Exchange traded funds (ETFs) have proliferated into even the furthest reaches of the market. You’ve got core funds, niche funds, single-countries, regions, REITs and more. As a result, a debate is taking shape: are the choices too much, or is variety enlivening a growing industry?
ETFs, touted for their low cost, are popping up in a variety of different flavors and variations. From active management to leverage to currencies and commodities, and even religion, the choices are endless, and the exposure that can be had is far-reaching. With all that, though, the industry is far from done. [Cheap ETFs Aren’t Always Better.]
BusinessWeek reports that the next frontier is active management as heavyweights such as PIMCO and T. Rowe Price expand into the industry. And the competition is heating up as even more names, like Goldman Sachs and Russell, throw their hats into the ring.
The final frontier just may be the retirement and 401(k) market, an area where ETFs are in the early stages of infiltration. Once this market can be fully cracked, there just may be no stopping ETFs.
So, yes, the popularity of the ETF has just begun, and it has produced a bevy of products to choose from. Plain vanilla ETFs should always be a foundation in every investor’s portfolio, but the advent of new products is leaving endless choices for those investors willing to try new products. And the competition just keeps the products top-notch. [Common ETF Investing Mistakes to Avoid.]
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.