Barclays launched 10 new ETFs targetting various industries and trading on the NYSE. As with all ETFs, the expense ratio is a miniscule .48%, which is generally 50-80% lower than most mutual fund expense ratios. The new ETFs, which began trading 5/5/2006, are as follows: iShares Dow Jones U.S. Oil & Gas Exploration & Production (ticker symbol IEO), iShares Dow Jones U.S. Oil Equipment & Services (IEZ), iShares Dow Jones U.S. Pharmaceuticals (IHE), iShares Dow Jones U.S. Healthcare Providers (IHF), iShares Dow Jones U.S. Medical Devices (IHI). Most of these new funds cover the healthcare and oil industries, but a few more listed below also tackle Defense and Home Construction.
More new funds: iShares Dow Jones U.S. Broker-Dealers (IAI), iShares Dow Jones U.S. Insurance (IAK), iShares Dow Jones U.S. Regional Banks (IAT), iShares Dow Jones U.S. Aerospace & Defense (ITA), and iShares Dow Jones U.S. Home Construction (ITB). All these Barclay ETFs can be purchased through a traditional broker or online brokerage, like T Rowe Price, Scwab, Fidelity, etc. Just use the provided ticker symbol. These new funds join an existing universe of ETFs that now number in the hundreds, including existing ETFs that cover many of these market segments already. Barclays themselves now run over 110 ETF funds. And like all ETFs, these funds can be traded throughout the day instead of just at close like mutual funds, allowing you to enter or exit a position at any time the market is open.
ETF stands for Exchange Traded Fund. ETFs are a recent innovation in the world of investing. ETFs are a special kind of security that grants you ownership over a collection of individual stock certificates. ETFs are approved by the SEC and are then available to the public as investing vehicles. How do ETFs work? Why are they better than mutual funds? A mutual fund is simply a pool of money that the fund manager then invests in stocks, bonds, or other securities. The fund manager makes the decisions, based upon the goals of the fund (ie, what kind of sectors it can invest it, how much it can hold in cash, how much it can invest internationally, etc.). The fund managers buy and sell different positions throughout the year, while their actual holdings are only published quarterly (otherwise anyone could "copy" the investment choices of some hot manager). This means that at any given time, you (as an investor) really have no idea what makes up the portfolio of the fund - what companies it is investing in, and how much it holds of each. Out of all the current ETFs, almost 90 track indexes, 70 track industry sectors, and 50 track foreign companies.
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