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Investing Outlook for 2010: 5 Reasons ETFs May Surge

Published: Thursday, 17 Dec 2009 | 11:54 AM ET

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By: Tom Lydon
Editor, ETFTrends.com

This post is part of a regular series written by ETF Trends editor Tom Lydon, special for CNBC.com.

This year was a banner one for the ETF (exchange-traded fund) industry. Assets under management blew up to record levels, hitting $751 billion at the end of November, a 54 percent jump from a year earlier. The number of available ETFs also grew handsomely, to 819 listed products, up from 716 in November 2008.

The industry also saw its legitimacy boosted as huge, well-respected names threw their hats in the ring: Pimco, Schwab and Jefferies Asset Management all launched new funds to much fanfare.

T. Rowe Price may be the next behemoth to enter the space after filing for their actively managed funds.

If 2009 was good, though, 2010 is looking like it may be great. Among the things we could see:

More big names. If all goes well with T. Rowe Price’s filing, they could have their actively managed ETFs up and running in 2010. Putnam also announced that they’re considering ETFs. Will Fidelity finally crack and offer more ETFs? They’ve said no, but the pressure is on.

All eyes on BlackRock’s iShares. The merger is complete. Now what? BlackRock is an active manager, iShares has index-based offerings. Many in the industry wonder what might be next.

Commodity ETFs. We’re still waiting for the Commodity Futures Trading Commission (CFTC) to officially rule on position limits within futures-based commodity ETFs. It may finally happen in 2010.

Emerging markets. Emerging markets could continue to be red-hot, and as long as they are, expect to see a slew of filings and launches aimed at giving investors exposure to the space.

ETFs in 401(k) plans. More plans are incorporating ETFs, but they’re far from a staple. Will next year finally be the one in which they make it?