the fund gets any taxation? tks for your work!
For me, the additional dividend returns that synthetic ETFs provide doesn't massively outweigh the additional risk that is posed. Investing in the stock market, for some, can be enough of an emotional rollercoaster on it's own never mind adding fear of your chosen fund's counterparty defaulting.
Speak english?
I own MXWS and don’t feel to unsafe about it