Ronald E. Rowland thinks so, in this Bloomberg article (with chart).
There's little doubt that the ETF industry is caught up in a wave of exuberance, but the jury's still out on whether that exuberance has been irrational. Rowland projects that the number of ETFs will decrease by "more than 100" by the end of this year, but the Bloomberg article ignores that fact that while ETF assets are down because of the declines in global financial markets, fund flows are still positive.
And according to Barclays Global Investors, 472 new ETFs were launched in 2008, trading volume increased by 32.5% and there are currently plans to launch another 604 new ETFs. That hardly sounds like a death knell for what has been one of the world's fastest-growing investment structures of the past few years. As I point out
, they can be smart investments for a broad range of people (mostly for those with money to invest who are looking to reduce fees in their portfolios).
To be sure, there are some crazy ETFs out there--and there are indeed more than enough to satisfy the every urge of any prudent investor--but it might be a tad early to say the industry is on the brink of decline.
