2006 ETF Outlook | ETF Trends

2006 is going to be another newsworthy year for exchange traded funds.  Top happenings to look out for in the New Year include:

  1. 32% asset growth in the ETF industry is expected each year for the next 4 years,
  2. New ETFs will be launched representing more sectors, regions and even commodities.  We have already seen narrow sector focus with PowerShares, now iShares is creating their own focus.  Watch for a silver ETF.
  3. Actively managed, leveraged and long/short ETFs – the jury is still out as to when and if the SEC will approve such ETFs, but there is huge potential here.
  4. Distribution channels – you will see ETFs more and more in wrap accounts, 401(k)’s and even hedge funds.
  5. Separate account management – managers have been reluctant to use ETFs in the past, but now there is more respect for them and the ways in which they can be used as an investment tool.

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.