ETF Report: Canadians Seek Overweighting Solutions
ETF Report Cover Story
Canada can lay claim not only to creating the world’s first exchange-traded fund and its first fixed income ETF (see ETFR, January 2001), but also to having what is currently the cheapest ETF in the world (Dow Jones Canada 40). Quite a track record for a country with a small market and a small—but growing—cadre of ETFs.
Though they are often set aside or excluded in discussions about exchange-traded funds, the assets under management for Merrill Lynch’s Holding Company Depositary Receipts, or HOLDRs, have been growing steadily right alongside standard ETFs.
ETF Report Features
The McGraw-Hill Companies and the Vanguard Group are both seeking a summary judgment in a lawsuit that revolves around Vanguard’s right, or lack thereof, to launch its VIPERS exchange-traded funds products without seeking a new licensing agreement from McGraw-Hill’s Standard & Poor’s division to use its well-known indices to replicate the price and yield performance of the stocks underlying them.
When the Spider was launched, its success and appeal derived in part from its ability to be arbitraged. The arbitrage mechanism, attending ETFs in general, was designed into that original product in 1993, and attracted the attention of the Securities and Exchange Commission.
Institutional investor interest in exchange-traded funds generally goes beyond that of the average retail investor.
The Hong Kong Tracker Fund [TraHK] is Asia’s first exchange-traded fund, and the largest one outside of the US.
With the growing popularity of global sector funds and the partnership agreements being formed between US and European exchanges, the stage is set for an explosion of exchange-traded funds in Europe.
It’s true that almost every mutual fund company offers some sort of index fund based on the S&P 500 benchmark, often attracting a fair share of the pie for index products. But the mutual fund industry is a multitrillion-dollar industry with plenty of room for products that appear to be very similar.