January 22, 2008 at 12:00 pm by Tom Lydon
Exchange traded funds (ETFs) are closing in on closed-end funds’ (CEFs) territory.
The size of the ETF industry has or will soon surpass the CEF market share. Richard Widows for TheStreet reports that in December, there were 646 ETFs to track, only 14 shy of CEF’s total of 660. On average, 20 ETFs debuted per month, versus 4 CEFs per month, and so it goes.
Given the fact that CEFs have been around since 1927, while the first ETF launched in February 1993, this is milestone growth. The reasons ETFs have gained on CEFs are many: tax advantages, lower expense ratios, close proximity to net asset value (NAV) and the ability to create and redeem new shares.
Market value for ETFs is at $540 billion and for CEFs, $318 billion.
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