The markets are feeling challenged right now, and it’s likely that we won’t see a ton of new assets flowing into the markets and exchange traded funds (ETFs) until we’re in bull territory once again.
So far this year, 25 ETFs have closed up shop. Is the industry settling down after the rapid growth of the past two years? Many analysts agree that the industry may be growing up, but it is far from becoming mature, reports Sue Asci for Investment News.
Some analysts feel that the worst is yet to come for ETF closeouts. A lot of funds may cease to exist in the coming years because were either weak ideas or put out by people that do not have the staying power for getting the ETFs to the masses.
Whether the market is saturated or not, the challenges for new entrants are becoming more intense. The more specialized or obscure an ETF is, the harder it will be to attract enough assets for survival. Larger firms are expected to keep entering into the market, with room to grow in the actively managed arena.
We think the good times are still ahead for ETFs. Even though assets haven’t been pouring in at the same pace they were a year ago, for example, that doesn’t mean they’ve ceased to be attractive or lost their many notable benefits. They’re here to stay.
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.