INSIDE COMPLIANCE

While Exchange-Traded Funds (ETFs) were introduced in the early 1990’s, the investment product skyrocketed in popularity throughout the 2000’s. In fact, only one ETF existed in 1993 before the market subsequently expanded to 102 funds in 2002, and then to 1,000 funds by 2009. There currently exists more than 7,602 ETFs globally, and their popularity among investors has prompted the creation of numerous other Exchange-Traded Products (ETPs). While ETFs are the most prominent form of ETPs, fund issuers have introduced a myriad of products that vary in terms of volatility, complexity, and investor suitability. Hence, regulators and financial professionals have continued to warn the investing public of the risks involved with purchasing complex ETPs, such as single-stock ETFs, without sufficiently understanding how the products operate.