ETFs: investors’ flexible friends

Exchange-traded funds have proliferated in Europe, offering institutional investors enormous investment choice and liquidity at a low cost. We find out how and why these products are attracting the interest of a diverse range of investors and look at the future potential of the industry. Dawn Cowie reports

ETF's flexibility is part of their attraction for investors

Ten years after the introduction of exchange-traded funds (ETFs) in Europe and few would have predicted that 85–90% of the users of these passively managed, index-tracking funds would be institutional, not retail investors. Or, even more surprisingly, that hedge funds would have been the fastest-growing group of global users over this period. The compound annual growth rate for this group of active investors was 42.4% over the 11 years to the end of 2008, according to a recent research report by

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