Deutsche Börse has started trading its first exchange-traded fund (ETF) on the Standard & Poor’s 500 US benchmark index. The so-called iShares S&P 500 ETF is managed by Barclays Global Investors (BGI).ETFs are index funds that are traded continuously like equities on stock exchanges at current market prices. They are used as a diversified investment tool for private investors and offer a variety of different portfolio strategies, including shorting and leveraging index exposure within hedge strategies.
The iShares S&P 500 is the sixth ETF on a US index listed on the Deutsche Börse. Investors already trade ETFs on the Dow Jones Industrial Average, Dow Jones US Large Cap, Dow Jones US Technology and MSCI USA Information Technology indexes.
Investors have demonstrated a strong interest in ETFs tracking the S&P 500 index in the US. The world's most heavily traded security, with a monthly exchange turnover of around $100 billion, is an ETF on the S&P 500 index.
Deutsche Börse said more than half of all ETF turnover in Europe takes place on the German exchange. It claimed its European market share has increased from 45% to 56% since the beginning of this year. Currently there are 65 ETFs and 23 actively managed funds listed on Deutsche Börse, which first started trading ETFs in 2000.
Assets under management in European listed ETFs grew by 10.9% in the first quarter of 2003, from $10.69 billion to $11.86 billion, according to Deborah Fuhr, head of ETF research at Morgan Stanley in London. By contrast, growth in ETFs listed in the much larger US market was stagnant, at $102.28. There are now 181 ETFs with 367 listings on 27 exchanges around he world. Europe has the largest number of products at 116, Fuhr said.
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