| For many investors, an exchange-traded fund is an easy, inexpensive way to gain exposure to traditional, broad-market indexes such as the Standard & Poor’s 500 index. Since the first U.S. ETF launched in 1993, the category has grown to include commodity and currency funds, alternatively-weighted funds and, as of 2008, actively managed ETFs. According to the Investment Company Institute, which tracks and analyzes data on mutual funds and ETFs, there were 1,141 U.S.-domiciled ETFs at the end of 2014.
The largest number of ETFs still track major market-capitalization-weighted indexes. But fund companies have rolled out plenty of offerings that track arcane indexes, regions of the world with less-accessible capital markets and narrow slivers of broad sectors. Other products have complicated methodologies, such as leveraged and inverse ETFs, and some use currency-hedging strategies........................................Full Article: Source
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