5 Mutual Fund And ETF Red Flags

The U.S. mutual fund industry has been steadily shrinking. Part of that decline reflects the proliferation of exchange-traded funds, or ETFs, which can offer lower fees, greater tax efficiency, and intraday liquidity.

The ETF universe itself has grown to more than 5,500 products. With that much choice, "buyer beware" has never been more applicable.

More choice does not necessarily mean every fund is worth owning. Here are five mutual fund and ETF red flags investors should watch for.

This post originally appeared at U.S. News & World Report.