Wall Street Banks Dive Into Deep End of ETF Market

The video discusses the involvement of banks in the ETF market, highlighting their shift from ETNs to ETFs to capture the retail wave. It outlines the growth and future projections of ETF assets, emphasizing the profitability of market making over ETF issuing. The challenges banks face in gaining a larger share of the ETF market, due to its meritocratic nature, are also explored.

What has been the trend in banks' involvement with ETFs over the past decade?

• They have maintained a constant level of involvement.

• They have decreased their ETF offerings.

• They have shifted from ETNs to ETFs.

• They have focused solely on ETNs.

What is the projected growth of ETF assets globally over the next 5 to 10 years?

• They are expected to grow by 10%.

• They are expected to decrease.

• They are expected to remain stable.

• They are expected to double or triple.

Why is market making currently more profitable for banks than issuing ETFs?

• Because the volume of trades in market making is significantly higher.

• Because ETFs have a higher bid-ask spread.

• Because issuing ETFs requires more regulatory compliance.

• Because market making involves less risk.

How do banks benefit from being market makers in the ETF market?

• They receive a fixed annual fee.

• They charge a commission on each trade.

• They gain from the bid-ask spread.

• They earn through distribution fees.

What is a key reason banks find it challenging to increase their share in the ETF market?

• There is a lack of demand for ETFs.

• The market is heavily regulated.

• The market is a meritocracy driven by customer choice.

• Banks lack the necessary technology.