NYSE Poised for New ETF Development

June 03, 2004

A new player in ETF trading, the NYSE has entered with a bang. John Spence talks to Bob McSweeney, head of ETF development at the exchange.

A relative latecomer to ETFs, the New York Stock Exchange has been enjoying a round of recent successful ETF launches.  The NYSE is also eyeing the imminent release of long-awaited Morningstar ETFs tied to stock benchmarks from the Chicago research house, to be managed by Barclays Global Investors.

"The NYSE is enthusiastic about a number of new ETF listings on the horizon," said Bob McSweeney, head of ETF development at the Exchange.  "On June 11 the first Morningstar ETFs will hit the market."

More new products are also on the way.

"The FTSE/Xinhua [China] ETF will launch later this summer, and we're hopeful the Gold Council's ETF will receive regulatory approval to begin trading," said McSweeney.  "There are a also variety of new indexes under development by providers."

As ETF visibility and assets continue to grow, competition has also increased between specialists for new listings.

"We've had interest from new specialists to enter the ETF space," said McSweeney. 

In the past year, the NYSE has wrapped up some of the most lucrative new ETF listings - in particular the iShares Dividend Select (ticker: DVY) and the iShares TIPS fund (ticker: TIP), both managed by Barclays Global Investors.

"DVY has $2 billion in assets already, which has increased from an initial $28 million [launched in November 2003], with average daily volume of about 400,000 shares," said McSweeney. 

"TIP has grown from $31 million [launched in December 2003] to close to $1 billion, with over 120,000 shares in average daily volume."

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