Only a few years ago exchange-traded funds were considered obscure investments, but today, serious investors are reportedly building entire portfolios from the fast-growing investment category through brokerage accounts, Dow Jones News reports.

Heretofore, ETFs were mainly used by institutional investors, but it was mostly individual shareholders who helped push the investment category to $211.7 billion as of Nov. 30, 2004, an increase of $79 billion in net flows from the year earlier.

Brokerage firms are achieving tangible results in efforts to promote the main selling points of ETFs, mainly their low costs and flexible trading advantages, to individual investors. A.G. Edwards & Sons is seen as a pioneer for offering more than a dozen ETF model portfolios back in 2001.

Raymond James has signaled intentions to follow suit with its own ETF offerings later this month, and Morgan Stanley plans to include ETF portfolios in its unified managed accounts program by the summer.

Online brokerage firms like Fidelity Investments and Ameritrade recently bolstered their Web-based platforms with analytic tools aimed at helping individual investors design their own ETF portfolios. But the firms have not yet completely overcome the high expense barrier of expensive dollar-cost-averaging into ETFs.

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