He pointed out that Apple (NasdaqGS: AAPL) shares are widely held in indexes, but the stock’s performance has varied greatly from the overall market.
In response to claims that ETFs disrupt small business capital formation, he said he’s never heard of a company not going public because it didn’t want to be included in a small-cap index.
Also, he said there is no evidence that ETFs add to market volatility in general or at the end of the trading day.
“In fact, ETPs provide investors with very valuable diversification, hedging and risk management opportunities. For those reason ETPs have grown rapidly in popularity over recent years and it is not uncommon for trading in ETPs to increase on volatile days,” Noll said.