Beware Bank-Loan ETFs

When it comes to acknowledging the risks in any given product, the reaction of the exchange-traded fund (ETF) industry can seem monolithic and uninterested, even dismissive: Move on, nothing to see here. But some ETF powerhouses are raising concerns over a tiny sliver of the industry -- bank-loan ETFs. At issue is whether it's wise to cram a tough-to-trade asset into a product as twitchy and fast-moving as an ETF. As always, the truth lies somewhere between the ticking time bomb that critics decry and the brilliant innovation heralded by these ETFs' creators. Bank-loan ETFs do bring considerable risk, and investors should proceed with caution.