This has been an awfully quiet month for new ETF launches. Through January 30, ETF sponsors had listed only a handful of funds. Though at least one more is likely to begin trading tomorrow, it's safe to say that we're off to a slower start this year than last. Consider--by this time last year, 50 new ETFs had already begun trading.

So, we ask: Where are the new ETFs, mang?

Well, things aren't likely to remain this quiet for long. True, a volatile market backdrop and reports of specialists' reluctance to seed new products with capital doesn't help matters. Further, there's likely truth to the rumors that some sponsors have put certain launches on ice given the challenging competitive climate. The fundamental-indexing field has grown very crowded, for instance, as have other strands of the market. Yet, there are still more than 400 ETFs in the pipeline, and providers have continued to register new funds thus far in 2008.

It's also worth noting that many of the ETFs in the pipeline aren't one-offs from upstart managers facing a tenuous future. For instance, Barclays (aka iShares), State Street (aka SPDRs), and PowerShares account for just under one-quarter of the ETFs still in registration. Firms like these--which wield recognizable nameplates and already command a sizeable following--are far less likely to shelve registrations for competitive reasons. They're the alpha males of the industry, after all. And Northern Trust, one of the biggest institutional indexers around, also has a slew of ETFs in the offing, none of which we'd expect to collect dust in the registration queue.

So, what does that leave us…200-300 ETFs? Sure, some of these aren't likely to see the light of day (mercifully, in some cases…hellooooo StateShares…and KBW Mortgage Finance Index's record would seem to have all the appeal of White Castle stuffing). But consider also that many of the ETFs sitting in registration haven't necessarily seen their fortunes dimmed by recent market tumult. For instance, nearly 70 of these ETFs would invest in bonds or currencies, areas which, if anything, have seen heavier demand of late given the market's volatility. And another 100 or so are funds that would short various segments of the equity market (sometimes with leverage), an approach that would seem to resonate in today's more-uncertain climate.

We're unlikely to see a repeat of last year's deluge, in which 290 funds made their debut. But investors craving still more ETFs are unlikely to go hungry for long.

Jeffrey Ptak
Morningstar, Inc.