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ETF Market Explodes

par Alain Thériault | February 16 2011 08:28PM

Exchange traded funds (ETFs) are becoming increasingly popular with investors. The assets held in ETFs on the Toronto Stock Exchange (TSX) grew by 22% between the end of December 2010 and the end of December 2009

As of December 31, 2010, the www.tmxmoney.com web site lists 172 ETFs, 52 of which were launched over the course of the year. During 2010 the trading volume in ETFs reached 10.1 billion shares, for a total value of a little more than $118 billion dollars.

The most recent player to enter the market, BMO, launched thirty ETFs on the Toronto Stock Exchange in June. Each of the BMO ETF ticker symbols begin with the letter Z. By the end of 2010, these “Z” funds had gathered assets of about $1.5 billion.

According to numbers provided by Alain Desbiens, BMO’s regional vice president for ETF sales, assets in exchange traded funds reached the $1 trillion mark at the end of 2009. As of December 31, 2010, it had reached $1 trillion in the United States alone, and $38.8 billion in Canada, which for the latter represents a $6.87 billion gain over the previous year.

The most recent player to enter the market, BMO, launched thirty ETFs on the Toronto Stock Exchange in June. Each of the BMO ETF ticker symbols begin with the letter Z. By the end of 2010, these “Z” funds had gathered assets of about $1.5 billion.

According to numbers provided by Alain Desbiens, BMO’s regional vice president for ETF sales, assets in exchange traded funds reached the $1 trillion mark at the end of 2009. As of December 31, 2010, it had reached $1 trillion in the United States alone, and $38.8 billion in Canada, which for the latter represents a $6.87 billion gain over the previous year.

The most active ETF on the TSX early this year was the Horizons BetaPro NYMEX Gas Bull Fund, shares of which changed hands more than 50 million times during the first week of 2011. The high trading volume is due to its speculative nature, and its use in short term strategies. Traded under the HNU ticker symbol, it benefits when the price of natural gas rises on the New York Stock Exchange. The second most heavily traded fund is Horizons’ BetaPro NYMEX Gas Bear Fund, which profits from falling natural gas prices.

At BlackRock, the iShares CDN S&P/TSX 60 is the leading ETF on the Toronto Stock Exchange. Traded under the XIU symbol, it has the third highest trading volume on the TSX, with more than 32 million transactions during the first week of 2011.

Other significant players include Claymore’s ETFs, all of which are listed under ticker symbols beginning with “C”, Barklays Bank iPath exchange traded notes, and Invesco’s PowerShares, which are manufactured in Atlanta.

(AT)

 

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