ETF growth in the US

Any British investors looking to get a handle on the way that trackers are likely to develop should take a look at the US where the whole ETF scene is absolutely huge. And it's still growing. I've reproduced a small article below from Tom Lydon of Seeking Alpha that discusses how fast the sector has bene growing in the US in recent months....and remember that what starts in the US eventually finds it way to the UK...

According to Lydon:

'The total number of ETFs was 542 as of the end of June, and 162 of those were launched in the first six months of this year, according to Scott Burns for The Dallas Morning News . Oodles more are on the way. To get an idea of how fast this industry is growing, Burns looks to the history of mutual funds and index funds for comparison:

• It took mutual funds 56 years before they reached the same number ETFs have in 14 years.
• It took index funds 25 years before their numbers reached 542.

With so many new ETFs on the way, they will enter a market already overflowing with choices. More options provide investors with more opportunities to find ETFs that match their financial goals. However, this also means that investors will have to do more research to understand the differences among all the ETFs. In a world with better educated investors, everyone wins.

By 2011, total assets under management globally in ETFs are expected to surpass $2 trillion, which is up from $669 billion as of June 30, according to a report by Morgan Stanley. Some possible causes behind the growth, according to Pensions & Investments for Investment News , include:

• ETF expansion into new sectors and regions
• Larger allocations by U.S. and European investors
• Managers increasing the number of products brought to the market

The U.S. has the most active ETF market with 1,559 institutions using ETFs, as of Dec. 31 last year.'