The world of exchange-traded funds looks like an ocean of liquidity: billions of shares trading all day long on easily accessible exchanges. The Journal Report See the complete Investing in Funds: A Monthly Analysis report. Note: ETF data tables will be available Monday, Feb. 1. But beneath the surface is a treacherous landscape of potential trading problems that can raise costs for individual investors. The ease of buying and selling ETFs, which typically resemble index-tracking mutual funds but trade like stocks, has helped make them the darlings of investors big and small. But as ETFs delve into more esoteric areas of the market such as high-yield bonds and commodity futures, trading them has become more complex. Also contributing to problems with liquidity—or the ease with which these products can be bought and sold without big trading costs—are things like regulatory scrutiny, strong investor demand for certain ETFs and the fact that many of these funds now launch with the bare minimum level of assets—often just $2.[Read more...]