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Byline: NANCY GONDO
Say you want to own a lot of stocks, but don't have time to carefully track each of them. And you know the costs for multiple trades can add up quickly.
In the past, your best bet likely was a mutual fund.
Now, thanks to the emergence of exchange-traded funds in recent years, a whole new playing field has opened up for investors.
"I think for the do-it-yourself investors who aren't necessarily stock jockeys, it's been a blessing," said Dave Fry, founder and publisher of ETF Digest (etfdigest.com). "This is like an instrument that's tailor-made for them."
Many ETFs track an index, giving people access to a big basket of stocks. For instance, the Standard & Poor's Depository Receipts are based on the S&P 500 indexes, the Diamond Trust on the Dow Jones industrials, and the QQQQ on the Nasdaq 100.
That's not all. The ETF universe has been rapidly growing to include bonds, gold and even funds that track other countries' indexes.