Toronto Stock Exchange celebrates 20 years of listing and trading Exchange Traded Funds

2010 marks the 20th anniversary of the creation of the world’s first Exchange Traded Fund (ETF) on Toronto Stock Exchange. To celebrate this milestone, as well as the exponential growth and success of ETFs in the Canadian and global marketplace, TMX Group CEO Tom Kloet and representatives of Canada’s ETF providers will open trading on Toronto Stock Exchange today.

“We are very proud to have led the world in the creation of this revolutionary investment product,” said Thomas Kloet, CEO, TMX Group. “That first listing 20 years ago laid the foundation for the sector’s remarkable growth and innovation – growth and innovation that we plan to foster and support for many years to come.”

The first exchange traded product – the Toronto 35 Index Participation units (TIPs) – was listed on Toronto Stock Exchange in March 1990. This investment product allowed investors to participate in the performance of the TSE 35 Composite Index without having to buy shares in each constituent company. This product was followed by HIPs, which was a participation unit for the Toronto 100 Index. In 2000, these products merged into the iUnits S&P/TSE 60 Index Participation Fund; and in 2006, the fund name was changed to the iShares CDN S&P/TSX 60 Index Fund, the name it uses today.

ETFs are important investment tools for investors, providing flexible and cost-effective product options. Today Toronto Stock Exchange lists a diverse range of funds from a variety of industry sectors and asset classes, including equities, fixed income, commodities and currencies. In 2009, there were 38 new ETFs listings, and there have been 25 new ETFs listed so far this year. As of April 15, 2010, there were 147 ETFs listed on Toronto Stock Exchange with a total market capitalization of $36 billion. In 2009, 16.8 billion ETF shares were traded, representing 14 per cent of all trading on Toronto Stock Exchange. Options on 27 ETFs also trade on Montreal Exchange, which is a wholly-owned subsidiary of TMX Group.

20 years after the launch of TIPs on TSX, the international ETF sector has expanded dramatically as well. As of March 2010, there were 2,131 ETFs listed worldwide, totalling 4,133 listings from 123 providers on 42 exchanges, with a total market capitalization of almost U.S. $1.1 trillion.