Exchange-traded-funds are growing at exponential speed, and investment bank growth in ETFs will be driven by a variety of factors, according to Investor's Business Daily.
For one, many institutional investors think that ETFs are products that can help them gain exposure to different equity sectors, styles and geographic regions. Another attractive feature is that ETFs trade at real-time prices during the day.
Financial firms continue to roll out new indexes, which will eventually result in more ETFs that track them, a report from Morgan Stanley states. The new indexes use different weighting formulas employing various market capitalization, price, dividend and other factors. Additionally, many financial exchanges in both developed and emerging markets are either planning an ETF trading segment or thinking about the idea, the report states.
This year, worldwide trading volume of ETFs was up 108.7% through late June to $34.3 billion from $16.4 billion at the end of 2005.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.