No, ETF does not stand for Extremely Timid Fools. You're reaching if you guessed Every Team Fumbles, Early Termination Fee, or Entertaining Troubled Finances. Readers of our Motley Fool Champion Funds newsletters will probably be quick with the correct answer -- Exchange-Traded Funds.
ETFs have become a popular alternative to traditional open-ended mutual funds. Blending the static and predictable features of index fund portfolios with the ability to trade freely throughout the day, market-traded ETFs are a reasonable choice for the index fund investor who doesn't want to be tied to just one daily price point at the end of the trading day.
The most popular ETFs are the S&P Depositary Receipts (SPDR) that aim to mimic the performance of the S&P 500. More commonly known as Spiders
Today, Vanguard will be rolling out four new sector-related ETFs under its VIPER (Vanguard Index Participation Equity Receipts) family. Vanguard REIT VIPERs
Granted, between Spiders, VIPERs, and LYONs (liquid yield option notes), one has to start wondering if this is an investor's market or a zoo. Well, perhaps it's a bit of both. The one thing for sure is that with more choices out there, it is the investor who is ultimately being released from the cage.
Have you ever invested in an ETF? Do you find them more appealing than open-end mutual funds? All this and more in the Mutual Funds discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz can think of a few market personalities that belong in the zoo. He does not own shares in any company mentioned in this story.
