Editorial: ETFs are not derivatives

The fat-finger inspired sell-off in equity markets in the first week of May, something that especially affected the US equity markets, saw a big movement away from ETFs, resulting in alarming statements suggesting ETFs are the new derivatives.

Initially the darling of retail, and now the plaything of institutional investors in the US, ETFs were loved for their simplicity and transparency. When the credit crisis hit and major banks were finally permitted to go bankrupt, ETFs held their own. The