Stock splits are not uncommon. In fact, some of the sexiest names on Wall Street, including Apple (NasdaqGS: AAPL) and most recently, Netflix (NasdaqGS: NFLX), have split their shares. Finding traditional forward splits in the exchange traded funds space, well, that is another matter.
Some market observers argue that ETF issuers might want consider more forward split as a means of boosting interest and volume among retail investors, reports Chris Dieterich for Barron’s.
“ETF sponsors should likely do the same analysis that many large corporations regularly consider: ‘Should we split our stock?’ Conversely, those considering adding new products to compete against existing funds should think about offering a more ‘Affordable’ alternative if the competition’s price is +$100,” said Nicholas Colas, chief market strategist at brokerage ConvergEx, in a note posted by Barron’s.
There might be something to that argument. There are approximately 1,700 exchange traded products listed on U.S. exchanges and nearly 150 carry triple-digit price tags, according to Finviz data. Interestingly, the bulk of the highest-priced ETFs are issued by the three largest issuers: BlackRock’s (NYSE: BLK) iShares, Vanguard and State Street’s (NYSE: STT) State Street Global Advisors.