UPDATE 1-Knight Capital to expand ETF operations

*Says 3 Newedge executives to head fund team

*Adds sales and trading staff in Jersey City and London

June 23 (Reuters) - Knight Capital Group Inc NITE.O said it hired three top executives to expand its exchange-traded fund (ETF) capabilities, and has set up a team of sales and trading staff in Jersey City and London.

The electronic trading services provider said it hired Reginald Browne, Eric Lichtenstein and Darren Taube to lead the ETF team as managing directors. They previously served as co-heads of the ETF index group at broker Newedge USA.

"Use of ETFs among institutional investors is increasing across strategies and new products are constantly entering into the marketplace,"said Greg Voetsch, head of institutional client group.

ETFs products have gained rapid popularity as they allow investors to buy assets easily that otherwise might be difficult to acquire, such as precious metals or foreign stocks.

Earlier this month fund manager BlackRock Inc (BLK.N) announced a $13.5 billion deal to buy Barclays Global Investors (BGI), which including its iShare ETF business, from British bank Barclays (BARC.L), to form the world's largest money manager with $2.8 trillion of client funds.

Knight Capital's shares closed Monday at $16.23 on Nasdaq. (Reporting by Brenton Cordeiro in Bangalore, Editing by Dinesh Nair) ((brenton.cordeiro@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: brenton.cordeiro.thomsonreuters.com@reuters.net))