Rapid growth of ETF market triggers fears of bubble
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The U.S. exchange-traded fund market is churning out new products at an unprecedented clip, creating concerns about a bubble developing - causing some investors to become more selective about which funds to support and question how many can survive. The ETF industry has exploded in size in response to regulatory changes in 2019 that allowed actively managed funds and those using derivatives to roll out new products more swiftly, while a recent regulatory decision to approve the creation of an ETF share class is likely to generate a fresh wave of products. But that rapid growth has prompted caution from some in the industry about supporting all of these new ETFs. "We're certainly at an unsustainable level of launches, and we're going to have to start seeing product rationalization and closures," said Drew Pettit, U.S. equity strategist at Citigroup, who said the product class could be heading toward a bubble. The explosio...