Gregg Greenberg of TheStreet.com talked to of David Blitzer of Standard & Poor’s about indices and exchange traded funds. ETFs track indices and as we see more and more ETFs available, it begs the question, are there any more indices out there to follow?
Blitzer touches on this topic and says there are more indices out there and that their creation takes some "creativity and understanding of the markets." He also touches on the differences between benchmark, tradeable and intelligent indices.
When asked about expense ratios, Blitzer explains that costs are different from market to market and stock to stock. For example, trading in an emerging market costs more, as does trading in an illiquid stock. These fees are determined in a competitive market, and competition is growing among index providers.
Blitzer says ETFs have changed index investing. It is now more accessible to the individual investor, there is fee pressure on mutual funds and it is easier to invest in precious metals, such as gold.
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