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Survey Finds Exchange-Traded Funds Not Seen as Immediate Threat

Exchange-traded funds probably will not eliminate traditional mutual funds in the near future, but they may represent this decade's most significant product development in the fund industry, according to a survey released last week by Financial Research Corp., a financial-services tracking and consulting firm in Boston.

The survey is based on hundreds of interviews of investors on their knowledge of exchange-traded funds as well as interviews with financial professionals, said Steve Cummings, an analyst with FRC.

Because they cover a basket of stocks and have relatively low expense ratios, exchange-traded index funds in the short term will provide the greatest competition to traditional index funds, closed-end funds, unit investment trusts and sector funds, the survey said.