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Market Overview
At the end of 2020, exchange-traded fund assets worldwide were worth $7.74 trillion, according to the Statista Research Institute. The countries with the largest ETF industries were:
- North America: $5.6 trillion
- Europe: $1.3 trillion
- Asia Pacific: $0.69 trillion
Since most ETFs are index funds, they generally incur low expense ratios because they are not actively managed. An index fund is much simpler to run, since it does not require security selection, and can be done largely by computer.
In addition, unlike mutual funds, because ETFs do not have to buy and sell securities to accommodate shareholder purchases and redemptions, an ETF does not have to maintain a cash reserve for redemptions and saves on brokerage expenses. ETFs typically have extremely low marketing, distribution and accounting expenses.
As of October 2020, the SPDR S&P 500 ETF Trust was the highest valued ETF globally with a market capitalization of approximately $327 billion. ETFs are generally traded on exchanges and are popular among young investors. At the beginning of 2020, the total market capitalization of all cryptocurrencies was approximately $300 billion. Presently, there are over 8500 cryptocurrencies in circulation with a total combined market cap of over $1.5 trillion. This figure is expanding daily.