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The first ETF, enabling investors to buy the S&P 500 index in a single publicly traded share, was launched over 25 years ago. The innovation has completely changed the wealth management industry, lowering fees and enabling a movement towards "passive" investing.
Originally conceived as a trading tool for sophisticated institutional investors, ETFs have evolved into a democratizing force, lowering costs and giving retail investors access to trading strategies once available only to professionals. The fast-growing market has also been blamed for inflating asset prices and exacerbating price swings in markets ranging from gold mining stocks to oil futures. ETFs notoriously contributed to haywire trading on Aug. 24, 2015, when mismatches between ETF prices and their underlying stocks snarled markets for hours.
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