UPDATE: How to make money from ETFs' runaway growth
By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- The U.S. ETF industry could grow to $15.5 trillion in assets within 10 years, eclipsing the mutual-fund industry, according to one new forecast.
Is such a prediction too rosy? Why should you even care?
Experts on ETFs have a variety of views on those questions, with some basically saying "no way" to that growth forecast.
Many of them agree on at least one thing: You ought to care about exchange-traded funds and their increased use primarily because these low-cost vehicles can put more money in your pocket.
Fans of ETFs also praise the wide range of exposures available through the nearly 1,600 U.S. ETFs that have launched, as well as the intraday pricing and trading that ETFs offer and traditional mutual funds don't.
That tradability and choice, however, can end up costing you money. It's all in how you use them.
A recurring criticism of ETFs is that they make it easier for investors to trade too much or make overly-narrow bets, such as buying the Nashville Area ETF (NASH). That can lead to losses that an investor might otherwise not have suffered with a more long-term, diversified approach. "An ETF is like handing an arsonist a match," Vanguard founder Jack Bogle said years ago.