Exchange Traded Funds (ETF)

You can buy an index fund just like a stock without buying a mutual fund. 

Generally, an investor who wants to buy the S&P 500 index fund, they had to buy a mutual fund that tracks the S&P 500.  These exchange traded funds - which track established market indexes yet trade like a single stock - are capturing the attention of more and more investors. And for good reason: ETFs, like all index funds, can offer a distinct cost advantage relative to high-cost, actively managed mutual funds.  This means an investor can avoid the high expenses related to the mutual funds.

They appeal to long-term investors, who like their lower costs and tax advantages, and active traders, who use them to take advantage of emerging trends in the market.  The following are the popular ETFs that an investor can buy their own just like a stock.

S&P 500 Index:

SPDR Trust;1 SPY
iShares: S&P 500 Index IVV

Fixed income:

iShares: GS $ InvesTop LQD
iShares: Lehm 1-3 Trs SHY
iShares: Lehm 20+ Trs TLT
iShares: Lehm 7-10 Trs IFF
iShares: Lehm Aggreg Bd AGG
iShares: Lehm TIPS TIP

Natural resources:

iShares: Dow US Bsc Mat IYM
iShares: Dow US Energy IYE
iShares: GS Ntrl Rs Idx IGE
iShares: S&P Glbl Enrgy IXC
Sel Sector: Energy SPDR XLE
Sel Sector: Matrls SPDR XLB
Vanguard Mtrls Idx; VPR VAW

Small cap:

iShares: Russ 2000 Idx IWM

There are more ETFs out there.  To research them, you can visit: http://finance.yahoo.com/etf.

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