Age of the ETF

Stock markets have a new purpose. Once devoted to trading stocks and setting their prices, they are now the venue for buying and selling something other than shares: exchange traded funds.

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Exchange traded funds are taking over markets. Shares in Apple, the world’s biggest and most heavily traded company, turn over more than $3bn each day. But that is dwarfed by the biggest ETF, State Street’s SPDR S&P 500, which trades more than $14bn each day. Five of the world’s seven most heavily traded equity securities are ETFs.

It is not just in trading that ETFs dominate. Their assets under management were negligible 20 years ago, but now exceed $3tn.

This series examines the global rise of ETFs.

Copyright The Financial Times Limited 2018. All rights reserved.
Copyright The Financial Times Limited 2018. All rights reserved.