Exchange-traded products have grown this year to overshadow the size of the more established hedge fund industry
In early November, assets invested in
exchange traded funds (ETFs) and exchange traded products
listed around the world hit $3.4 trillion, making the industry
larger than the hedge fund industry, with just under $3
trillion under management.
The exchange traded funds industry has
been expanding rapidly over the past few years and has soared
especially in the wake of the EU referendum. According to
recent research, ETFs, together with options on broad-market
indices and energy-related stocks, flourished in early
2016 amid market turmoil and sliding oil prices. The
products were also mentioned as one of the growth areas for the
merger between Bats and the CBOE.
ETFs vs Futures
Market participants are quick to point to
the products’ ease of use and the fact that they
can be traded on different benchmarks and asset classes in
smaller sizes as the reasons for their success. Another
factor behind the success of ETFs as a product, are their
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