Guide To ETF Providers

Exchange traded funds (ETFs) are uniquely structured investment products that track indexes, or baskets of assets, including stocks, bonds, currencies, real estate and commodities. Because ETFs can cover a broad range of assets, they offer investors diversity from a single investment. When you purchase ETF shares, you are buying shares of a portfolio that tracks the yield and performance of its underlying asset(s). Like stocks, ETFs can be purchased on margin and sold short, and prices fluctuate throughout each trading session as shares are bought and sold on various exchanges.

On Jan. 22, 1993 20 ago, State Street Global Advisors introduced the first ETF - the SPDR S&P 500 ETF (ARCA:SPY). SPY, which generally corresponds to the price and yield performance of the S&P 500 Index, one of the most popular indexes in the world, launched with just $6.5 million in assets. Today, it has more than $123 billion in assets under management (AUM), representing about 6.4% of ETF assets worldwide. As both the oldest and largest ETF in the world, SPY opened up a new way for investors to gain access to the markets. Since SPY's historic introduction, the ETF industry has thrived and is now a trillion-dollar a year business, with thousands of ETFs available to match a wide variety of investment styles, objectives and risk tolerances.

There are now dozens of ETF providers - the firms that originate and, in many cases, manage ETFs. The providers offer various expense ratios, fund types, use of proprietary methodologies and fund structures. Certain providers specialize in specific areas of expertise. Direxion, for example, specializes in inverse and leveraged ETFs. EG Shares, on the other hand, concentrates on emerging market indexes. Other providers offer ETFs that cover every major asset class. Here we will introduce 12 of the providers that sell today's popular ETFs.



Guide To ETF Providers: Direxion