PALM DESERT, Calif. – It may have taken almost 18 years for the combined assets of exchange-traded funds to surpass a trillion dollars. But it should only take another three years to top the second trillion.

Exchange traded funds should approach $2 trillion by the end of 2014, according to Darek Wojnar, the managing director of iShares Product Research & Development
at BlackRock, the largest issuer of such products in the nation.

The forecast came at the Investment Company Institute’s 2001 Mutual Funds and Investment Management Conference.

And it comes two months after the ICI first reported that ETF assets crossed the trillion-dollar mark for the first time. In January, the ICI reported $1.0 trillion were held in such funds. In February, the combined assets of the nation's 956 exchange-traded funds surpassed $1.03 trillion, in ICI’s tally.

ETFs grew exponentially between 2000 and 2008, noted Mara L. Shreck, 
associate counsel
 of the Investment Company Institute. Then the credit crisis hit and investors pulled back.

But growth resumed in 2010. And now most types of investment products are available in some fashion in ETF form, from stocks to bonds to commodities to currencies, according to Wojnar.

Even so, 39 percent of assets are still in domestic equity funds and another 24 percent in international equity funds, according to figures presented here by Wojnar. Bond funds count for 14 percent and commodity or currency funds 12 percent. The remainder are largely in sector funds.

But the complexities are increasing. Amy R. Doberman, general counsel of ProFunds Group, described how, for instance, leverage has been applied to a variety of funds.

In these ETFs, the investment objective is to double or triple the basic return generated by the underlying assets. So if an unleveraged fund were to gain 1 percent in a day, the leveraged fund would gain 2 or 3 percent. In an “inverse” fund using leverage, a 1 percent drop would be magnified to 2 or 3 percent.

And if the results kept up, the returns would be accelerated by compounding.

ProFunds Group Tuesday introduced an inverse bond fund that did not use leverage. The ProShares Short Investment Grade Corporate ETF seeks to provide -1x the daily performance of the Markit iBoxx® $ Liquid Investment Grade Index, before fees and expenses. Meaning: If the index goes up 1 percent, the ETF is designed to go down 1 percent. Or vice versa.

Exchange-traded funds got off the ground in 1993 when the American Stock Exchange introduced Standard & Poor's Depositary Receipts, which came to be known as “spiders.”