The growth of the ETF market over the past few years has been quite spectacular. We've seen many new ETFs launched and a huge expansion into niche areas and moved from being tied to broad indexes to becoming much more actively managed. More recently we've also seen some of the major ETF sponsors eliminate / discontinue some ETFs. Further, a large proportion of the trading in many stocks is not being done by ETFs and mutual funds, rather than individual investors.
What has given rise to this growth and what are the implications for both the stock markets as a whole and particularly the mutual fund industry?