Halfway though 2012 it appears new exchange traded fund launches have waned, leading to one of the slowest years for new products to hit the market. On average, over the past 5 years, 55 new funds have launched per quarter, according to a report.

As of June 13, 2012, there are about 200 different U.S. equity style ETFs to pick from, and about 588 specialized market segment fund to choose from. Plus, over the past 5 years, there has been an average of one new ETF launch per day. Most analysts agree that the rate is unsustainable. [Why Zombie ETFs are Still Kicking]

The 1,469 ETFs that are currently trading indicate that there is no shortage of funds to choose from. There isn’t a whole lot of sectors and niches that have been left untouched. In other words, an investor that wants broad-based diversified exposure with ETFs has plenty of choices and pretty much any sector or specialized niche that one would desire is available. [Why ETF Growth May Cool]

This does not indicate that there is not room for improvement or more products, reports Paul Britt for Index Universe. In fact, it ups the level of competition and puts the pressure on for providers to keep a high quality product available at a reasonable price. [Jeffries Left with Single ETF After Latest Closure]

Inevitably, the stock market and the investors decide which funds will keep trading and which ETFs will have to shut their doors. In general, ETFs that have less than $5 million in assets under management for about 3 months and have been on the market for at least 6 months total are likely to consider dissolving. [ETF Tickers Can Help Make or Break New Offerings]

If ETFs do not gather enough assets, fund providers may not find it profitable to keep the ETF. However, larger companies with deeper pockets may patiently wait it out until a fund becomes popular enough to generate sustainable profits.

Tisha Guerrero 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.