The Nasdaq OMX Group (NasdaqGS: NDAQ) plans to expand its exchange trading fund indexing operations, targeting foreign exchanges and highlighting additional areas of growth.
John Jacobs, executive vice-president at Nasdaq, said that fund providers are working on Nasdaq index-based ETFs for Asia and Latin America exchanges this year, reports Chris Flood for Financial Times.
Jacobs stated that Nasdaq intends to challenge rivals like S&P Dow Jones Indices, MSCI and FTSE Group that have capitalized on the quick growth in ETFs. The greater competition could help drive down fees for indexing, which could trickle down to lower investor expenses.
“The indexing market needs to be disrupted,” Jacobs said in the FT article, adding that Nasdaq’s indexing fees were “only a fraction” of those charged by competitors.
Nasdaq’s renewed interest in the ETF space comes after the PowerShares QQQ (NasdaqGM: QQQ), which has $45.5 billion in assets under management, celebrated its 15-year anniversary on March 10. ETFs that track the Nasdaq-100 index are now listed in China, India, Japan, Korea, Singapore and Israel exchanges.
“It was the QQQ that really put ETFs on the map for retail investors,” Jacobs added.
Jacobs also points out that there is further room for index-based ETF to grow. For instance, retirement savings plans have not widely adopted passive ETFs. Additionally, ETFs are still making inroads into foreign bourses.
The industry is still crafting innovative ideas. For example, recent ETF launches track factor-based Nasdaq indices, including the First Trust NASDAQ Rising Dividend Achievers ETF (NasdaqGM: RDVY), which was launched in January, and PowerShares International BuyBack Achievers Portfolio (NasdaqGM: IPKW), which began trading at the end of February. [Buybacks Slowing, Buyback ETF not so Much]
For more information on ETF indices, visit our indexing category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of QQQ.