“It’s heating up,” was the first thing someone said to me when I walked into the 10th Annual Closed-End Funds and Global ETFs Capital Link Forum on Wednesday.

It wasn’t clear whether he was talking about the standing-room only crowd that squeezed several hundred into a room designed for far less, or the ETF industry in general, which has seen huge inflows. In fact, by the end of the first quarter of 2011, the ETF industry in the United States had 949 ETFs and assets of $950 billion, from 29 providers on two exchanges, according to Deborah Fuhr, Managing Director at BlackRock and author of ETF Landscape, a guide to industry highlights. This is up from 814 ETFs and assets of $736.3 billion from 29 providers on two exchanges one year earlier.

“It took ETFs 18 years to hit $1 trillion,” Fuhr said on Wednesday in New York City. “It took mutual funds 66 years,” a sign that ETFs are growing at a much faster pace.

Clearly, not all outflows from mutual funds are going into ETFs, but a significant amount are. Twenty percent to 30% of all equity trades in the U.S. are ETFs. The Canadian and U.S. ETF markets have been around for a lot longer than international ETFs so they are larger and have many more foreign investors as well, she said.

Of course, ETFs have seen some volatility this year with fears over what the ongoing Middle East crisis will mean for oil prices. And the Japanese earthquake shaking things up.

One thing that Fuhr said investors should look out for is the promise of “no fees” from providers such as Charles Schwab and Fidelity. Be careful that no fees doesn’t mean that transaction fees over are lower, she explained.

Meanwhile, Kevin Daly, Portfolio Manager, Global Emerging Market Equities, Aberdeen Asset Management, said that emerging market debt has seen a strong year with strong inflows, due to the Federal Reserve’s quantitative easing. But there has been significant risk over the first quarter and J.P. Morgan scaled back their estimates to $40-$50 million in inflows. Daly said the cooling in emerging market debt is actually a positive because there was fear the market could get to “frothy.”