The latest review of the UK Exchange Traded Fund (ETF) landscape from BlackRock shows their use is becoming even more popular.
During 2010, the value of ETFs and Exchange Traded Products (ETPs) with their primary listing in the UK increased by 49% to US$93.4bn.
The FTSE 100 index of UK company shares grew by 5.2% in US dollar terms over the same period of time.
A total of 520 individual ETFs and ETPs were listed in the UK at the end of 2010, compared to 293 at the end of 2009. This is growth of 77.5% in the number of these funds with their primary listing in the UK.
We favour the use of ETFs in some markets where replication of an index at a low cost is beneficial within an investment portfolio.
Investors using ETFs for the first time need to consider a number of important factors very carefully.
Before recommending an ETF, we look in detail at factors including the replication method (physical or synthetic), tax reporting status and stock lending policy.
The first ETF in the United Kingdom was listed on the London Stock Exchange’s Main Market in April 2000, so they remain a relatively new investment vehicle for most UK investors.
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