ETF Education - Types of Exchange Traded Funds

There are an extraordinary number and types ofone of my very favorites Brazil (EWZ). The Brazil
exchange traded funds that are available toETF is very liquid and represents a country that is
individual investors to meet any investmentquickly turning into the economic powerhouse of
objective. There are so many, however, that it'sLatin America in the Western Hemisphere.
useful to examine the categories so you can5. Business sectors: these include specific market
make a wiser choice for your particular needs.segments such as semiconductors (SMH),
The following list is a simple summary of many ofutilities(XLU, UTH), regional banks (KRE), US
the most popular categories along with a fewresidential real estate (RWR), biotechnology (BBH),
example ticker symbols seem able to look formedical devices (IHI) to name just a few.
when you go to Yahoo finance or MSN Money6. individual commodities & baskets of
Central to do your due diligence. Remember,commodities: this is been a very hot sector over
investing is not child's play and you should consultthe last year and the run may be done.
a financial professional before making anyCommodities tend to be cyclical and very volatile
decisions.at the end of long trends. You can either buy
ETFs have useful variety. No matter what kind ofbaskets like the Deutsche Bank commodities
ETF you need for your trading or investingblend (DBC) or ETF that reflect individual
interests, you are sure to be able to find an ETFcommodities such as gold (GLD, IAU) or grains
that's right for you. You can find ETFs that track:(DBA).
7. currencies & currency pair trades: the
1. broad indices: these are indexes like the Dow 30seven major currencies of the Forex market can
industrial average, the S&P 500 index, andnow be purchased as ETF's including the US dollar
the NASDAQ 100. Their symbols are : DIA,n(USD). You could even get sophisticated pair
SPY,and QQQQ. There are other major indexestrade ETF's which play the difference between
like Japan Nikkei (EWJ), the European large-capcurrency pairs. This is sophisticated trading that is
350 (IEV) and the Morgan Stanley European andnot for novices.
Asian mature company index (EFA). EFA is a8. Morningstar style boxes: there are ETF's the
particular favorite of mine because it representscorrespond to different styles according to them
the mature industrial world minus the US.and MorningStar style box framework such as
2. major market sectors: these include ETF's forlarge-cap value or small-cap growth.
the nine sectors of the S&P 500 known as9. proprietary fundamental screens: there are
the sector SPDRs or "Sector Spiders". Theseeven ETF's that reflect specific investment
ETF's symbols begin with an ax and includestrategies and hypotheses. These all tend to be
finance, industrial, consumer staples, utilities, andvery sophisticated strategies and in order not to
technology among others. These are very highlead you astray I will refrain from reporting their
volume, very liquid and can be traded with optionssymbols. It is enough to know that any philosophy
as well as in direct trading.of investment or trading can be framed with an
3. regions of the world: these correspond toappropriate set of ETF's
different regions of the world markets such as10. varieties of bonds and income-generating
Asia less Japan (EPP), European and Asian mixdividend payers: a couple easy ones are long-term
(EFA), Latin America(ILF), and emerging marketstreasuries (TLT) and aggregate income that
(EEM)mixes treasuries and corporate bonds (AGG)
4. individual countries: there're over 30 separate11. the entire world market.: a simple example is
countries with their own ETF. These typicallythe vanguard total market Index viper (VTI)
reflect the stock markets of each countryWith so many ETF to choose from you can be
comprising the largest capitalized companies. Justsure that there are some that will meet your
to name a few: Canada9EWC), Mexico(EWW) andevery investment need.