Assets held in exchange-traded funds have increased this year, and executives expect an even bigger surge when more products are introduced this fall—if markets are ready for them.

This increase in ETFs will help advisors get their clients back into the market so they can profit from the upswing without huge expense, says Alois Pirker, research director at Aite Group. It is awkward for advisors to charge clients big fees when they've lost so much and ETFs have a huge advantage in terms of fees, Pirker notes.

In the first half of the year, 39 ETF portfolios were started (46 were liquidated) and ETF assets increased 11.1%, according to a recent survey by State Street Corp. In June alone, 12 funds were introduced and ETF assets grew 1% from a month earlier, to $592.6 billion.

The development of new funds is starting to pick up after "coming close to halting" last fall, says James Ross, a senior managing director at State Street. "We are seeing some positive flows, and that is good news given that markets have been relatively flat over the past 12 months," he says.

Some fixed-income ETFs have already been launched this year, Ross says, and though he expects a slow July and August, he expects more to be introduced in September.

"We are starting to see some regrowth as investors are looking for new products," he says. "In June we saw $20 billion of positive flows into fixed-income ETFs, and there is some really strong demand for those products."

Indeed, the ETF market is definitely ripe for growth going forward, Pirker says. Once assets re-enter the market they will go toward ETFs, he says.

In fact, the effect of the financial crisis will even benefit ETFs, Piker says. A lot of fund companies charge upfront fees to lock people in. Investors pulled the plug during the crisis and there were huge outflows from mutual funds. But now they're putting assets back in and they'll take a fresh look at where to invest. They'll be wondering if they really want to put their money with the company that lost them 40%, Pirker says. And now, they won't be locked in anymore. It will be much easier for them to go to an ETF, he adds.

To be sure, some industry observers are less bullish. W. Christopher Maxwell, a managing partner at the Rock Hall, Md.-based wealth management firm Conestoga Capital Advisors LLC, says investment managers may have ETFs that have waited on their shelves for months, but most companies will remain wary until markets really rebound. "ETFs may trickle out," he says, "but I don't expect a surge.... Getting a new product off the ground is difficult, and in this environment it is nearly impossible, especially for ETFs," he says. "A couple of months is not going to change that."

Geoffrey Bobroff, the president of Bobroff Consulting in East Greenwich, R.I., notes that many investment companies have put product introductions on hold until the economy shows sustained recovery.

Barclays Global Investors' iShares unit remained the largest ETF provider as of June 30, with $292.1 billion of assets-or 49.3% of the market, according to State Street.

Barclays, which announced last month it had sold its investment unit to BlackRock Inc. for $13.5 billion in a deal that is expected to close this year, is trailed by State Street, which had $143.5 billion, or a 24.2% share, and Vanguard, which had $59.1 billion, a 10% share.

Cindy Zarker, a director at Boston-based research firm Cerulli & Associates, says she expects more actively managed ETFs to be introduced this year. Given BlackRock's history with actively managed mutual funds, it is likely to launch such products. Most new entrants are ushering in actively managed products rather than index funds, she says.

Conestoga's Maxwell says he remains skeptical about actively managed ETFs.

Ross also says introducing actively managed products can be difficult because they require Securities and Exchange Commission approval and, "right now, [the agency has] have a lot on [its] plate" in regulating the financial services industry.

State Street applied to the SEC 15 months ago to introduce a series of actively managed ETFs. "I think we will see some more funds on the active side," Ross says, "but how many will depend on a lot of factors that companies just cannot control."

Helen Kearney from On Wall Street contributed to this article.