According to the Dow Jones Newswires press release assets in exchange traded funds (ETFs) rose 40% to $422.5 billion at the end of last year from $300.8 billion in December 2005. There were a total of 357 ETFs at the end of December, with 266 tracking domestic stock indexes with assets at $290.8 billion; 85 tracked international equity indexes with assets of $111.2 billion; 6 tracked bond indexes with assets at $20.5 billion. Also , in 2006, the value of ETFs issued outweighed the value of those redeemed.

ETFs are baskets of stocks, fixed-income securities, or other assets that trade like individual stocks. ETFs are known for low-cost, tax efficiency, and instant diversification.

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