ETF Wave Putting Pressure On Smaller Firms

by: Tom Lydon

The ETF world has been a fast growing industry. In the first half of 2007, there were 170 new ETFs launched; that's a 133% increase over the the first half of 2006.

In the list of new ETFs are quite a few specialized products. And there are more to come, as there are at least 363 more ETFs in registration with the Securities and Exchange Commission, reports Lawrence Carrel of TheStreet.com.

The increased competition and trading on the specialized ETFs make it difficult for specialists who help provide funds and maintain the markets. The trading floor, as we've all known it, is morphing into a futuristic automated trading system, reports John Spence for MarketWatch.

The current environment can make it difficult for the smaller, entrepreneurial firms to get ETF products launched. ETF providers are having to seek other means for seed capital, such as private equity. Also, the stock exchanges are competing to create markets that are ETF friendly.

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