By Trevor Hunnicutt
CHICAGO (Reuters) - Too many exchange-traded funds are being offered without enough quality control and could harm investors, fund manager Vanguard Group's chief executive said on Wednesday.
Nearly 290 ETFs have come to U.S. exchanges over the last year, up from 198 in the prior-year period, according to Morningstar Inc (O:MORN) data.
"The proliferation has gotten out of hand," Vanguard CEO William McNabb said in a speech at the Morningstar Investment Conference in Chicago. "I really do worry about some of the new ideas that are out there. We're not selling toothpaste here, or different-colored watchbands."
He did not name any funds that he regarded as poor investments.
Vanguard, which manages $3.5 trillion in assets, will likely launch more ETFs, including actively managed ones, once the company gains regulatory approval, McNabb said.
"We're walking a very fine line" between building funds that will serve investors' long-term needs and creating too many, he told reporters later.
Vanguard's priorities also include reducing the cost of its products, adding financial-advice services and borrowing ideas from financial technology companies in Silicon Valley, he added.
Vanguard's Personal Advisor Services, which has human consultants and also offers investment advice online, has grown to $40 billion in assets under management, up from $31 billion in December.
At the conference McNabb also joined other asset managers, including rival BlackRock Inc (N:BLK) CEO Larry Fink, in saying that more consolidation was likely in the industry, which is under pressure to both lower costs and improve fund performance.
But McNabb said Vanguard was not interested in making any acquisitions.