The recent decision of The Investment Company Institute, the industry trade group in Washington, D.C., to report exchange-traded fund flows is significant because it marks the industry's acceptance of a non-traditional fund product and could promote wider acceptance of the product, according to industry analysts.

Exchange-traded funds were an esoteric product created by non-traditional parties, so there was no reason for the ICI to initially focus on them, said Mary Joan Hoene, a lawyer with Carter, Ledyard & Milburn of New York. In the last two years, however, exchange-traded funds' popularity has increased and the products have become nearly mainstream, she said.

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