Exchange Traded Funds (ETFs) Glossary

Category: By Investment Style

Some of the types of ETFs:

Balanced funds - Funds that invest in both stocks and bonds in substantial amounts.

Closet index fund - An active fund with higher fees that actually tracks an index fairly closely.

Exchange-traded fund (ETF) - An index fund which is traded on the stock market.

Index fund - An index fund is a mutual fund that mirrors as closely as possible the performance of a stock market index. For example, many mutual fund companies have since established S&P 500 index funds to mirror that index by purchasing all 500 stocks in the same percentages as the index.

REIT - Real Estate Investment Trust, a type of mutual fund that owns portfolios of commercial real estate. There are indexes for this asset class, and REIT ETFs follow these indexes.

Grantor Trust - ETF that at creation follows an index but remains static and does not attempt to track it. HOLDRs are main adherents to this form of ETF.

Unit Investment Trust
Common type of ETF that requires exact duplication of index and prohibits derivatives in operation. Like Management Investment Trusts. Examples include SPDRs and QQQs.

ETFs within the "By Investment Style" category (including subcategories):