| NEW YORK
NEW YORK Exchange-traded funds have proliferated in niches ranging from cyber security to solar power and even marijuana. On Thursday, a new index fund launched that will let investors chase the growth potential of ETFs themselves.
The ETF Industry Exposure & Financial Services ETF (TETF) comes to market after a record $375 billion poured into the funds globally last year.
ETFs are a basket of stocks, bonds or other assets traded by individual investors and institutions. They can be cheaper to own than competing products, such as mutual funds, from which they have taken market share.
The funds have become a central part of modern markets.
SPDR S&P 500 ETF, which tracks its namesake equity index, is on average the most traded security in the U.S. stock market, by value.
"It's really a 'fin-tech' revolution: It took an inefficient way of investing and made it efficient," said Mike Venuto, chief information officer of Toroso Investments LLC, which built the index for the new ETF.
"Every good idea out there has the potential to be repackaged as an ETF some day."
The new ETF index, which trades on NYSE Arca, includes asset managers, such as BlackRock Inc, Charles Schwab Corp, Invesco Ltd, State Street Corp and WisdomTree Investments Inc.
It also contains other companies benefiting from ETFs' rise, such as CBOE Holdings Inc, Nasdaq Inc, Intercontinental Exchange Inc, which own exchanges where investors buy ETFs.
Virtu Financial Inc, another TETF holding, on Thursday said it would buy KCG Holdings Inc in a $1.4 billion deal that brings together two major players in U.S. electronic ETF trading, sending both stocks soaring. Virtu and KCG were each up more than 11 percent.
The new ETF is managed by Exchange Traded Concepts LLC and Penserra Capital Management LLC, and its fees and expenses total 0.64 percent annually.
(Reporting by Trevor Hunnicutt; Editing by Cynthia Osterman)