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Why ETFs Are Taking Over Global Financial Markets

Daniel GoodmanMay 10, 2013, 01:58 IST

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Exchange-Traded Funds or ETFs have become a major force in the global financial system since their introduction in 1993. Now, trading of ETFs make up about 30% of daily trading in the US on a notional basis.

The products have become so popular because of the way they enable an investor to take an interest in a large variety of companies, industries, or commodities.

We spoke with Laura Morrison, a senior vice president of Global Index and Exchange Traded Products at NYSE-Euronext, where about 93% of all ETFs are traded, to find out exactly what an ETF is and why it has gained such popularity.

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