“With central bank intervention in Europe and the States, in the last couple of years individual stocks are increasingly moving in line with each other so beta heavy strategies, which rely more on underlying market movements, have been popular,” Simon Colvin, vice-president at Markit, said in the FT article.
For instance, the largest ETF, the SPDR S&P 500 ETF (NYSEArca: SPY), which passively tracks the S&P 500 index, has grown into a $179.3 billion behemoth, with an average daily volume of 111.2 million shares.
Additionally, with innovative strategies and products still hitting the markets, ETFs could continue to expand. For instance, the relatively new currency-hedged equity funds had a record month in March, gathering $13.4 billion in inflows as investors focused on overseas growth while mitigating the negative effects of a stronger dollar.
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.