Q: Are ETFs guaranteed or insured?

The Depository Clearing Corporation, a government agency, which ensure sock certificates purchased are delivered to the purchaser and assigned to the same. Anytime a new ETF is created, the SEC is sure to review and examine every application. Chances of abuse have been very low.

Q: Are ETFs only for stocks?

No. A liquid asset of any class with a published index can turned into an ETF. There are ETFs for Bonds, Real Estate, Precious Metals, Basic Material, Emerging Markets, Japanese Futures, Top Latin 50, Foreign Currency, Commodities, and many others.

Q: Are there international ETFs?

Of course there are. Countries in Europe and across the Pacific Rim have funds including most developed countries. As other countries gain political and economic stability they will surely adopt ETFs.

Q: Do any ETFs try to beat the market?

A fund that currently beat the market by 2 or 3xs is an actively managed fund. These funds operationally are much more difficult to manage. However it is much simpler when all players in building an ETF know the details of stock investments. Actively managed funds are traditionally more secretive, mainly to shield themselves from eager parasitical resellers.

Q: Are there ETFs for the Dow Jones
Industrials or S & P 500?

Of course, there are several different funds that track these indexes. It’s important to keep in mind the S&P and Dow Jones stay in tact as their own indexes, and more than one fund can track an index through that fund groups license. Pick the fund, open up an account with a broker and start trading.

Q: Could ETFs possibly be a fly-by-the-night trend or fad?

This is highly unlikely. At years end 2009 assets of exchange traded funds totaled $656.91 billion. In fact year over year during the past several years they have had steady growth with no decline. Much faster than traditional mutual funds.

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