“Exchange-traded funds are poised to take a bite out of traditional mutual funds and are expected to grow from just over half a trillion dollars to $1 trillion before 2011, according to a soon-to-be-released report,”  David Hoffman Reports From Investment News.

Between March 2001 and March 2008, total ETF assets grew at a compounded annual rate of 44%, according to the report, by Cary Stier, a managing partner in U.S. asset management services for Deloitte & Touche LLP.  “At that pace, it was expected that they would likely exceed $1 trillion before the end of 2009,” the report, “Exchange-Traded Funds: Challenging the Dominance of Mutual Funds?” noted. “However, given current volatile market conditions, at a conservative growth rate of 20% compounded annually, total ETF assets will exceed $1 trillion in mid- 2011.”

“Despite the dominance of mutual funds — which had a little more than $10 trillion in assets at the end of July, according to the Investment Management Institute — ETFs are a threat to mutual funds,” Hoffman Reports.

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