Maybe not yet, but it’s putting on quite a show.

[Correction: In an earlier version of this article, the second table had an error in the December 2007 AUM column.  Those numbers have been corrected below.]

I spent part of yesterday culling through the National Stock Exchange’s ETF data for the month of November, pulling together our monthly Fund Flows Report. As I played with the numbers, there were several things that jumped out at me:

• The Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) pulled in $487 million in assets in its first month on the market. That has to be one of the top five all-time ETF debuts.
• ProShares and Direxion show no ill effects from the controversy that plagued them earlier this year: The companies are No. 3 and No. 5 on the list of net cash inflows in 2009, pulling in $8.5 billion and $5.7 billion, respectively. Not too shabby.
• The Direxion Daily Financial Bear 3x ETF (NYSEArca: FAZ) has attracted $3.4 billion in net inflows this year, but has only $1.3 billion in assets under management. Ouch.

But as interesting as these hot spots are, the fact that really stands out to me is this:

• Vanguard gathered $5.4 billion in inflows in November, leading all firms and outpacing BlackRock’s (nee BGI’s) $4.2 billion.

Vanguard has been nipping at BlackRock’s heels for months, and it finally won in November. It’s all the more impressive when you consider that these massive inflows landed in 45 Vanguard ETFs versus the more than 150 offered by BlackRock.

The news got me wondering about how Vanguard’s success has changed the look of the “mainstream” ETF industry.

The way we count it, there are currently four ETF companies that aim to provide a full complement of “core” investment products: BlackRock, State Street Global Advisors, Vanguard and PowerShares. Not coincidentally, they are the four largest ETF providers in the world.

All four providers have seen their assets rise substantially over the last year, thanks to solid net inflows and strong market performance. BlackRock leads in terms of dollar value; Vanguard leads in terms of percentage asset growth. But mostly, all four companies have done well.

Peel back another year, however, and the numbers get more interesting: Between 2007 and 2009, Vanguard is the only one of these four providers to grow much at all. And, boy, has it grown, with assets up 108 percent compared with 9 percent for BlackRock, 2 percent for PowerShares and just 1 percent for SSgA.

Of course, the S&P 500 is down 25 percent over that time period, so these numbers mask significant inflows for every ETF firm. But if anything, that just makes Vanguard’s growth all the more impressive.

Crystal-Ball Gazing

The worrisome thing for other ETF providers is that as Vanguard’s ETFs grow, they will whittle away at the advantages that first-mover ETFs have in the space. A number of people have asked me why all the investors in the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) don’t switch en masse to the Vanguard Emerging Markets ETF (NYSEArca: VWO). Both funds track the same index, but VWO has less tracking error and an expense ratio that’s significantly lower than EEM. VWO has been growing faster than EEM recently, but it’s not a landslide.

The primary reason has been name recognition (EEM means emerging markets to many traders), and thus liquidity. EEM is one of the most liquid securities in the world, with an average daily dollar volume of $3.4 billion. VWO’s average daily dollar volume is just $389 million, or about 10 percent of EEM. If you’re a short-term trader concerned primarily about liquidity, EEM is the obvious choice, expenses and tracking error be damned.

But as VWO continues to grow, it seems inevitable that it will slowly chip away at that lead, so that more and more people will move to the cheaper, better-tracking product.

Where does this leave other ETF providers? In trouble. So what do they do?

One obvious answer is to cut costs, bringing their offerings more in line with Vanguard’s pricing. For investors, the increased price competition in the ETF world over the past year is an unmitigated good thing.

Of course, Vanguard can’t sit tight either: Charles Schwab is now the cost leader in the ETF space in the few categories it’s got products, and it offers investors with accounts at Schwab free trading to boot. Schwab’s ETFs have been slowly gathering assets since their launch, and I’d expect that to continue.

For the most part, I think the growth of Vanguard and the entry of firms like Charles Schwab will serve to grow the overall ETF pie. But for now, it does look like these low-cost firms are taking a growing piece of that pie as well.