| For investors, competition can come with some downsides. Such is the case with the exchange-traded fund industry. New ETFs are often based on esoteric or overly specialized strategies. Though such funds may find a niche following, they don’t belong in most investors’ portfolios.
The big challenge facing the ETF industry is that the easy pickings are gone. The mainstream indexes are all being well-tracked. Furthermore, a small number of funds control a significant portion of all ETF assets. As of June 30, 2015, the five-largest funds controlled nearly one out of every five dollars invested in ETFs, according to Morningstar data. You read that right: 20% of the money invested in ETFs is controlled by just five funds..............................................Full Article: Source |