The ETF became one of Wall Street’s most powerful distribution tools because it turned market exposure into an easy-to-use and easy-to-understand retail product.
Investors could buy an index, a basket of bonds, a commodity thesis, or a tightly packaged theme from the same account they use for blue-chip stocks. This was so convenient that it changed both investor behavior and issuer incentives at the same time.
Once the ETF wrapper became the default way for millions of buyers to gain exposure, issuers had every reason to keep stretching it into new territory.
