NYSE Looks to Challenge American Exchange ETF Hegemony


There are currently 58 exchange-traded funds available to investors. Their combined assets amount to some $47 billion. Every one of them trades on the American Stock Exchange (AMEX). This may soon change. The New York Stock Exchange (NYSE) today expressed interest in developing a line of ETFs that could hit the market as early as this fall.

ETFs have recently steamrolled their way through the index investing world, revolutionizing the way investors view index funds. Because they can be bought on margin and sold short like stocks, a large group of short-term and hedge investors have entered the indexing market, heretofore the domain of the passive long-term investor.

While initially, the diminuitively named Cubes, SPDRs and Diamonds were the primary options, Barclays Global has led the push to launch iShares for most major market sectors and international markets. By early August there will be over 50 iShares on the market. Indexing giant Vanguard also plans to enter the fray with its Vipers. All of these ETFs, and the new Fortune ETFs are or will be listed on AMEX.

NYSE Chairman and CEO Richard A. Grasso told the Wall Street Journal that ETFs "are a very big opportunity and we're going to be a factor in it." The New York Stock Exchange said it plans to develope an index based on the performance of their current telecommunications, technology and media company listings. The NYSE plans to recruit U.S. Companies currently listed on the Nasdaq Stock Market for participation in the new ETFs.