Smart-Beta ETF Channel

At first glance, first quarter performance data for exchange-traded funds
look great, considering that blue chip stocks traded near bear market territory
and technology stocks set records for losses

"There’s a symbiotic relationship between ETFs and futures"

When the Spider was launched, its success and appeal derived in part from its ability to be arbitraged. The arbitrage mechanism, attending ETFs in general, was designed into that original product in 1993, and attracted the attention of the Securities and Exchange Commission.

New Sector Indexes Offer Some Advantages

Our monthly databank breaks down ETF returns for every market segment.

Bloomberg LP has raised a large family of indexes for years, including U.S. state and regional stock indexes and its Bloomberg European 500 Index. However, it hadn’t moved to capitalize on the index-investing trend of the 1990s as many other index providers, including Dow Jones, Morgan Stanley Capital International and Standard & Poor’s, have done.

It’s true that almost every mutual fund company offers some sort of index fund based on the S&P 500 benchmark, often attracting a fair share of the pie for index products. But the mutual fund industry is a multitrillion-dollar industry with plenty of room for products that appear to be very similar.

Though they are often set aside or excluded in discussions about exchange-traded funds, the assets under management for Merrill Lynch’s Holding Company Depositary Receipts, or HOLDRs, have been growing steadily right alongside standard ETFs.