Assets in exchange-traded funds have nearly tripled in the past five years, from $302 billion at the end of 2005 to $819 billion at the beginning of this month. Year-to-date 2010 through August, investors have pulled $29 billion from traditional US equity mutual funds, while ETFs have seen $40.8 billion in inflows. Since risk aversion is rampant at present, what is driving this tremendous and curious interest in ETFs? Can this momentum continue to catapult ETFs to a second big wave of growth?
* Benjamin Fulton, Managing Director, Head of Global ETF Business, Invesco PowerShares