Exchange Traded Funds (ETF) have come a long way from that first passive, index-based, novel idea. The 1987 stock market crash paved the way for pioneers such as Nathan Most and Steven Bloom, with the aid and guidance from Ivers Riley and Kathleen Moriarty (aka “SPDR Woman”), filing for the new investment wrapper in 1989. In 1989, the Berlin Wall came down, Nintendo released the Game Boy, NASA launched the Galileo Spacecraft, there were pro-democracy rallies in China’s Tiananmen Square, the first liver transplant took place, the first version of Microsoft Office was released, the Dow Jones ended the year at 2,753, and some of us were getting ready to graduate from high school and head off to college!
It took more than four years before the ETF concept would get Securities and Exchange Commission approval and eventually launch.1 While the SEC was going through meticulous mechanics, the first ETF launched in Canada in 1990.2 In January 1993, while the cost of gas was about a dollar per gallon, the financial world ushered in the launch of the first U.S. ETF. Little did we know, at the time, the role ETFs would play in the financial industry—as we have come to understand it today!
Now, some 30 years later, there are more than 3,000+ ETFs on the market, and as of December 31, 2022, they hold over $6.5 trillion in assets under management. As the distributor for the first U.S. ETF, SS&C ALPS has been there since the beginning, and we continue to be an experienced thought leader in the industry. Below is a timeline of the history of ETFs.
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- Balchunas, Eric and Weber, Joel. “A Meteor Lands at the SEC: Why it Took Four Years for SPY to be Approved,” Bloomberg.com November 21, 2018.
- Balchunas, Eric and Weber, Joel. “Something in the Air: AMEX Wasn’t Alone in Designing the First ETF”, Bloomberg.com December 6, 2018.