In the midst of market recovery, the exchange traded fund (ETF) has grown by leaps and bounds. More funds than ever are listed and assets under management are at all-time highs. But is it too much too soon?
Recent numbers supplied by the National Stock Exchange show that the number of U.S.-listed ETFs has jumped 11% from 716 in October 2008 to 796 in October 2009. Part of this rapid growth comes from the launch of a number of niche or specialty ETFs, which track narrow corners of the market. (How to choose ETFs).
If one is trying to make the case that there’s a glut of products for which there’s no demand, it’s tough to find supporting evidence. Investor interest is keeping pace with the launches and filings that providers are serving up, reports Don Dion for TheStreet. Assets shot up to $707.4 billion in October 2009, a 44% jump from a year earlier.
Of those assets, more than $268 billion is invested in the top 10 largest ETFs, which includes broad index funds, emerging market ETFs and commodity funds.
Having a wide variety of ETFs available not only gives investors more options from which to choose, but they also help foster healthy competition within the industry that ultimately improves the ETF investing experience for everyone. (Wondering what an ETF is and how to invest in them?)
For more stories about ETFs, visit our ETF 101 category.
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.