Sales of exchange-traded funds have grown rapidly in the past three years, but the number of companies manufacturing them in the United States shrank to seven last year and is unlikely to grow, market participants said.

Three of the seven - State Street Global Advisors, Barclays Global Investors and Bank of New York - have nearly 97% of the $228 billion U.S. exchange-traded fund market. There were eight providers in 2003, but UBS Asset Management, which managed two exchange-traded funds in this country, with $116 million of assets, sold out last year to State Street.

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