I a world of very pricey investment products and very well paid investment-product salespeople, ETFs are the ultimate killjoys. Since their arrival on the investment scene in the early 1990s, more than 1,300 ETFs have been created, and ETF assets have grown faster than those of any other investment product. That's a good thing. ETFs enable the average investor to avoid shelling out fat commissions or paying layers of ongoing, unnecessary fees. And they've saved investors oodles and oodles in taxes.
The first ETF was introduced in Canada. It was a creation of the Toronto Stock Exchange- no Wall Streeters were anywhere insight. The story of the development of ETFs isn't quite as exciting as, say, the story behind penicillin or the atomic bomb, it just was a way of making money by generating more trading. The original ETF know as TIP, which stood for Toronto Index Participation Unit. It tracked an Index of large Canadian companies (Bell Canada, Royal Bank of Canada, Nortel, and 32 others) known as the Toronto 35. That index was then the closest thing that Canada had to the Dow Jones Industrial Average index that exists in the United States