Exchange-traded fund offerings have mushroomed over the past few years, with assets under management topping $1 trillion in late 2010. It's not hard to understand why: low fees, more transparency, and better tax efficiency have drawn investors to ETFs in droves.
But, with more than 1,000 ETFs traded in the United States covering just about every nook and cranny of the market, it can be a monumental task to sift through them all and determine which funds best fit your goals. How do you choose between the Vanguard Emerging Markets ETF and the SPDR S&P Emerging Markets ETF, for example? Sure, you can get information directly from the individual providers, but a handful of web sites can also help you wade through the vast amount of data and compare funds.
Here are three sites to help you navigate the ETF world and find the right funds for you:
IndexUniverse (www.indexuniverse.com). With a range of tools for both new and experienced investors, Index Universe provides comprehensive coverage of the ETF world. For the novice, an education section explains the basics—how ETFs work, where they fit into a portfolio, and how to evaluate and trade them. If you're ready to dig in, a quick search on the site allows you to compare ETFs within a particular asset class. A search for a broad market fund, for example, turns up 20 offerings from providers that include Schwab, Vanguard, and iShares. You can then sort by specifics such as expenses, return, and standard deviation (a measure of volatility). Once you've whittled the list down, you can view each fund's holdings, assets, and country and sector breakdowns. Searches can be saved. The site also overs a wide range of ETF news and commentary.
ETF Channel (www.etfchannel.com). This site targets both retail investors and investment professionals. One of its basic features allows users to enter an ETF symbol to find out what stocks or other securities the fund holds. Alternately, investors can type in a stock ticker to see which ETFs hold that particular stock. So if an investor is interested in a handful of companies but doesn't want to buy each stock individually, this tool can potentially locate an ETF that holds a basket of them.
Looking for, say, a faith-based fund or one that invests in Russia? The site's ETF Finder will produce a list of ETFs that focus on a particular industry, country, or segment of the market. Users can also review top-ranked ETFs, calculated by the weighted average broker recommendation of their underlying stock holdings, and view "unloved ETFs," those with the smallest dollar amounts traded within the past 30 days. The site's tools and features are free, but users must register.
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Morningstar (www.morningstar.com). It's best known for mutual funds, but Morningstar has expanded its coverage to include ETFs in recent years. Aside from stories and a broad collection of education-related articles, the site offers a screener that can filter funds by basic fundamentals, such as performance, as well as metrics like valuation, liquidity, portfolio style, and index correlation. Users can click on specific funds to find more detailed information on performance, holdings, and risk, as well as brief snippets of analyst reports. The site also offers pre-sorted screens on the most heavily traded ETFs, top performers, and lowest price to fair value ratio. "Premium" members who pay a subscription fee can gain access to the entire site, which includes full analyst reports on certain mutual funds and ETFs.