The ETF Industry Hits a Huge Milestone

May 11th at 12:00pm by Tom Lydon

A recurring theme on this blog is the fact that the exchange traded fund (ETF) market is booming. The latest proof came in the form of a major milestone for the industry: it has surpassed the 1,000-product mark.

Investors can now choose from more than 1,000 exchange traded products (ETPs). To be clear, this number includes both exchange traded notes (ETNs) and ETFs. The 1,000 mark for ETFs only isn’t far off, though; as of the end of April, there were 905 ETFs available (and 93 ETNs).

The introduction of iShares MSCI Indonesia (NYSEArca: EIDO), iShares MSCI Ireland (NYSEArca: EIRL), and iShares MSCI USA (NYSEArca: EUSA) pushed the total count to 1,001. [More About the New ETFs.]

Some of the reasons contributing to the rapid growth of the industry in recent months include:

  • Fed-up investors. Not content with high fees and little to no transparency, ETFs are proving to be a refreshing change from the old school mutual fund model. [5 Reasons ETFs Are Better Than Mutual Funds.]
  • Better markets. There have been hiccups, but overall, the U.S. economy is improving and slowly but surely, investors are returning to participate.
  • Easy peasy. ETFs are just easy to use. They give lots of exposure in one small trade. There are no early redemption fees or investment minimums. Anyone can use them.

Not to get greedy here, but there’s another milestone quickly approaching: the $1 trillion asset mark. ETFs have $835 billion in assets; ETNs have $11 billion. If the rally continues and investors continue to either discover or deploy available cash into ETFs, it’s a milestone that stands to be reached this year. [How to Put Available Cash to Work.]

The 1,000-ETF mark may not stand for long, since several ETFs are going to close later this month. But the ETF industry has been resilient and it’ll be back into four digits before you can blink.

Sumin Kim contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.