ETF's (Exchange Traded Funds)

ETF’s are Exchange Traded Funds that trade like a stock in the different exchanges were they are registered and they replicate either an index like the Dow Jones 30, S & P 500 or Nasdaq 100. ETF´s can do this by owning a portfolio of the same stocks that the index tracks or having a portfolio of stocks or bonds under a Closed End Fund whose shares trade in an exchange like the stock of any registered company.

The advantages of ETF’s are that they can offer instant diversification by just owning shares of a fund that replicates an index that tracks a certain market, sector or type like growth o value and they are less volatile than each of the stocks or bonds that are part of the fund. Also they can be traded as easy as stocks or options, a lot of them can be sold short on margin and some of them are leveraged two times to either the long side or the short side.

ETF funds trade in the following Exchanges:

The following ETF fund families are available:

• iShares
• Vanguard ETFs
• Powershares
• EasyETF
• HOLDRs
• Indexchange
• Lyxor ETFs
• Proshares
• Rydex
• SGAM ETFs
• SPDRs
• StreetTRACKS
• Other