The benefits of trading ETFs

After significant initial interest followed by rapid progress in Europe, exchange-traded fund products are now being fine-tuned to fit the needs of a more sophisticated market.
In recent years, exchange-traded funds (ETFs) have been one of the fastest growing areas in the European asset management industry. While these products have been available in the US since 1993, their introduction in Europe only started from 2000.
Since then, assets under management in this new and innovative investment vehicle have risen to almost US$20bn. (See Chart 1.) The largest ETFs in terms of assets are those concentrated on either the DJ Euro Stoxx 50 or local indices (FTSE100, DAX, SMI and CAC40), together accounting for approximately 60 per cent of the European ETF industry.