ETFs Mark 20th Anniversary: A Look at the Market’s Hottest New Product
On a cold January day 20 years ago, with the Dow Jones Industrial Average hovering at about 3,300, a team of investors from State Street Bank (STT) unveiled their new creation to the denizens of Wall Street: the SPDR S&P 500 ETF (SPY). They now describe the launch of the first exchange-traded fund (ETF) on this day in 1993 as "the one that started it all," calling the debut of the Spider (short for S&P Depositary Receipt) "an investment product that gave people a more precise way to buy and sell an entire index, but could be traded like a stock." It took some time for ETFs to catch on, but when they did the once lonesome Spider paved the way for what is now a $1.4 trillion industry with more than 1,400 different funds.Comment: More on SPY here, here, and here. My first three ETF's: SPY, DIA, and QQQ.