The exchange traded fund (ETF) industry has had another banner year for business, as enthusiasts expressed optimism regarding the future at the Miami World Series of ETFs conference.  However, if you listen hard enough, there is some trepidation towards the more esoteric and exotic ETF offerings. In as short as 5 years, ETFs have proliferated to the point of such narrow indices tracking thinly defined sectors, spin-offs, and initial public offerings. ETF-like products have reached out beyond the stock and bond market to asset classes like commodities, currencies and precious metals, John Spence for MarketWatch.com reports.

The industry admittedly may be moving too quickly as the average investor would still have trouble describing what an ETF is. Lately, even ETF providers themselves are wary of the specialized funds because they could be misused and misunderstood by investors. Some executives at the ETF conference agreed that education needs to become more of a priority due to the nature of the funds. Structure, risk and strategy are all ideas investors need to be aware of and ready to implement before buying. Overall, the market will decide if the product is a success or not.

Richard Kang points out that traditional style indexing is strong and will be for some time, alternatively weighted indexes are going to have a hard time catching up.