The SEC Is Rethinking Its Approach to ETFs. Here's What It Could Mean For Crypto Investors
The ETF sector started out with broadly diversified products, but it has increasingly offered riskier, more focused offerings.
Overview
Wall Street likes to generate fees. That's what you need to keep in mind as you examine the exchange-traded fund (ETF) sector. The early ETFs all mimicked diversified indexes, like the S&P 500 (SNPINDEX: ^GSPC). But there are only so many big indexes, so Wall Street started to get creative. The next phase of that could be the SEC allowing cryptocurrencies in ETFs. Here's what you need to know.
Early on, ETFs provided investors with broadly diversified portfolios. Even the ETFs that didn't track a well-known index often tracked bespoke indexes that were more focused, but still fairly diverse. Think a sector ETF like Vanguard Utilities ETF (NYSEMKT: VPU) or Vanguard Information Technology ETF (NYSEMKT: VGT). But Wall Street always goes to extremes as it seeks to generate more fees.
Image source: Getty Images.
Details
Source
Originally published at www.fool.com.