News & Commentary

Global popularity of ETFs 14 May 10


This is a time of key anniversaries for Exchange Traded Funds (ETFs).

Twenty years ago, the world’s first popular ETF was listed on the Toronto Stock Exchange. And 10 years ago, Europe’s first ETFs were listed on the Deutsche Boerse.

Fast forward to May 2010. ETFs are truly entrenched and their popularity is rapidly growing among global investors.

Investment journalist Sam Mamudi writing this month in MarketWatch – the online financial website published by Dow Jones Consumer Media – describes competition from ETFs and traditional index funds as the “biggest hurdles” facing unlisted managed funds.

Mamudi, who closely follows ETFs, specifically points to the lower cost and tax efficiency of ETFs and index funds.

The global market capitalisation of ETFs and the number of ETF products available strongly support Mamudi’s assessment.

ETF Landscape, published by the UK-based ETF research team with the BlackRock financial group, reports that the total market capitalisation of ETFs listed on world stockmarkets reached $US1.08 trillion by March 31. There are an astonishing 2,131 ETF products listed on 42 exchanges.

Here is world rundown of ETFs as at the end of March: United States, 814 ETF products, 29 providers, $US736 billion in assets; Europe, 910 ETF products, 36 providers, $US234 billion in assets; Canada, 132 ETF products, four providers, $33 billion in assets; Asia Pacific (ex-Japan), 159 ETF products, 53 providers, $US41 billion in assets; Japan, 70 ETF products, six providers, $US27 billion in assets; and Latin America, 21 ETF products,  three providers, $US9 billion in assets.

Next week, Smart Investing will give a monthly update of the ETF market in Australia. After a relatively slow start, ETFs in this country have begun to really catch the attention of investors.

 

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