ETF history

История развития ETF

We talk about the emergence and development of the market ETF.

Exchange Traded Funds, who invest in certain assets or their groups. In fact, they own the underlying assets (shares, bonds, commodity futures, foreign currency, etc.) and produce papers on them. As the value of assets changes, the price of the ETF also changes. Ideally, ETF securities accurately repeat portfolio changes..

The idea of an index fund, which is traded on the stock exchange, appeared in the late eighties. At the time, AMEX employee Nathan Most was thinking about, how to increase trading volume. The bridge understood, that index investing is gaining momentum and wanted to create a product, which would allow you to buy and sell indices as well, like promotions. But the idea was not supported by vanguard founder John Bogle. He thought, that index funds are not suitable for trading during the day, and abandoned the partnership with AMEX.

Another obstacle for the AMEX team was the American regulator SEC, which delayed the approval process of the launch of the fund for several years.

Securities and Exchange Comission — U.S. Securities and Exchange Commission. The main body for the supervision and regulation of the American securities market. Created in 1934 r. after the Great Depression.

As a result, the first exchange-traded fund of this type appeared in Canada.. IN 1990 r. TIP Fund was admitted to trading 35, which repeated the Toronto Stock Exchange Index.

The first ETF in the US was launched only after 3 of the year. State Street Global Advisors Created SPY Foundation, Tracking Index S&P 500. It is still one of the most actively traded ETFs..

In March 1996 r. i-shares will debut on the market with the launch of ETFs, oriented to international markets. Investors get access to indices 17 countries from Canada to Japan. Later 2 State Street Launches Funds, which break S&P 500 by sector.

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Vanguard did not ignore the rapid growth of the exchange-traded fund industry and began offering its ETFs in 2001 r. Its founder, John Bogle, by that time he was no longer in charge of the company. The initiative was successful and Vanguard is now among the three largest ETF providers..

Today, there are more than a hundred individual ETF issuers on the market. The total volume of exchange-traded funds exceeds $5 trillion. Then, that started as a new product, turned into an entire industry.

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