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What company pioneered the concept of trading a bundle of stocks in the form of a fund, as easily as buying a single stock?

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ETF Talk: State Street Started It All

What company pioneered the concept of trading a bundle of stocks in the form of a fund, as easily as buying a single stock?

Past ETF Talks have discussed various individual exchange-traded funds (ETFs), but we have never taken in in-depth look at the specific companies that establish and manage them. What company pioneered the concept of trading a bundle of stocks in the form of a fund, as easily as buying a single stock? Well, the first institution to begin trading an ETF was State Street. This company is known for its many SPDR, commonly pronounced â??spider,â?ť ETFs.

SPDR stands for Standard & Poorâ??s depositary receipt. In fact, State Streetâ??s inaugural ETF, and the first for the market overall, falls under this designation. This fund, SPDR S&P 500 (SPY), introduced ETFs to the world in an easily understandable manner: SPY tracks the performance of the S&P 500. Thus, the precedent of using an ETF to track a certain segment of the market and allowing investors the convenience of buying one fund to do so was established.

SPY began trading at the end of January 1993 and it has mirrored the performance of the S&P 500 ever since, ebbing and flowing with the broader market.

Read more about State Street’s first exchange-traded funds at Eagle Daily Investor.

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Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbertâ??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.

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archive

ETF Talk: State Street Started It All

Past ETF Talks have discussed various individual exchange-traded funds (ETFs), but we have never taken in in-depth look at the specific companies that establish and manage them. What company pioneered the concept of trading a bundle of stocks in the form of a fund, as easily as buying a single stock? Well, the first institution to begin trading an ETF was State Street. This company is known for its many SPDR, commonly pronounced “spider,” ETFs.

SPDR stands for Standard & Poor’s depositary receipt. In fact, State Street’s inaugural ETF, and the first for the market overall, falls under this designation. This fund, SPDR S&P 500 (SPY), introduced ETFs to the world in an easily understandable manner: SPY tracks the performance of the S&P 500. Thus, the precedent of using an ETF to track a certain segment of the market and allowing investors the convenience of buying one fund to do so was established.

SPY began trading at the end of January 1993 and it has mirrored the performance of the S&P 500 ever since, ebbing and flowing with the broader market.

Read more about State Street’s first exchange-traded funds at Eagle Daily Investor.

Newsletter Signup.

Sign up to the Human Events newsletter

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Global Elites Started The Russia Nonsense.

U.S. POLITICS

Trump Puts British Intel Under Spotlight: ‘I Hope [Barr] Looks at the UK… I May Talk to PM…’

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