At the end of November there were 1,376 exchange traded funds and notes listed on U.S. exchanges, up from 1,093 a year earlier. Many of the ETFs listed over the past year are designed to track popular investment themes such as bonds, dividends and conservative, low-volatility approaches.
New ETFs, designed to appeal to buy-and-hold investors, include strategies that will help stave off market volatility and provide exposure to solid dividend-payers, reports Mark Jewell for MSN Money. Many fund providers are moving away from the tried-and-true passive ETF formulas and are beginning to dabble in alternative strategies, such as screening for stocks with the lowest-volatility or highest dividend providers. [New Factor-Based ETFs from Russell]
Current popular ETF investment styles include reduced volatility, dividend-income payers and bonds. [Dividend ETF Gets Warm Reception in Europe]
Ryan Issakainen, ETF strategist with First Trust, points out that ETFs are now starting to deliver “an investment strategy, rather than just replicating a benchmark.”
Most ETFs are like index mutual funds in that they hold a basket of securities and attempt to match market movements, except ETFs are cheaper since there is no need to pay a manager to pick stocks. Additionally, ETFs may be easily traded during the day.
The three largest ETF fund providers are iShares, State Street Global Advisors and Vanguard. [What are ETFs? — Surveying the Landscape]
PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV)
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.