What do you give an exchange-traded fund investor who has every exposure they could possibly dream of? An ETF that tracks ... the ETF industry itself!
The ETF Industry Exposure & Financial Services ETF, known as TETF, began trading April 20. The first of its kind, according to sources, it exposes investors to the companies driving and participating in the growth of the ETF industry and its $2.7 trillion in assets under management.
TETF tracks the Toroso ETF Industry index, created by Toroso Investments LLC. The firm is the sponsor of TETF. The index, which trades on the New York Stock Exchange, includes ETF sponsors, index and data firms, trading and custody providers, liquidity providers, and exchanges. It includes firms such as BlackRock (BLK) Inc. (BLK), State Street Corp. (STT) and Nasdaq.
The index has four tiers, covering companies with different levels of participation in the industry, with participants equally weighted within their tiers and subject to a 9% maximum weight for any one security.
The index and ETF were launched “to democratize the access to one of the fastest-growing sectors of the financial services universe. We thought there was a huge need for a tool to finally allow investors and advisers to invest in the continued growth of the ETF industry,” said Toroso Chief Investment Officer Mike Venuto. “Up until now, investors have had limited access to invest in this high-growth industry in a holistic manner.”
This article originally appeared in the May 1, 2017 print issue as, "New index charts growth of thriving financial sector".