Can you give me a list of the available Exchange Traded Funds?
There is an ever growing number of Exchange Traded Funds available to buy and sell throughout the trading day. These funds can be categorized into three types of funds: Broad-Based, which track a broad group of stocks from different industries and market sectors. For example, iShares S&P 500 index fund (symbol IVV) is a broad based ETF that tracks the S&P 500. Sector, which track companies represented in related industries. For example, iShare Dow Jones U.S. Healthcare sector Index Fund (symbol IYH) is a sector ETF that tracks the Dow Jones Healthcare sector. International, which track a group of stocks from a specific country. For example, iShares MSCI- Australia (symbol EWA) tracks the Morgan Stanley Capital International index for Australian stocks. Click here for a list of Exchange Traded Funds.

Where can I buy or sell Exchange Traded Funds?
You can buy or sell ETFs through a broker of your choice, just as you buy stock.

Who manages the Exchange Traded Funds?
The manager depends on the product. All iShare products are managed by Barclays Global Investors (BGI), while all HOLDRs are managed by Merrill Lynch. SPDR funds are managed by State Street Bank and Trust company or the Bank of New York. The Bank of New York is also the manager for the Nasdaq-100 Investment Trust, QQQ.

How easily can I buy or sell Exchange Traded Funds?
As easily as you can buy or sell shares of stock. ETFs make it easy for you to buy or sell shares throughout the trading day while traditional index mutual funds can generally be purchased or redeemed only at an end-of-day closing price.

What is the minimum purchase?
You can purchase as little as one share for most ETFs. Merrill Lynch HOLDRS, however, must be acquired, held or transferred in a round-lot amount of 100 HOLDRS. Odd lots (fewer than 100 HOLDRS) WILL NOT TRADE.

Why invest in an index?
Indexing, often called "passive management," involves investing in a group of stocks that represent the composition of a broad-market, sector or international index. Index funds offer "market level" performance; they aim to consistently match the market performance of a specific index, no more, no less, in advancing or declining markets. Indexed investments may outperform most actively managed funds over the long term, and generally have lower management and expense fees.

What are the benefits to ETFs trading as stocks?
ETFs offer several advantages to Exchange Traded Fund investors:

• Buy and sell at any time duing the trading day. Unlike open-end mutual funds that can only be redeemed at the end of the day, ETFs are priced throughout the day and can be bought or sold just like a stock.
• Instantly get exposure to a portfolio of stocks of your choice. You can choose a fund that either represents a broad-based market index, a specific industry sector or an international sector.
• Ability to buy on margin (see below for details)
• Can be sold short (see below for details)
• No sales loads, although brokerage commissions will apply.
• No high management and sponsor fees. Expense ratios are very similar between ETFs and open-end mutual funds. Usually, they range from .18% of the value of the fund to .84%.
• Tax efficiencies. Both ETFs and open-end mutual funds provide low stock turnover, which in itself is tax efficient because capital gains are not realized. However, ETFs provide a tax advantage not available with mutual funds. Mutual funds sell securities to cover redemptions creating capital gains. ETFs transfer securities out to redeeming shareholders instead of selling the securities thus minimizing taxable capital gains.
• Diversification. Proper investment diversification is intended to reduce the risk inherent in particular securities. It is the acquisition of a group of assets in which returns on the assets are not directly related over time. By containing the stocks in an index, an investor has a broader number of companies which gives a degree of protection in case the price of one company in the index goes lower.

Can Exchange Traded Funds be sold short?
Yes. All Exchange Traded Funds may be sold short, representing the sale of "borrowed" shares in anticipation of lower prices when the borrowed shares must be replaced. Certain Exchange Traded Fund products are also exempt from the rule that requires shares to be sold short only on an "uptick" (i.e., a last sale price higher than that of a security’s preceding last sale).

Can Exchange Traded Funds be purchased on margin?
Exchange Traded Funds may be purchased on margin, generally subject to the same terms that apply to common stocks. You should contact your broker regarding initial and maintenance margin requirements.

Is there a sales load on Exchange Traded Funds?
While ETFs are not subject to sales loads, ordinary brokerage commissions for purchases and sales will apply. There is a small expense ratio for ETFs which is similar to open-end index funds.

Do I get paid dividends and/or capital gains?
Exchange Traded Fund holders are eligible to receive their portion of dividends, if any, accumulated on the stocks held in trust, less fees and expenses of the trust. Of course, little if any dividend distributions can be expected on certain stock portfolios, based on the dividend history of the underlying stocks.

Where can I find Exchange Traded Funds listed in the newspaper?
You can find ETFs listed in the financial section of many newspapers under the market that it is listed.

What are the trading hours for Exchange Traded Funds?
Exchange Traded Funds based on broad based indexes trade until 4:15 p.m., Eastern Time. Select Sector SPDR Funds trade until 4:00 p.m. Eastern Time. iShares Sector Funds trade until 4:15 p.m. Eastern Time. Exchange Traded Funds based on foreign stock indexes trade until 4:00 p.m., Eastern Time. HOLDRS, which are depository receipts, trade until 4:00 p.m., Eastern Time.