Exchange Traded Funds ( ETFs ) have an interesting history here in the US and around the world. Basis in 1989 as Catalogue Participation Shares, a proxy of the S&P 500, they were traded on the American Stock Exchange and the Philadelphia Stock Exchange. Consequent inception, the Chicago Mercantile Exchange filed a successful lawsuit stopping all sales in the US.
A resembling product called the Toronto List Wisdom Share begun trading on the Toronto Stock Exchange in 1990. Rising in popularity very quickly, the shares tracked the TSE 35 then later the TSE 100. With that success, the American Stock Exchange created an SEC - friendly product for the United States.
In January of 1993 Nathan Most, an executive with the exchange, created Standard & Poor ' s Depositary Receipts. Widely know as SPDRs or " Spiders, " the fund became the largest in the world. MidCap SPDRS were introduced to the market shortly after in May of 1995.
Barclays Global Investors, a subsidiary of Barclays pls entered the mix in 1996 with World Equity Benchmark Shares, or WEBS which shortly after was renamed iShares MSCI Index Fund Shares. This fund was very innovative due to its ease of use for the every - day investor to invest in the foreign market. SPDRs were set up as unit investment trusts while WEBS, being a first of their kind were set up as mutual funds.
In 1998 State Street Global advisors introduced " Sector Spiders " to the market. " Sector Spiders " were created to follow the nine sectors of the S&P 500. Introduced in 1998, " Dow Diamonds " tracked the Dow Jones Industrial Average.
Since then ETFs have multiplied and reached a variety of sectors, commodities, regions, bonds, futures and several other asset groups. Over 680 ETFs existed by May of 2008 in the U. S. Assets of these 680 ETFs were at $610 billion and had a $125 billion increase above the previous 12 months.
