Review of The ETF Book: All You Need to Know About Exchange-Traded Funds (Hardcover)

Let me say at the outset that I am NOT a professional investor, that I HAVE invested in individual securities as well as mutual funds for forty years, that I now, as a retiree, restrict myself to annuity income and mutual fund investments (mostly passive), and that I have not yet purchased ETFs, though Ferri's book convinces me ETFs could perform a useful function in my portfolio.

If, like me, you have not yet invested in ETFs but want to know how they are constructed, how they function, and what role they might serve in your portfolio, then Rick Ferri's book is the FIRST place you should go for a comprehensive guide to understanding ETFs.

Ferri's book can be read in, or through depending on the reader's interests.By this I mean his book divides into four free-standing, but continuous, parts.The first part deals with ETF Basics--the history, mechanics, and potential benefits and drawbacks.Part Two, a real eye-opener for this reader, focuses on index construction and provides an index strategy box akin to how Morningstar analyses mutual funds.Part Three broadens the discussion to styles and choices--from broad domestic/global indexes to equivalents of slice and dice strategies.Part Four shows, in detail, how investors can incorporate ETFs into their asset allocation plan--whether they are inclined to passive, active, or a combination of portfolio strategies.

Thankfully, Rick Ferri goes to great pains to communicate clearly with his readers.To my mind, he has no axe to grind, although as a professional portfolio manager he advocates passive investing.Ferri provides many alternative portfolios (passive, active, combo) spread along a continuum of life-cycle investing.

It certainly speaks well of this fine book that it receives the ringing endorsements of the likes of Don Phillips, David Blitzer, and Anthony Rochte, Senior Managing Director of State Street Global Advisors.Robert Uphaus



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