A few quick facts on the ETF industry:

  • The first ETF ever launched was the SPDR S&P 500 ETF (SPY) which is designed to track the S&P 500 index.
  • Today, the SPY is the largest ETF with nearly $70 Billion in assets.
  • Assets in ETFs are now at a new record of $678 Billion at the end of August.
  • This year, through August ETF assets have risen 25%.
  • There are a total of 846 ETFs from 36 providers.

I like ETFs for the following reasons:

  1. ETFs enable intelligent investing for anyone. Investors can now gain access to many types of investments that previously only the very wealthy could access.
  2. ETFs are cost efficient. You can buy and sell ETFs with very reasonable trading costs.
  3. ETFs offer access to unique markets and asset classes. There is an ETF for nearly any stock or bond market index, sector, country, currency, or commodity.
  4. ETFs are liquid. ETFs trade like a stock. You can buy or sell them very quickly.

For these reasons (and more) I expect ETFs to become even more popular. The industry will continue to see extraordinary growth. If you aren’t aware of the different types of ETFs and the benefits they offer you should take the time to learn more. They are simply great investment vehicles.


Source: Investors Are Sweet On ETF Products [The Wall Street Journal]