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Tuesday, February 9, 2010
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ETF Evolutions Conference Report
Fundamentally weighted ETFs fuel growth
Exchange traded funds that are not weighted by market capitalization, commonly referred to as fundamentally weighted ETFs, accounted for 156, or 45%, of the 347 ETFs issued over the past five years, Cliff Weber, senior vice president, ETF Marketplace for the American Stock Exchange said during the ETF Evolutions Conference in New York.
But those ETFs only accounted for 15% of asset flows during that that period, Mr. Weber said. The numbers highlight a challenge for ETFs, some of which he predicted will eventually disappear. ETFs based on fundamental indexes were a hot topic at the conference. "I think we are going to see a lot more of non-market cap weighted ETFs," said David Blitzer, managing director and chairman of the index committee at New York-based Standard & Poor's. "But at the end of the day cap-weighted will still be dominant."
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