Baraness has a good point (see her comment).
The game right now among exchanges is to capture speculators’ money flow from every source available (not just equities). ETFs are good example of how they are doing that. ETFs started out by representing broad market indices (S&P 500 [SPY], NASDAQ 100 [QQQQ], Dow Jones Industrial Average [DIA]) and have moved on to representing currencies, bonds and commodities. The equities exchanges are elbowing in on the aforementioned markets via ETFs. Note the share prices of those that create and exchange these new instruments. Their charts reflect and increase as a result of this initiative (ISE,NYX,NDAQ,BCS). The risk/reward looks like this: the careful investor needs to verify intrinsic value of the etf against the instrument it represents in order to find arbitrage and avoid over-valued risk. The benefit of most ETFs is that they don’t gap much (because they represent a pool of tools) and can be used as a hedge against other asset classes and intra-equity classes. Many also have options for leverage or self-hedges depending on your strategy. I review 150 ETFs every day and play the price patterns according to my trading strategy rules. You will get to see this over time.
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