When investors lend out the ETF units, they get to keep all of that revenue. And they’re increasingly taking advantage of that. While still small relative to the entire ETF market, assets in lending programs grew 50 percent in the past two years to a record $230 billion.
“We’ll probably see more investors willing to lend out their ETFs as the practice becomes more widely known,” Mercado said. “It’s attractive for any investor that’s planning to hold their ETF as long as they’re comfortable with the risks.”
This article was provided by Bloomberg News.