July 29, 2004 — The combined assets of the nation’s exchange-traded funds (ETFs) rose to $178.5 billion at the end of June, from $166.5 billion at the end of May, as the number of ETFs in operation increased by nine to 143, according to the Investment Company Institute (ICI).

ETF assets totaled $151.0 billion at the end of December 2003.

Of the total number of ETFs in operation at the end of June, 96 tracked domestic stock indexes and held assets of $149.6 billion; 41 tracked international/global equity indexes and held assets of $22.3 billion; and six bond index ETFs held assets of $6.7 billion.

The ICI also noted that assets of domestic equity ETFs increased by $11.2 billion, and international equity ETF assets increased by $1.1 billion.

In addition, the value of all ETF shares issued exceeded that of shares redeemed by $8.4 billion. Equity index ETFs experienced a positive net issuance of $8.5 billion, while bond ETFs experienced a negative net issuance of $182 million. Gross issuance of all ETFs increased in June to $20.0 billion from $10.8 billion in May, and redemptions increased to $11.7 billion from $8.8 billion in May.

Net issuance, which is gross issuance minus redemptions, is roughly equivalent to the unit of net new cash flow that is used for conventional mutual funds.

Below is a list of the five largest ETFs.

ETF

Assets (In billions)

One-Year Returns Through 6/30/04

S&P Dep Receipts (SPY)

$46.19

+19.1%

Nasdaq -100 Trust Ser 1 (QQQ)

$23.03

+26.1%

iShares S&P 500 Index Trust (IVV)

$8.49

+19.0%

DIAMONDS Trust, Series1 (DIA)

$7.75

+18.6%

S&P MidCap Dep Receipts (MDY)

$6.88

+27.8%

Source: Nuveen.

Contact Robert F. Keane with questions or comments at bkeane@investmentadvisor.com.