{"id":3810,"date":"2024-07-07T19:34:50","date_gmt":"2024-07-07T19:34:50","guid":{"rendered":"https:\/\/esoftskills.com\/fs\/?p=3810"},"modified":"2024-08-06T14:21:58","modified_gmt":"2024-08-06T14:21:58","slug":"the-role-of-technology-in-the-modern-etf-business","status":"publish","type":"post","link":"https:\/\/esoftskills.com\/fs\/the-role-of-technology-in-the-modern-etf-business\/","title":{"rendered":"The Role of Technology in the Modern ETF Business"},"content":{"rendered":"

The global ETF market has displayed a mind-boggling growth rate throughout the world. Statistics indicate that the assets under management (AUM) held in global exchange-traded funds (ETF) have grown at a compound annual growth rate (CAGR) of 18.9%. This growth has occurred from 2018 to 2023. Experts noted that the AUM reached <\/span>$11.5T by the end of 2023<\/span><\/a>, which indicates a growth rate of over 25% in the last 12 months from December 2023.\u00a0<\/span><\/p>\n

The Global ETF Market is Poised for Phenomenal Growth\u00a0<\/span><\/h3>\n

Predictions for the coming five years are equally striking. The AUM is expected to touch a minimum of $19.2T by mid-2028, translating into a CAGR of 13.5%. This phenomenal growth needs the support of advanced tech solutions. The key defining feature of ETFs is that investors can play the market in real time, making and redeeming investments. Groundbreaking software and apps are needed to enable quick transactions not to mention the need for cutting-edge cybersecurity tools to secure investor interests. Manually handling the sheer volumes of trade is next to impossible. For instance, the <\/span>Tesla short ETF<\/span><\/a> trading, which typically experiences high investor interest.\u00a0<\/span><\/p>\n

ETF Transactions Must Comply with Applicable Regulations<\/span><\/h3>\n

ETF managers are responsible for complying with the various regulations across the different jurisdictions where they operate. They must also meet ESG requirements and investor guidelines. To ensure compliance, they can use tech applications that simplify the process. Automated tools have the capability to supervise pre-, intra-, and post-trade activities at various levels, such as asset class, firm, security, and portfolio. The application also seamlessly handles exposure limits and benchmark comparisons. Typically, the software integrates a selection of standard, pre-determined rules, and procedural templates to ensure compliance. As a result, ETF managers can concentrate on their core investment strategies.<\/span><\/p>\n