Exchange Traded Products & Indexing Guide Switzerland 2013

Focus
A product concept with added value
When a small group of exchange brokers and exchange employees
in Toronto, Canada developed a new kind of investment
fund 23 years ago that went by the name of the Toronto Index
Participation Fund, they had no idea what revolutionary effects
their new invention would have. The world's first exchange
traded fund was thus born in March 1990. For the first time,
investors could participate in the performance of the Canadian
Stock Index, the TSE 35 Index, without having to go to the arduous
step of purchasing all of the 35 shares in it. From then on, it
was possible to have the entire stock index in one's securities
account by purchasing a single fund share.
Solid advantages
The exchange traded fund performed just like the index and
tracked it like a shadow. In the specialized jargon, this is referred
to as a "passive investment." With it, an investor does
not miss out on a market movement in the index because he
just did not include one or two shares in his share account, or
because he did not otherwise have the means of tracking the
index. The composition and in particular the management — in
the context of the operational administration — of an ETF are
"ETFs become increasingly
popular as product wrapper among
Swiss investors."
clearly simpler and more economical compared with classical
investment funds, because the exclusive goal of the ETF manager
is merely to track the performance of a reference index.
In that way, with ETFs, the investor pays considerably less fees
than he would for classical investment funds, and is always
at least as good as the reference index. These innovative characteristics
continue to define ETFs, to this day.
A kick-start, thanks to some Wall Street innovators
This novel financial product, the ETF, did not remain undiscovered
for long. In January 1993, the idea reached the United
States. Financial product developers Nathan Most and Steven
Bloom in New York City were inspired by the ETF out of
Canada. The two worked for the American Stock Exchange
(AMEX) and also developed a fund listed on the exchange with
which an investor could track the entire Standard & Poor's
500 Index with just one fund share. The new index fund was
shortened to the four letters "SPDR" - for S&P Depositary Re-
08 ExchangE TradEd ProducTs & IndExIng guIdE Switzerland 2013
rECord figurES and ContinuaL growth
CHF bn. ETFs
110
1'100
100 Turnover SIX Swiss
1'000
90
Exchange (in bn. CHF)
Number of ETFs listed
900
80 on SIX Swiss Exchange
800
70
700
60
600
50
500
40
400
30
300
20
200
10
100
0
0
2,940 10
6,258 14
8,361 32
10,564 42
13,519 53
2001
2002
2003
2004
2005
2006
18,984 80
28,814 144
39,479 167
2007
2008
source: sIx swiss Exchange | as of: 28.06.2013
turnoVEr by Etf-iSSuEr
8%
14%
iShares
UBS-ETF
ZKB ETFs
7%
4%
18%
4%
Julius Baer
Lyxor
db x-trackers
Other
source: sIx swiss Exchange | as of: 28.06.2013
50,571 275
71,678 604
2009
2010
ceipts. In the language of the stock exchange, that abbreviation
is pronounced "spider." At first, primarily large-scale asset
managers and banks invested millions in "SPDR." But soon
private investors discovered the advantages of the ETF. The
above-mentioned "SPDR" has become the largest ETF in the
76,082 888
2011
2012
101,938 757
50,316 919
2013
YTD
45%