Could exchange traded funds (ETFs) be the U.S. recession's next victim? Currently, the crisis has already claimed a prestigious investment house, although Bear Stearns (BSC) was able to establish itself as the provider of the first actively managed ETF.

Dan Caplinger for The Motley Fool explains that the Bear Stearns turmoil is a simple example of the challenges facing the economy, and even the ETF industry.

Overall, ETFs continue to perform well. But much of the market is focused in a few funds. Of the more than 600 funds available, the seven largest account for about 36% of total ETF assets.

New funds entering the market have become increasingly competitive, as well, and the products are becoming more specialized. Not all of these products are going to be successful, and other providers would do well to follow Claymore's lead from earlier this year and close those funds that don't seem to be in demand by investors.

Consolidation in the industry is likely to continue, especially as the stock market continues to be volatile. The recent outflow in assets is just the natural cycle of things, and once the markets begin to show signs of a turnaround, we predict that things will continue as they had been before times got tough.