Did Al Gore invent ETFs too?

Growth in the assets has deep thinkers making interesting comparisons

Apr 20, 2014 @ 9:45 am

Sebastian Mercado has seen a lot of crazy charts comparing the massive flow of money into exchange-traded funds with other big trends. So the Deutsche Bank U.S. ETF strategist decided to add his own chart into the mix.

Growth, growth, growth

ETF assets have more than doubled every four years since 2000. Financial markets willing, global ETF assets could reach a best-case $3.1 trillion by yearend, up from 2013's $2.2 trillion, says Mr. Mercado. The industry's growth and the trend the strategist pairs it with in the chart — ETF assets vs. worldwide internet use — show a 0.97% correlation.

As big as the internet?

Do we think ETFs are as big or important as the internet? No. But a case could be made that ETFs are doing to the investment world what digital music did to the music world. Both are disruptive technologies, for sure. As the digitization of music and iTunes challenged the business model of the record companies, ETFs are bringing change to the old guard mutual fund companies, which are all looking at charts like Mr. Mercado's and trying to figure out a way to avoid going the way of the CD and the cassette tape.

The ETF/Internet comparison reminded Bloomberg.com's Eric Roston, who manages sustainability coverage, of a chart he said "is famous, or at least famous among people like me." People who, when asked how long it would take to get to Mars using a nuclear pulse propulsion technology, start scribbling on napkins. The chart he was thinking of is attached.

And in case you're curious, the real inventor of the ETF was Nate Most. You can learn about how he came up with the idea and his life in this poignant article in ETF.com written when he passed away in 2004.

(Bloomberg News)

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

What's the top issue on advisers minds?

Laura Pierson from Carson Group discusses how the old topic of 'Human Capital' is hot again because of millennials.

Latest news & opinion

Advisor Group acquires Signator Investors and plans on folding it into Royal Alliance

Advisor Group takes 'orphan' broker-dealer off the hands of John Hancock Financial Services.

It's official: DOL fiduciary rule is dead

The 5th Circuit Court of Appeals issued a mandate Thursday making its March 15 decision to strike down the regulation effective.

Supreme Court curbs SEC administrative law judges

'Buckets of Money' adviser Raymond Lucia is entitled to a new hearing, court rules.

Opaque, outdated 401(k) plan disclosures harming investors, advisers

Morningstar report: Lack of data on fees, investments makes advice on rollovers costlier and more challenging for investors.

Mutual funds feel the pinch of platform fees

No-transaction-fee options are a big hit with investors, but funds wind up paying the costs — and passing them on.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print