Financial Innovation and ETFs.

There was a great article last week on ETFs published over at the financial blog Abnormal Returns.  It's too long for me to excerpt but everybody who either owns ETFs or has an interest in these should go read this.  Here's the intro to author Tadas Viskanta's article......

"True, long-lasting innovations ares a rare thing in the world of finance. In my book I argue that the introduction of the ETF or exchange-traded fund was exactly that. It has taken two some decades but we are now seeing real changes in how people invest due to ETFs. I wrote:

Like all upheavals, the ETF revolution has both its benefits and its drawbacks. On the whole, ETFs have made investing easier, more diverse, and cheaper. On the other hand, the introduction of ETFs has changed the actual underlying nature of some markets, and the rapid introduction of new ETFs has diluted the benefits seen early on. Unlike many revolutions, we are not likely to see a counterrevolution unseating the ETF regime any time soon."

...Now go read the rest of the article here.