BOSTON - Exchange-traded funds are approaching their capacity, and the development of new types of exchange-traded products is going to be necessary to sustain growth, according to industry executives who spoke here earlier this month at the Performance Institute's 2001 Summit: Beyond Mutual Funds (assets have grown at an enormous rate over the past few years. Total ETF assets were less than $10 billion in 1997, but have passed the $80 billion mark this year).

Alternative products such as ETFs, separately managed accounts, and online customized baskets of securities, or folios,' have received a lot of attention recently as emerging threats to mutual fund assets. ETFs differ from the other two types of investments in that they are actually registered products, and therefore face legal restraints that the others do not, which in turn has yielded a similarity among ETF products, according to Gary Gastineau, a managing director at Nuveen Investments, who spoke at the conference.

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