The cost of investing in exchange traded funds (ETFs) that track the FTSE 100 and other major indices is set to fall further, as new players enter the UK market, and greater competition forces down charges.

Already, the number of ETFs listed on the London Stock Exchange has rocketed from 50 in April 2007 to 141 in April 2008. And the total value traded on the exchange last year was £20.8bn - an 82 per cent increase on 2006. Four new issuers joined the market last year - Lyxor, Deutsche Bank, Spa ETF and Invesco PowerShares.