The first ETF is 30 years old this week. It launched a revolution in low-cost investing

The first ETF is 30 years old this week. It launched a revolution in low-cost investing

(An excerpt from the guide, “Shut Up and Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange,” by Bob Pisani.)

Thirty years in the past this week, State Street Global Advisors launched the Standard & Poor’s Depositary Receipt (SPY), the first U.S.-based Exchange Traded Fund (ETF), which tracked the S&P 500. 

Today, it is generally known as the SPDR S&P 500 ETF Trust, or simply “SPDR” (pronounced “Spider”).  It is the most important ETF in the world with over $370 billion in property underneath administration, and is additionally probably the most actively traded,  routinely buying and selling over 80 million shares every day with a greenback quantity north of $32 billion daily. 

How ETFs differ from mutual funds

 Holding an funding in an ETF construction has many benefits over a mutual fund.

 An ETF:

  • Can be traded intraday, similar to a inventory.
  • Has no minimal buy requirement.
  • Has annual charges which can be decrease than most comparable mutual funds.
  • Are extra tax environment friendly than a mutual fund.

Not a nice begin

The proper product on the proper time

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