The explosion of ETFs has been unstoppable

The growth of Exchange Traded Funds has been unstoppable.

In a note Friday, Goldman's Robert Boroujerdi points out that ETF assets under management was at $230 billion ten years ago in the US.

Today, it stands at over $2 trillion.

ETFs trade like stocks but track a basket of securities, tracking stock indexes, or specific commodities or stocks in a particular country or region.

Here's Goldman:

The rise of ETFs remains unabated. Increasing institutional use coupled with an already strong retail uptake is forcing investors of all kinds to better understand the role of ETFs in today's market. Ignorance is no longer bliss as single stock managers learn to cope with the impact of ETFs on asset gathering, portfolio construction and stock selection.

Boroujerdi further notes that active managers, who ordinarily are more choosy about what's in their portfolios, are in fact some of the largest users of ETFs.

"Surprising to many is the reality that active managers are among the largest users of ETFs with applications spanning hedging, cash management and achieving 'instant' exposure to sectors or geographies in which they are underweight or lack expertise. Lastly the latest round of M+A is galvanizing many to avoid single stock 'blow-ups' on the short side."

Here's the impressive rise of ETFs.