An increasingly tough environment for launching new exchange-traded funds is encouraging firms with ambitions in the sector to consider buying the competition, according to Freeman & Company.

ETFs are still the fastest growing asset class in the financial industry today but starting a successful ETF business from scratch is not as easy as it was five years ago. The success rate of new ETFs, according to Freeman & Co - as defined by the ETF reaching $100m in assets under management within two years' of its introduction - has fallen from 92% in 2003 to 26% in 2009.