Blackrock, Bloomberg, SSgA

Exchange Traded Funds (ETFs) are an investment vehicle that has gained in popularity dramatically over the past ten years. The first ETF was launched by State Street Global Advisors in 1993 with the introduction of ETF based on the Standard & Poors' 500 Index. In the end of 1990 the number of the ETFs was still small: there were only 33 funds and their total assets amounted to $40 billion only. The majority of the ETFs were traded on the American stock market, and the first European exchange-traded fund was established only in 2000. Since the beginning of the new century the ETFs industry started to boom and gather assets at a rapid pace. Within the next 10 years the number of funds grew 74 times, and their assets - 33 times.

Due to the number of benefits compared to traditional investment funds the ETFs are growing ever more popular with institutional and individual investors. It is estimated that ETFs accounted about one third of all US stock trading volume.

Today the ETFs are not limited with holding only stocks and indices.

They have proliferated, tailored to an increasingly specific array of regions, sector and asset classes – commodities, bonds, futures, currency, real estate. There are mixed funds, funds with specific management style (e.g. defensive, or growth funds), leveraged ETFs, inverse ETFs, etc.