Exchange-Traded Funds For Dummies®, 2nd Edition

Chapter 1

The (Sort of Still) New Kid on the Block

In This Chapter

Discovering the origins of ETFs

Understanding their role in the world of investing today

Getting a handle on how they are administered

Finding out how they are bought and sold

Tallying their phenomenal growth

There are, no doubt, a good number of pinstriped ladies and gentlemen in and around Wall Street who froth heavily at the mouth when they hear the words exchange-traded fund. In a world of very pricey investment products and very well paid investment-product salespeople, ETFs are the ultimate killjoys.

Since their arrival on the investment scene in the early 1990s, more than 1,300 ETFs have been created, and ETF assets have grown faster than those of any other investment product. That’s a good thing. ETFs enable the average investor to avoid shelling out fat commissions or paying layers of ongoing, unnecessary fees. And they’ve saved investors oodles and oodles in taxes.

Hallelujah.

In the Beginning

When I was ...