Exchange-traded funds – baskets of securities that are designed to track indices and trade like stocks – were the investment phenomenon of 2005. A total of 45 new ETFs were launched last year – a 30 per cent increase from 2004, according to Investment Company Institute, the industry body, and assets within ETFs topped nearly $302bn in 2005, according to Morgan Stanley.

Perhaps more surprisingly, ETFs seem to have gained most demand from high net-worth individuals, according to David Hayward, director of alternative investment research at Financial Research Corporation, the Boston-based data company. “People want simplicity,” he says. “People want customisation. People want more control over their portfolios. ETFs provide these things.”