“Index investing. Financial instruments of the ETN and ETC type [Review]

It is the same on every market - those who are the first to notice and understand its potential, and who are able to use it, earn the most. ETN and ETC are practically unknown in Poland and are just in their infancy in our country. Is this a good time to invest in them? It is definitely worth reading Tomasz Miziołek's book, from which you will learn literally everything about this subject.

A conscious investor knows perfectly well what they are ETFs. He realizes that he can invest in a broad index of almost any stock exchange, as well as in ETFs that focus on a specific industry. He does not have to select companies himself, weigh the portfolio and calculate whether he should rebalance, because company X increased in price by 50% in a week, and company Y decreased by 30%. All this is done for him by the fund managers, or rather by machines whose activities are only supervised by the managers. This allows for a practically passive investment, which can now be secured even in the form of a standing transfer order on a specific day of each month.

The book is good, but difficult

But ETF's younger brothers have already appeared on the financial market - ETN and ETC instruments. This is what Tomasz Miziołek writes about and, to his credit, he has enormous knowledge on this subject.

On the one hand, there is no need to read anything more, because we will not learn anything new on this topic anywhere. But on the other hand, those less familiar with the topic of investing in this type of financial instruments may be overwhelmed by the form of the book, such as the number and length of some footnotes, which makes it more difficult to read. Of course, you can understand the author who wanted to exhaust the topic, but in the new edition, many of them can be easily included in the content of the chapters, and some can simply be omitted.

ETN is not an ETF

Despite this, the book is quite a wealth of knowledge for all those who want to be the first to enter the ETN and ETC market. Somewhat similar to an ETF, but offering greater earning potential with greater risk.

ETN and ETC instruments do not have to meet investment limits. It is the banks or financial institutions that issue them that decide how to build the investment basket and may even choose only one asset, e.g. cryptocurrency or a company they buy using financial leverage. So you can earn much more on them than on ETFs, but the risk is also higher.

Tomasz Miziołek not only describes the technical differences between these instruments, but also presents them from a practical perspective. It carefully analyzes ETN and ETC instruments that are already listed on the Warsaw Stock Exchange, thanks to which we can see for ourselves two things: how fast this market is growing, but also how much potential there is still ahead of it.

However, before we start investing in ETN and ETC for good, it is certainly worth reading how to do it and learning from the mistakes of others. Book "Index investing" will be the best university for this.

About the author

Tomasz Miziołek is a professor at the University of Lodz in the Department of Finance and International Investments. During his 25-year career, he conducted training and seminars on the functioning of investment funds and ETF funds in Poland and around the world. He is the founder and editor-in-chief of etf.com.pl, which has been reliably describing the secrets of index investing since 2009. He sits on the supervisory board of Beta Securities Poland SA, the Supervisory Committee of Capital Market Reference Indicators at GPW Benchmark SA

He conducts research on the functioning of collective investment institutions on the domestic and international financial markets, in particular investment funds and ETF funds, as well as index investing.

He is the author and co-author of the books: "Passive investment portfolio management - index investment funds and ETF funds", "The investment fund market in Poland" and "International Equity Exchange-Traded Funds".

Where to buy

The book is available in Maklerska.pl bookstore at the price of 99 PLN.

We have a discount of all for our club members -5% to buy this book. Soon, a review of the book and a competition will appear in our website, in which you'll be able to win two copies.