Getting Active: The Evolution of ETFs

So maybe to start off on the basics, tell us what is an ETF for those people that don't know?

Yeah.

Sure.

Uh, well, thanks, Tina, for, for having me here.

It's really nice to be with both of you to discuss, uh, ETFs 'cause it definitely is a, a hot topic at the moment.

Uh, for those of, of the audience that don't know what an ETF is, um, an ETF is simply a vehicle that combines the diversification of a fund and the tradability of a stock.

And so what that means is that you have intraday liquidity.

So for example, you could buy an ETF in the morning after the market opens, and you can sell that same ETF, uh, in the afternoon before the market closes.

And the direct benefit of that is that you can see the price of your investment straight away.

So if you're looking through your brokerage account, for example, or you go on an exchange website or a specialized website, you see straight away how much your ETF is worth and at what, at what price you can sell it for, or if you want to add more, at what price.

And it's different from some other, uh, financial instruments, for example, where in some cases you'll only find the price at which you bought in a day or two, or you can trade only at certain, uh, selected points.

So that's a, that's a big plus of ETFs.

And another one is the, uh, I'd say, the capacity of the wrapper to evolve because as we all know, uh, initially ETFs were passively tracking equity benchmarks, so things like the S&P 500 or the Euro Stoxx 50, and then we've seen fixed income ETFs, and then we've seen commodities ETFs and what we've called thematics ETFs, where you can access a specific theme like AI or robotics, and more recently we've had crypto ETFs and also, uh, ETFs that start incorporating options, that start looking a l- a lit- a little more like structured products.

So for an investor, the ETF is a tool to build a diversified portfolio, and I think that's what really appeals to investor.

I think that point you make about the fact that it's a wrapper and it gives you access to lots of different types of financial instruments and access to, you know, whether it's fixed income or equities or some of the other things you suggested, I think does seem to make it quite versatile, particularly for f- for, for the end investor.

So maybe to start off on the basics, tell us what is an ETF for those people that don't know?

Yeah.

Sure.

Uh, well, thanks, Tina, for, for having me here.

It's really nice to be with both of you to discuss, uh, ETFs 'cause it definitely is a, a hot topic at the moment.

Uh, for those of, of the audience that don't know what an ETF is, um, an ETF is simply a vehicle that combines the diversification of a fund and the tradability of a stock.

And so what that means is that you have intraday liquidity.

So for example, you could buy an ETF in the morning after the market opens, and you can sell that same ETF, uh, in the afternoon before the market closes.

And the direct benefit of that is that you can see the price of your investment straight away.

So if you're looking through your brokerage account, for example, or you go on an exchange website or a specialized website, you see straight away how much your ETF is worth and at what, at what price you can sell it for, or if you want to add more, at what price.

And it's different from some other, uh, financial instruments, for example, where in some cases you'll only find the price at which you bought in a day or two, or you can trade only at certain, uh, selected points.

So that's a, that's a big plus of ETFs.

And another one is the, uh, I'd say, the capacity of the wrapper to evolve because as we all know, uh, initially ETFs were passively tracking equity benchmarks, so things like the S&P 500 or the Euro Stoxx 50, and then we've seen fixed income ETFs, and then we've seen commodities ETFs and what we've called thematics ETFs, where you can access a specific theme like AI or robotics, and more recently we've had crypto ETFs and also, uh, ETFs that start incorporating options, that start looking a l- a lit- a little more like structured products.

So for an investor, the ETF is a tool to build a diversified portfolio, and I think that's what really appeals to investor.

I think that point you make about the fact that it's a wrapper and it gives you access to lots of different types of financial instruments and access to, you know, whether it's fixed income or equities or some of the other things you suggested, I think does seem to make it quite versatile, particularly for f- for, for the end investor.