Exchange-traded funds have swelled into a $4tn juggernaut over the past quarter of a century, but many asset managers say the industry is entering a new phase of competition and oversaturation that threatens to squeeze out smaller funds.

More than 90 funds have closed this year through early October, following a record 139 closures last year. Meanwhile, launches of new exchange-traded products, including funds and notes, peaked in 2011 and have remained relatively flat since dipping from that level, according to FactSet data.