Investors continue to embrace exchange traded funds while dropping mutual funds from their portfolios.

That’s the finding of the latest industry study by Cambridge, Massachusets-based Cogent Research.

According to Cogent, as of October 2010, 75% of investors own mutual funds, a figure that is down from 78% a year earlier and a full nineteen percentage points below the more than nine in ten (94%) of investors who owned at least one mutual fund in October of 2006. Meanwhile, within the same 4-year period, the proportion of investors who report owning ETFs has increased 57%, from 7% to 11%.

A Cogent representative commented that “Traditional mutual fund providers are fighting tooth and nail for a shrinking piece of real estate, while established ETF providers face a different challenge; fending off a rush of new providers in a rapidly expanding marketplace.”

The study also tested investor perceptions of ETF providers.  Vanguard came out on top with a 52% strong positive impression. ETF managers  iSharesPowerSharesClaymore/GuggenheimPIMCO and Charles Schwab also had strong positive impressions with more than 40% of investors.

The Cogent Study is based on a nationallly representative sample of 4,000 investors with at least $100,000 in investable assets.