Computerized Investing > May/June 2006

On the Internet: Exchange-Traded Funds

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Web Sites for Exchange-Traded Funds
Exchange-traded funds (ETFs) have become a popular investment vehicle for those looking to invest outside of the open-ended mutual fund arena. An ETF is a fund that tracks an index but is traded like a stock. There are now even ETFs that track the value of commodities such as gold and silver, with copper a possibility in the future. ETFs do not track actively managed mutual funds because most of these funds only disclose holdings a few times a year. Instead they track indexes by bundling all of the securities in the index.

ETFs can be bought and sold throughout the trading day and investors can do just about anything with an ETF that they can do with a stock, for example, short selling. Many investors prefer ETFs to traditional mutual funds because of their tax efficiency, low costs and liquidity. The first ETF was created in 1993 and was called the Standard and Poor’s Depositary Receipt (SPDR). It tracks the S&P 500 index.

The Web sites below provide free or reasonably priced data on ETFs. Some of the data comes via fund sponsors while other data is provided by independent sources.

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