These passive vehicles have a number of advantages, including lower costs than active funds and the ability to track both mainstream equity indices and specific commodities and currencies through the exchange-traded commodity/currency (ETC) variation.

While it may seem strange to choose something that, during a period of market volatility, tracks the very thing that is going up and down, the potential upside is that while the vehicle may slightly lag the index during rallies, investors in general get what they expect.

In contrast, picking an active fund, even a plain vanilla equity offering, adds an extra layer of manager risk in that the investor doesn’t know whether that manager will do well or poorly.

Perhaps in an environment that is increasingly focused on risk, it is not surprising ETFs are starting to make headway in the UK market and globally. Latest figures from the BlackRock ETP Landscape report for September shows global ETP (exchange-traded product) assets reached $2.6trn (£1.6trn), with more than 5,300 products available to investors. While the US-listed ETPs continue to dominate the market with a 71 per cent share of the assets, Europe is slowly catching up with a 17.2 per cent share of the market, while the number of products listed in Europe at 2,219 outstrips the 1,646 ETPs listed in the US.

These products have started to appear on advisers’ radars, possibly driven by continually lower prices, with some offerings from Vanguard now priced with ongoing charges of just 0.07 per cent. As the range of passive products grows, the roles ETPs can play within portfolios broadens too.

Income, for instance, remains a key focus for many investors, and with the forthcoming pension reforms that is likely to only increase. So it therefore makes sense that investors look outside the traditional sources of income generation, and towards perhaps unexpected products such as ETFs.

The only potential obstacle to the success of ETPs is perhaps ETPs’ own popularity. With so many ETFs to choose from, and with so many options for tracking commodities, currencies, equities and fixed income, how do you choose?

The process for comparing ETFs is a fraught business. For example, five North American funds could each be tracking a different underlying index, and with each of those comprised of slightly different weightings towards sectors and stocks, it’s not as simple as just saying definitively this is the best tracker in that region.

Passive investing could be seen by some as an easy option, and ETFs the easiest of them all with their daily trading and low costs, but just because its passive doesn’t mean there is no need to look under the bonnet and find out how it ticks. Otherwise the end investor could be in for a nasty surprise.

Nyree Stewart is features editor at Investment Adviser