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Computer Exercise #6 - ETF Hunt -04-06-2011

Computer Exercise #6 - ETF Hunt -04-06-2011 - EE 0822...

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EE 0822 INVE$TING FOR THE FUTURE Mr. Lengkeek INVESTING TOOLS 6 ETF HUNT 6.1 INTRODUCTION There are two objectives to this computer exercise. The first is for you to become more familiar with ETFs (Exchange Traded Funds) . The second is for you to use the various investing tools you have learned about and used in previous computer exercises. The following is an excerpt of an article which is a good introduction to ETFs. 6.2 SPLASH AROUND WITH EXCHANGE TRADED FUNDS By Toni Turner If ever there were a newcomer on "The Street" who quickly gained wide-spread popularity for being attractive, efficient and versatile, it's the exchange traded fund (ETF). Indeed, ETFs have won the hearts - and assets - of nearly everyone on Wall Street, from private traders and investors to professional money managers and institutional hedge funds. ETFs now number approximately 400, with more appearing on the market each month. Fund assets have grown from $25 billion in 1998 to nearly $419 billion as of February 2007. WHAT IS AN ETF? An exchange traded fund is a basket of stocks, or an investment fund, that tracks an assigned index and trades as a single equity. The stocks held by the fund focus on a single theme and are created around every conceivable index. That theme might be a market index, such as the Dow Jones Industrials, the S&P 500, the NASDAQ 100 or the Russell 2000 index. Or the theme could focus on a market sector, such as basic materials, information technology or health care. Themes also include style, such as value or growth, or target corporate bonds, Treasury bonds, real estate indexes or commodity indexes. Specialty ETFs zero in on unique market niches, including nanotechnology, water resources or clean energy. For those who want to go global, international funds represent the icons of industry in countries that span the globe, from Asia to Austria and Europe to emerging markets. To take the global approach a step further, you can select a sector, such as energy, and purchase a global energy fund.
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EE 0822 INVE$TING FOR THE FUTURE MR. LENGKEEK INVESTING TOOLS THIS IS YOUR LIFE, ETF In 1993, global money manager State Street Global Advisors partnered with the American Stock Exchange (Amex) to launch the first ETF: the Standard & Poor's 500 Depository Receipt, or the SPYDR. It tracks the S&P 500 index. The SPYDR trades under the ticker SPY, so traders have nicknamed the stock "the spider." The spider's success led to the creation and development of the "middies" (MDY), which track the mid-cap S&P 400 index.
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