Sales of exchange-traded funds soared in the first half, according to a study by Strategic Insight, a New York mutual fund research firm.

Net inflows totaled $17 billion, the study found - $5 billion in the first quarter and $12 billion in the second. The total for all of last year was $15.2 billion.

The assets in domestic-based exchange-traded fund increased 48.3% in the first half, to $52.8 billion, according to the study, which was issued Wednesday.

Exchange-traded funds are listed on an exchange and can be traded throughout the trading day, unlike regular mutual funds, which can be bought and sold only at the end of the market day.

The most popular exchange-traded fund, the study said, is the Nasdaq 100 or "QQQ" fund, which captured 40% of the net cash inflows in the past six months.

The fund increased 115%, to $12.7 billion despite the fact the Nasdaq fell significantly during April and May. The QQQ fund was established by Boston's State Street Corp.

Barclay Group Investors' iShares family of funds, launched in May, attracted $2 billion in cash net inflows by the end of June, the top figure for funds launched in the first half. Barclays offers 45 exchange-traded funds and has 20 in development.

An exchange-traded fund "is a very good way to create an optimal investment allocation for the customer," said Avi Nachmany, the director of research at Strategic Insight.

The funds, which have been around since 1993, have become very attractive to investors and financial institutions because of the portfolio diversification in the past year, he said.

For investors, the products are more tax-efficient than open-ended funds, and more flexible because of the ability to trade them at intra-day prices. For financial institutions, the funds offer an opportunity to attract more of an individual's market share.

The meteoric rise of exchange-traded funds will continue, because the growth is not just a result of market performance, Mr. Nachmany said.

"The fact is there is an expanding, broadening acceptance of exchange-traded funds in multiple market segments that creates a better foundation for the growth over the coming years," he said "If there was growth in one place, [the funds] could be dismissed as a fad, but that just isn't the case here."

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