One of my main tasks as editor of ‘Thinking Ahead’ is to reflect on past market development. The other and more challenging one is to turn my eye to the future, and try to cast a guiding light on such disparate financial elements as regulation, investment strategies, investor appetite, cryptocurrency evolution or even artificial intelligence.
This month is no exception. We look back at the remarkable advancement of ETFs, and forward at where this most flexible of investment vehicles might be heading. It’s been a remarkable ride. While the concept of pooled investing is nothing new, ETFs certainly are – they were first traded in the US in 1993, but were somewhat of a niche product until around 2010, and have only been traded in Europe at all for about 20 years. How things have changed! The ‘Wall Street Journal’ recently estimated that ETFs now encompass more than USD 3.4 trillion of assets, quite an impressive growth spurt.
Reading through this month’s articles, though, it’s clear that the market has a lot further to go, with the growth potential especially solid in emerging markets, particularly Asia. And it seems that hardly a day can go by without a new ETF being launched, with the range of underlying assets growing ever broader and giving investors greater opportunity to create diverse portfolios. As a leading market maker in the ETF universe, here at Commerzbank we will be watching closely.
I hope you enjoy this month’s dive into the widening world of ETFs.
Unfortunately, I am sad to say that this will be the last edition from Commerzbank but we thank you for your continued support over the last 10 years.