Over the last year 252 new exchange traded funds (ETFs) have been launched globally. ETF assets have increased by 46% worldwide and there are at least 665 equity, bond, commodity and currency ETFs with total assets at $525 billion. Richard Kang of Seeking Alpha reports there is a similar pattern of growth in hedge funds, which are at the opposite end of the investment spectrum.
Hedge funds use leverage/gearing or debt to invest so the positions they take in financial markets are larger than their assets under management. There are about 9000 hedge funds with assets at $1.225 trillion, up 19% in the past year. Hedge funds are diverse and some are meant to provide low volatility, but it’s crucial to know what you’re buying first.
Although growth is similar, ETF growth should probably continue as popularity in hedge funds wane with overall market volatility.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.