August 24, 2006 at 1:23 am by Tom Lydon
Money continues to flow into exchange traded funds and a report from Morgan Stanley predicts the amount of money invested in ETFs will top $2 trillion in 2010, up from $487.1 billion in June 2006.
What’s behind the growth?
- Institutional investors have embraced the idea of using ETFs;
- ETFs trade continuously through the day;
- The European Union changed an investing rule allowing funds to invest up to 100% of assets in ETFs;
- New indexes means new ETFs to track them.
As of June 2006 there were 596 ETFs listed on 36 exchanges around the world. The U.S. has the most with 275 ETFs and $344.4 billion assets. Europe has 216 worth $71.3 billion and Japan has 13 ETFs at $39.5 billion. Worldwide, ETF assets rose 16.7% in the first half of 2006.
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