Barclays is an investing leader worldwide now, due in large part to the aggressive adoption of Exchange Traded Funds. Barclays Global Investors launched iShares with 14 funds in 2000 – today there are more than 130 iShares funds trading in the U.S. alone.

Lee Kranefuss is the Chief Executive of iShares funds at Barclays Global Investors and he joins the guys for this conversation.

Which funds are getting most of the money?

“The iShares MSCI EAFE Fund (EFA) which is sort of the S&P 500 of the international market; a broad collection of stocks from around the world, primarily developed markets outside the US,” explains Kranefuss.

“ETF’s are a very effective way to get quick exposure in any brokerage account to almost any market in the world,” he adds.

Some of the traders are critical of ETF’s. They ask how can investors understand what’s in the fund?

“We are the largest index manager in the world… and we brought that legacy to iShares,” answers Kranefuss. “We track as closely as we can to the actual index."

However, he explains that sometimes the narrower the fund, the less it might replicate the index because the indexes are built so they don’t violate US law. (For example, no fund can hold 25% of its holdings in any one stock under US law. However, many smaller countries have a single stock that’s over 25%)

Is this really just a marketing construct?

“At BGI we create ETF’s based on customer demands… we bring out what we consider core modular building blocks so investors have a full range of indexes,” says Kranefuss.

What’s new funds do you wish to see created?

Eric Bolling says he’d love to see an Exchanges ETF (In other words a fund made up of the NYSE, NASDAQ and other world exchanges)

Kranefuss explains within the US there are not enough exchanges. “We’d run into the diversification problem.”

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Trader disclosure: On July 3rd 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Macke Owns (DIS); Najarian Owns (DNDN), (ERIC), (HLT), (JNPR (CBH), (IMMR); Najarian Closed Out Of (BIDU) Today; Bolling Owns (DIS), (T), (XOM), Natural Gas, Corn; Najarian Owned (HOT) On 6/4/07