Exchange-traded funds continued to grow in popularity, despite last year's poor market performance, as investors continue to look for ways to cut management fees.

According to TrimTabs, there were 160 new ETFs launched in 2008, compared to 21 new mutual funds. Net inflows to U.S. equity ETFs were $120.8 billion in 2008, versus $162.4 billion in net outflows for U.S. equity mutual funds.

A recent survey by Charles Schwab found that 79% of registered investment advisers say they consider ETFs as their top investment vehicles for clients.

"If you're a traditional fund manager and your strength is active management expertise, then you can consider developing an actively managed ETF that provides a low-cost and flexible vehicle to deliver your talent," Loren Fox, senior research analyst at Strategic Insight told Forbes.com.

ETF assets rose 77% from 2005 to 2008, while mutual funds rose 9%. ETFs now account for 40% of the market share of all index funds. ETFs have an estimated $725 billion in assets worldwide.

The 13 actively managed ETFs launched in the U.S. in 2008 had $240 million in assets as of December.

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