Herb Morgan has a good barometer to tell how hot the market for exchange-traded funds is getting. Just count the number of mutual funds promoters who approach him to set up a mutual fund that invests solely in ETFs, says the president of Efficient Markets Advisors.

"We're definitely hearing more about mutual funds buying into ETFs," said Morgan, whose firm manages $230 million. "Just the other day I had one of those 'fund in a box' promoters ask me to manage a mutual fund he would set up that would invest in ETFs. And that happens all the time."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.