An Introduction to ETFs

Exchange traded funds or ETFs continued their increasing popularity in 2009 relative to other investment vehicles such as unit trusts or investment trusts. According to Barclays Global Investor s (BGI), at the end of October 2008 European ETF assets (the assets of European-domiciled ETFs) totalled $126bn, invested across a total of approximately 590 different funds. In North America, where ETFs are more established than in Europe, overall ETFs enjoyed net inflows in September, October and November 2008 despite plummeting equities and turmoil in the markets. In the EU the range of different types of ETF available has now reached the point where investors can consider putting together a por tfolio of investments built entirely of ETFs. Slightly over 200 new European ETFs were launched in the course of 2008, so, as they come of age, now is an excellent time to examine these funds in more detail.