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A Leaner, Meaner ETF Industry


As money managers engineer more exchange traded funds, a growing number of investment ideas are falling on deaf ears. Nevertheless, this perceived correction appears to be natural, and ETF observers expect to see the industry to expand undaunted.

According to a recent Ignites poll, three quarter of respondents believe ETFs will grow in market share or at least keep its current foothold, despite a increasing number of ETF closures, reports Danielle Sottosanti for Ignites.

According to ETFGI,  a record 117 ETF closed down globally over the first half of the year.

Nevertheless, 22% of the surveyed respondents believe more ETFs will be launched and the industry will bring in more asset inflows. Meanwhile, 53% of respondents say the closures so far this year are just a sign that the market is correcting. [Survey: ETFs Will Continue to Grow Despite Recent Outflows, Closures]

“I do think there’s been a correction — a weeding out — but I see this as a good thing,” Dave Nadig, director of research at IndexUniverse, said in the article. “In the ETF industry, we’re seeing firms start to realize they need to have products in the market with real value and real distribution strategies to succeed.”

Todd Rosenbluth, director of ETF research at S&P Capital IQ, believes that some of the ETFs that closed were too specialized and did not fit at the time. Alec Papazian, associate director at Cerulli, also points out that ETF closures so far have been smaller products that have not picked up momentum.

Year-to-date, 41 U.S.-listed exchange traded products, which include both ETFs and exchange traded notes, have closed while 71 new U.S.-listed ETPs have hit the market. In comparison, 164 ETPs launched in 2012, whereas 94 were delisted.

For more information on the ETF industry, visit our current affairs category.

Max Chen 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.