It is ten years to the day since the first exchange-traded fund, XACT OMXS30TM, was listed on the Stockholm stock exchange. Since then, the turnover in exchange-traded funds (ETFs) has increased a hundredfold. ETFs have gone from being a cost-effective tool for a few professional investors to good value-for-money favourites for a growing number of private investors.
"I think we're just at the beginning. With a growing supply of ETFs with differing investment profiles, creating greater opportunities, I believe that more and more investors will choose ETFs as part of their investment strategy." So said Henrik Norén, managing director of XACT Fonder AB when the company's first ETF, XACT OMXS30TM, celebrated 10 years on NASDAQ OMX Stockholm (the Stockholm stock exchange).
"The growing interest in ETFs is reflected, among other things, in the inflow we have seen to XACT OMXS30TM over the past three years," continues Henrik Norén. "Assets under management have increased by just over 100 percent, despite a slight downturn in stock market performance."
Since the launch, trading in ETFs has rocketed, from a turnover of just under SEK 1.8 billion in 2001 to just over SEK 210 billion last year.
"An exchange-traded fund is a simple, cheap way of tracking the performance of a given market, such as the stock market, which has helped ETFs to become more popular with small private savers, too," says Jenny Rosberg, SVP of NASDAQ OMX Nordic.
Since the launch, the Swedish stock market and XACT OMXS30TM, which tracks the performance of the 30 most traded shares on NASDAQ OMX Stockholm, have had a dramatic journey. It began during the long market downturn in the wake of the IT bubble and has included terrorist attacks and the financial crisis of 2008 - a bumpy ride, but after ten years, the fund is up by 25 percent. The change in the index is a historical reflection of the performance of the 30 largest Swedish companies during that period. At the fund's launch in October 2000, the Ericsson share had the largest weight in the index, with almost one-third, followed by AstraZeneca and Nordea. Today, H&M is the largest, followed by Nordea and TeliaSonera.
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