Morgan Stanley reports inflows for U.S.-listed exchange traded funds (ETFs) topped $11.6 billion during the first 3 months of 2007. This brings total assets to $480 billion – that’s 10% growth annualized. The ETF industry grew 40% in 2006. Index Universe brings up the question, how will the industry reach $2 trillion in 2010 if growth is at 10% per year?  In order to do that, the annualized growth rate must be at 60% for the next 4 years.

This would only be realistic if ETFs would hit the 401(k) market in a major way; a distinct possibility. To be sure, the number of ETFs listed is growing fast, as 95 new ETFs were added in the first quarter.

Morgan Stanley also reports the two main ETF providers are Barclays Global Investors and State Street Global Advisors, who combined, account for 80% of all assets. That means 15 other companies are sharing the other 20%.

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.