Why ETFs Succeeded for Retail Investors
They have been used differently than their inventors envisioned.
An Inauspicious Beginning
They could easily have failed.
When exchange-traded funds were invented, they were advertised as funds that trade like stocks. (The same could be said of closed-end funds, but those investments came with an asterisk. Sellers of closed-end funds received what buyers would pay, not the calculated value of the underlying assets. ETFs, in contrast, were structured to deliver the full amount.)