bkewlv
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At the moment, all ETFs are essentially index funds, which is to say they track the performance of a specific stock or bond market index or other benchmark.
The first ETFs to hit the market back in 1993 were SPDRs, or "Spiders," which track the Standard and Poor's 500 index of large-company stocks.
Several years later came "Qubes" (so named because of their QQQQ ticker symbol), which track the 100 largest nonfinancial companies on the Nasdaq. Qubes were all the rage prior to the market's meltdown in early 2000 because of they contained some of the best-known and, at the time, highest-flying tech stocks.
Today, by sifting through the offerings of the Big Kahunas in the ETF market -- State Street Global Advisors, Barclay's Global Fund Advisors and Vanguard -- you'll come across ETFs that track everything from the entire U.S. stock market to various slices of it: large stocks, small stocks, value, growth, energy, tech, utilities, REITs -- virtually any industry or sector of the market.
Looking to invest "Over there"? You'll find ETFs that track developed foreign markets overall, individual countries (Austria, China, Malaysia and the United Kingdom to name a few) or even emerging markets.
Want bonds? You can invest in ETFs that mirror the entire U.S. bond market, the corporate bond market, indexes of short-, intermediate or long-term Treasury bonds and TIPS (Treasury Inflation Protected Securities).
There are even ETFs that track the price of gold, and another in registration designed to track the price of oil, the first steps toward what may be a slew of ETFs for other commodities (Pork Belly ETFs anyone?). |
hullmiddle
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A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange, thus experiencing price changes throughout the day as it is bought and sold.
Exchange-Traded Fund - ETF |
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