When the SPDR S&P 500 (ARCA:SPY) debuted in 1993, a huge growth industry was born. Exchanged-traded funds (ETFs) have become the go-to fund format for many investors looking to access new asset classes and strategies. More than $1 trillion worth of assets now sit in ETFs, and the industry continues to produce new and innovative fund types.

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This past year was one of tremendous growth in the industry. Fund sponsors sent more than 290 new funds into the market place this year, and 2011 clinched the title for most new products in a calendar year. While there are certainly some stinkers in the bunch, the past year did create some innovative products for investors. (For related reading, see An Inside Look At ETF Construction.)

Low Volatility Options
With global economic unrest facing the broad stock market, volatility returned with a vengeance in 2011. Investors were once again treated to 100 point-plus up or down days, simply based on the macro-economic news. To that end, fund sponsors unveiled a host of new "low volatility funds." The PowerShares S&P 500 Low Volatility (ARCA:SPLV) became the poster child for the fund type, with the most assets under management and largest trading volume. The fund is based on the S&P LV 100 index and includes top holdings in Consolidated Edison (NYSE:ED) and The Procter & Gamble (NYSE:PG). More than 55% of the ETFs holdings are in the utilities and consumer staples categories.

Not to be outdone, a variety of issuers, such as Russell and iShares, unveiled low volatility products as well. These included the Russell 1000 Low Volatility ETF (ARCA:LVOL) and iShares MSCI Emerging Market Min Volatility Index ETF (ARCA:EEMV).

Global Bonds
As investors clamored for more income choices, ETF providers took up the challenge in 2011. With a variety of new global bond choices, investors now have the ability to bet on regions, currency appreciation and interest rates. Funds now exist that allow investors to bet on the risky Italian sovereign bonds via the PowerShares DB Italian Bond ETN (ARCA:ITLY) or the perhaps safer Asian bonds via WisdomTree Asia Local Debt ETF (ARCA:ALD). This year also saw the introduction of yuan denominated or Dim Sum bonds being opened to foreign investors. The PowerShares Chinese Yuan Dim Sum Bond (ARCA:DSUM) can be used to make a calculated bet on Chinese bonds.

Hedge Fund Strategies

Moving beyond plain-vanilla indexing, 2011 saw the introduction of a variety of new strategy-based funds. The Active Bear ETF (ARCA:HDGE) became the first actively managed short ETF, while the ProShares Hedge Replication ETF (ARCA:HDG) tracks an index of hedge fund returns. Perhaps the most exciting strategy focused fund was the launch of the WisdomTree Managed Futures (ARCA:WDTI). The ETF invests in a combination of U.S. treasury futures, currency futures, non-deliverable currency forwards, commodity futures and commodity swaps in order to produce non-correlated returns. The fund has proven popular surging to nearly $260 million in assets.

Small Cap Real Estate
After a dismal performance in the credit crisis, real estate funds bounced back in 2010 and 2011. However, the major funds in the sector like iShares Cohen & Steers Realty Majors (ARCA:ICF) only bet on the largest of firms. Small cap REITs have a host of benefits including higher income potential and significant capital gains. Credit crunch aside, smaller real estate firms historically outperform their larger cousins. The IQ U.S. Real Estate Small Cap ETF (ARCA:ROOF) follows a basket of 41 different small cap real estate firms and currently index dividend yield around 8.54%.

Innovation into the New Year
The ETF industry experienced tremendous growth throughout 2011, and many issuers added new and exciting products to the mix. The previous funds are just some of the examples of the wide range of asset classes, regions and strategies that exchange-traded funds allow investors to tap. Based on several preliminary filings, 2012 should shape-up to be a great year as well. (For more, see How To Pick The Best ETF.)

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At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.