One of the hottest selling areas in the mutual fund industry has been exchange-traded funds-so much so that asset managers anxious to enter the market are now developing proprietary indexes of their own on which to base such funds, launching niche sector or leveraged ETFs and even enhancing indexes, selecting from benchmark indexes companies with the largest dividends, revenue, cash flow or capital appreciation potential.

But ETFs threaten actively managed mutual funds, according to a report from Boston-based research and consulting firm Celent.

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