Is there a bubble forming in Exchange-Traded Funds?

Some ETFs have gotten so big regulators are looking to cap them as ETFs like the US Natural Gas Fund is so big that they having trouble executing on the futures market and have to go to the shady swap market to trade. On the other hand there are more than 500 new ETFs on the launch pad with minimal seed funding.

Read the article here at the WSJ.

I have been a long time investor and advisor on ETFs but with these latest developments I am wary of them at this juncture. Not all but certainly the levered ones as well as he commodity ones.

This entry was posted on 27. August 2009 at 03:06 and is filed under Exchange-Traded Funds. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.