A new study by Cerulli Associates says that ETFs are threatening to supplant mutual funds in investors' portfolios. Although the study's authors acknowledge that mutual funds far surpass ETFs in current AUM, they contend that advisors' are using ETF in multiple ways in both the core and satellite allocations.

"We believe that ETFs will be increasingly packaged as solutions with the assembler or platform controlling the portfolio construction," said Cindy Zarker, director at Cerulli and and lead of author of the report, in the release.

"One way mutual fund managers can combat this threat is to assemble portfolios that combine various satellites into solutions that offer professional management to optimize the risk and return," she said.

The study's authors also acknowledge some of ETFs' limits as well. Among them: technological factors, product development limitations and acceptance by platform directors. 

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