The battle of the two biggest emerging markets ETFs was front and center last year, with Vanguard's huge fund hauling in more assets than any other ETF, while the iShares version of the same product suffered more outflows than any other exchange-traded fund. Overall, U.S. ETFs attracted more than $119 billion in 2011 and total assets, including market moves, rose 5 percent to almost $1.062 trillion.

For a year that began with the Vanguard MSCI Emerging Markets ETF (NYSEArca: VWO) eclipsing the iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM) to become the world's-biggest ETF focused on developing countries, the divergent flows were a fitting bookend. VWO pulled in $7.86 billion in 2011, while EEM had redemptions of $6.59 billion, according to data compiled by IndexUniverse.

VWO's place at the top of the creations list for the whole year was also a fitting symbol of Vanguard's growing stature in the ETF industry. Valley Forge, Pa.-based Vanguard, the No. 3 U.S. exchange-traded fund firm by assets, gathered $35.69 billion in new money in 2011—more than any other ETF firm last year. In the end, three of the five most popular ETFs last year were Vanguard funds.

To the extent that a big attraction of plain-vanilla "pure beta" ETFs is that they're much cheaper than mutual funds, Vanguard is living proof that slugging it out on price is a winning strategy. It has been slowly gaining on the Nos. 1 and 2 ETF firms, BlackRock's iShares and State Street Global Advisors, though it's probably still a ways off before it moves up the league tables.

Vanguard's not alone in trying to compete on price. San Francisco-based Schwab's proprietary ETF unit may be small, but its low-cost strategy is working as well. Its ETFs pulled in $2.59 billion last year and their assets, including market movements, shot up 85 percent to more than $5 billion. FocusShares, Scottrade's low-cost ETF unit, meanwhile netted $84.5 million in its first year of existence.

Apart from the allure of inexpensive ETFs from sponsors like Vanguard and Schwab, another important theme in 2011 flows was the popularity of fixed-income ETFs, as investors looked for asset classes that might weather the eurozone debt storm better than equities. Treasurys ETFs were the best performers last year, but broad bond funds and those focused on corporate debt gathered the most assets.

In all, fixed income as an asset class attracted more than $43 billion last year, with $37.83 of that focused on U.S. bonds. Equities meanwhile pulled in some $64 billion, with about $41 billion of that targeting U.S. stocks.

A number of defensively focused equities funds were among last year's more popular investments, including those targeting attractive dividends and utilities.

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