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By Jeremy Glaser | 12-03-2009 10:08 AM

What's on Tap for ETFs in 2010

Between new entrants into the ETF space and further slicing of the market, investors should be ready for an onslaught of new offerings next year, says Morningstar's Scott Burns.

Jeremy Glaser: I'm Jeremy Glaser with Morningstar.com. It's Ideas Week. Here to discuss with me the ever-changing ETF landscape is director of ETF Analysis, Scott Burns. Scott, thanks for joining me.

Scott Burns: Jeremy, thanks for having me.

Glaser: So what do you think some of the big trends for 2010 are going to be in ETF land?

Burns: Well, I think the first thing that I think we're going to see in 2010 is actually a resolution to some old business from 2009. I think the commodity space in ETFs has actually, I think, have been one of the better aspects of ETFs that's really kind of opened up that market. But it's been riddled with a lot of problems here in 2009.

We had UNG basically broke for a couple months during the year, and just commodity funds in general came under fire from the CFTC for position limits and were really kind of victims of their own success.

So I look forward to in 2010 some resolution to that, some driven by the CFTC and whether or not they're going to come out with some rulings about what the position limits really are and kind of end some of this uncertainty.

But on the other hand, I also expect to see some real growth from the ETF industry to help alleviate that, some better designed products that are more able to capture roll yield and aren't victims of this cantango/backwardation problem that's happening right now.

And also just some more funds in general to help alleviate the stress that a couple of these mega-funds have really kind of put on the system. So first up, let's take care of old business.

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