Exchange-traded funds had a banner year in 2004 in which the nascent investment classs grew by a staggering 47% to $222 billion, according to Morningstar.

The ETF industry grew by leaps and bounds through 35 new product launches that included low-cost exposure to developing markets like China and commodities sectors that appreciated rapidly. For example, State Street Global Advisors' StreetTracks Gold Trust ETF soaked up $550 million within hours of its launch in November and has since grown to $1.5 billion. Mutual fund heavyweights like Vanguard Group endorsed ETFs by introducing 18 new Vipers last year, while Barclays Global Investors debuted 13 new ETFs.

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