Sesame Warns of Risk In Synthetic ETFs

Sesame Bankhall Grouphas cautioned its members against synthetic ETFs,FundWebreports. The largest single distributor of financial services in the U.K. has also asked members to recommend ETFs only from its panel of approved funds.

The move follows theBank of England’s financial stability report published in June, which said synthetic ETFs might not be fully understood by investors attracted by the lower costs. In January, the network released a list of 19 ETFs that have been approved for Sesame members and does not include any synthetic or swap-based ETFs.

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