Fewer wealthy Americans are using mutual funds, and among those investors who continue to use these investment products, allocations are down significantly.

And as traditional mutual funds lose steam, exchange-traded funds continue to gain popularity and proportional share of retail investor assets, according to a study by Cogent Research.

As this trend continues, the Cambridge, Mass., company said that Vanguard leads other providers in investor impressions across both product categories.

The Cogent report, which is based on a survey of 4,000 investors with at least $100,000 in investable asset, said that 75% of of investors owned mutual funds as of October. This is down from 78% a year earlier and nineteen percentage points below the 94% of investors who owned at least one mutual fund in October 2006.

Meanwhile, within the same four-year period, the proportion of investors who report owning ETFs has increased 57%, from 7% to 11%.

Despite the decline in use over the past year, the proportion of assets current mutual fund owners allocate to these products remained stead, but, since 2006, the average allocation investors make to mutual funds has eroded significantly, down from 53% to 44%.

During that time, the average ETF allocation increased 45%, from 11% to 16%.

“These numbers reflect a dramatic shift in preference among investors for both mutual funds and ETFs,” said John Meunier, a principal at Cogent. “And while it’s impossible to know exactly how things will play out, it’s clear that a major realignment is underway.”

According to Meunier, “Traditional mutual fund providers are fighting tooth and nail for a shrinking piece of real estate, while established ETF providers face a different challenge; fending off a rush of new providers in a rapidly expanding marketplace.”

Despite the erosion in share, some mutual fund providers remain top-of-mind for investors. Vanguard leads in investor favorability in both mutual funds and ETFs. According to Cogent, half of all investors that know Vanguard have strong positive impressions of the firm as both an ETF (52%) and mutual fund (50%) provider.

Vanguard’s strongest competition on this measure among mutual fund providers comes from Riversource (47%), Fidelity Investments (44%) and American Funds (40%). Among ETF providers, iShares (46%), PowerShares (43%), Claymore/Guggenheim (43%), PIMCO (42%), and Charles Schwab (40%) all resonate favorably with at least four in ten investors familiar with each brand.

 “These investor favorability scores not only reflect the strong positive net flows earned last year by Vanguard in both the mutual fund and ETF categories,” Meunier said. “More importantly, they suggest the company’s momentum is very likely to continue in 2011.”