IF.com: Especially in terms of redemptions, that's where you can take a big hit on the open-ended funds more than on the ETFs.

LK: Mutual funds also. Many still have their own transaction fees for entry and exit that have to be taken into account, that get ignored sometimes. We all know about fund supermarkets, which have no transaction fees. And if you have an account with the fund company or you have a no transaction fee supermarket where the fund you want is offered, then you don't pay any fee. But a fair number of investors do pay a purchase charge on standard mutual funds. And what we're seeing a lot of is if you are in a fund supermarket that does not have the fund that you want, and you know particular index funds tend not to be in the transaction fee supermarkets, then you are going to pay a commission essentially - a trading fee to purchase the fund.

My point is that one does need to take into account an apples-to-apples comparison relative to your own situation in terms of investment horizon, the cost of the transaction, the relative savings, and other fees. You really need to account for all those factors carefully and make the best choice. And an ETF may not be the best choice for some people and a traditional fund may not be the best choice for other people.

IF.com: Any comments on State Street's strong move into the international market? Is Barclays going to continue to move aggressively in international, both in terms of U.S.-traded international and foreign-based ETFs?

LK: We are currently the only manager, to the best of my knowledge, who is offering any international products. We offer what is now 21 country funds, I believe, and two European funds, as well. And more, including the S&P Global 100, are on the way. So when it comes to international, we're the only ones offering product right now. When it comes to the foreign markets, we have product running in London and we've made announcements about our intent in Japan. But we intend to be the world leader. Right now there are 69 funds in the U.S., and we manage 56 of them. As for the rest of the world, there's one in Canada. There's one in London. And I believe there are two in Germany. So there's four more around the world.

IF.com: It seems like every day you get a couple new ones popping up.

LK: The market is clearly one that has caught people's attention. Since 1996, when we started with the country funds, we've been pointing out that these are very efficient ways to invest. And you're definitely seeing that the rest of the world has taken notice of this in the last two months. But right now, we lead international in investments and we intend to continue to be the strategic leader in this market.

IF.com: Who do you see as the main competition?

LK: I don't really think much about who is the main competition in that way. We have such a broad product set, we have really the only one that covers all the different sizes - mid, large, and small cap, as well as style, value, and growth. We have a complete set of Dow sectors. We have the international funds. So the product set is just so much broader than what anyone else is offering that it's just very different.

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