Popular ETFs

Exchange Traded Funds (ETF) are gaining more and more popularity
among investors. Among institutional investors, ETF usage at the end of
June grew 11% to 1,571 from 1,413 last year, according to a Morgan
Stanley report. Over the past five years, the number of institutions holding
at least one ETF has risen by 252%. At the end of June there were 179
hedge funds invested in ETFs, compared with 104 in the previous year.

The most widely held ETFs among institutions are the S&P 500-tracking
SPDR 500 Trust "Spiders" (SPY) , and the Nasdaq-100 Trust, or "Cubes"
(QQQQ) , which provides exposure to the largest nonfinancial companies
listed on the Nasdaq Stock Market. The Spiders are the largest ETF, with
nearly $50 billion in assets, while the technology-heavy QQQQ is
frequently the highest-traded security on a given day.

Mutual funds also use ETF as an investment tool to gain more diversity but
they are prohibited from investing more than 5% of assets in a single
investment company.