Just like the ugly duckling, exchange traded funds (ETFs) were once an oddity in a pool of the more popular mutual funds. But things have been changing for awhile now.

Last month, twenty-three new ETFs were added to the fold. That brings us to a total of 683 ETFs with $612 billion in assets in the United States alone. ETFs are slowly but surely entering the mainstream.

While ETFs can stand on their own merits, some of the success of the ETF industry has no doubt been given an assist by the mutual fund industry.

Ten years ago, mutual funds were looking swell: more than 130 of them posted returns of 100% or more at the end of 1999, reports David Hoffman for Investment News [1]. Just six did that in 1998, and zero did it in 1997. So, you can see how the industry began to think it could do no wrong.

But the events that followed put chinks in the armor: the technology bubble burst in 2000 and supposed "can't lose" funds actually lost big. Another pothole was hit when then-New York Attorney General Eliot Spitzer said he found evidence of illegal trading schemes that were hurting mutual fund shareholders.

The industry has managed to remain scandal-free since 2003, but is it too late? Many investors no doubt became disillusioned with the mutual fund industry when all was said and done.

 And now, advisors are increasingly espousing the value of ETFs and trumpeting the fact that they use them.

A study conducted in March by State Street Global Advisors confirmed that advisors love the low-cost, fee transparency and tax efficiencies that ETFs offer. This has led to 76% of the 840 investment professionals surveyed saying they believe the funds fit well in fee-based accounts.

That being said, SSgA and other providers still believe there are some obstacles in the way. Even experienced advisors might find them confusing because of the wide array of choices now available. There are nearly 700 ETFs on the market now, and more are launched weekly.

While that may be true, the world of mutual funds is infinitely bigger. On top of that, ETFs are much easier to understand and use, thanks to the transparency they offer. Mutual funds simply don't have that. So while there may be close to 700 funds, it's easier than ever for investors to do the research necessary to make wise and informed choices.