The Individual Investor’s Guide to Exchange-Traded Funds 2011
We have expanded this year’s guide, adding nearly 100 new funds to the print version and more than 250 to the online version, to help individual investors navigate the expanding exchange-traded fund (ETF) industry. Also included in this year’s guide are five calendar years of performance data (where applicable, as many ETFs have inception dates after 2006) and five-year annual return (where applicable).
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There are many superlatives we could use to describe the growth in ETFs, but we’ll let the facts speak for themselves. Our first ETF guide, published in 2003, listed 130 exchange-traded funds. This year’s print guide includes 427 funds, and information on more than 850 additional funds is available on AAII.com.
In this article
- Three HOLDRS Removed
- How to Use This Guide
- Which Funds Were Included
- Ultra and Contra ETFs
- A Key to Terms and Statistics
- Exchange-Traded Fund Categories
- ETF & ETN Contact Information
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A more important statistic is the dollar amount of assets held by exchange-traded funds. Investors, both institutional and individual, show their favoritism for an investment by putting their dollars into it. As of the end of June 2011, the ETF universe held $960 billion in net assets, according to research firm Lipper. This represents more than a 100-fold increase since June 1998, when assets totaled just $9.2 billion.
While statistics can look large when calculated from a small base, the industry is continuing to grow at a very strong pace. Since 2007, total assets have more than doubled—increasing by nearly $500 billion dollars. The anticipated introduction of new, actively managed ETFs seems likely to propel these numbers even higher.
This rapid growth has lowered the barriers and costs to many investments. This is particularly the case for foreign markets, currencies, commodities and hedge fund–like strategies. The advantage is that diversification has become easier and cheaper. The disadvantage is that specialized funds have unique risks that may be more difficult to identify before they adversely impact performance. A key rule to consider when evaluating a specialty fund is that just because you can invest in something, does not mean you should.
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Discussion
Excellent explanation of ETFs.
Very thorough. As a very long time investor in stocks, bonds, mutual funds and options, this is a good basis for a beginner learning the ETF scene.
posted about 1 year ago by Barbara from Florida
Excellent presentation. I suggest you number the pages to allow for viewers to print copy a specific area of interest;e.g,ETF and ETN Contact Information without havng to copy all pages.
posted about 1 year ago by Oliver from Illinois
Not sure why, but if I click on table/classification links all I get are empty excell tables with no data displayed.
posted about 1 year ago by Vernon from Florida
My compliments to the staff. The excel downloadable spreadsheet provides an excellent compilation of data for research. Well Done!
posted about 1 year ago by Vernon from Florida
A very helpful exposition overall.
Just one of the many useful tips is to watch the expenses of commission-free ETFs, which may not yield the best overall return. I had not thought about that.
With your tools I can perform the required analysis to drill down to the best approach for my particular situation. Thank's for all the effort that went into making an unwieldy topic manageable.
posted about 1 year ago by Bruce from Michigan
Excellent articles, clear concise and thorough. I would have liked however, to see more information on ETNs. I have seen cautionary articles about their risks and hidden tax exposure. They are very different from ETFs and are not backed by any assets (e. g. stocks or bonds) just the faith and credit of the issuer. Personally, I would never buy one.
posted about 1 year ago by Jonathan from Texas
Why are Blackrock ETFs missing from your listings/tables?
posted about 1 year ago by Tom from Florida
Blackrock owns iShares and those ETFs are included in the guide. - Charles Rotblut, AAII
posted about 1 year ago by Charles from Illinois
