Starting an ETF is a little like launching a rocket. There are lots of different contractors and regulations. There are plenty of crashes.

Andrew Chanin, the 30-year-old founder of New York-based PureFunds, watched two of his first three ETFs fail before reaching Earth orbit. They liquidated because they couldn't gather enough assets to cover expenses. A third fund barely made it aloft; it still has just $3.6 million in assets.

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