Exchange traded funds (ETFs) are much in the news these days. And now there is a report out of State Street Global Advisors (SSGA) that highlights just how ubiquitous the growth of ETFs has become.
The $300 billion Chinese sovereign wealth fund, the China Investment Corporation (CIC), reported in March that it held $9.6 billion in US-listed securities. Of that $2.4 billion or 25% was invested in ETFs, largely in gold, commodity and energy-related ETFs.
The SSGA report found that institutional investors are some of the largest investors in ETFs. In fact, there are 887 institutions that hold the iShares MSCI EAFE ETF.
“The straightforward construction of ETFs, lack of counterparty risk and daily postings of holdings of all holdings removes the uncertainty that accompanies some other methods of gaining beta exposure,” says the SSGA report.