Darwinian analogies are sorely overused in business but they describe perfectly the ascent of exchange-traded funds. Smarter and nimbler than their 70-year-old competitor, traditional mutual funds, they are winning the battle for investors’ savings.

ETFs have grown from $1bn 15 years ago to $858bn across 1,768 offerings, but remain dwarfed by traditional funds with $18,150bn in assets across 67,000 products, says Barclays Global Investors. But the trend is clear. ETF inflows were 10 times higher than mutual funds through June, says Strategic Insight. The reasons for the shift are superior versatility, liquidity, tax efficiency and cost. Getting access to mutual fund-dominated bastions such as company retirement plans, including US 401(k)s, could accelerate ETFs’ ascent. Deloitte says that by 2011 US ETF assets will double to $1,000bn or a 10th of US mutual funds.