Types of Exchange Traded Funds : NobleTrading Blog

Exchange Traded Funds (ETFs) themselves has great variety and diversity. They can be classified on many basis such as index they following, their management, asset allocation, etc. Here are some popular ETF types.

Broad Index ETFs – These are the most diversified ETFs with respect to their composition. Examples include ETFs tracking S&P 500, NYSE, AMEX, etc. One can also find broad index ETFs which track international indexes like Japan Nikkie. Symbols include SPY, DIA and QQQQ.
Market sector ETFs – These are ETFs tracking specific market sectors like finance, technology, industrial, etc. They are less diversified compared to broad index ETFs but are also very liquid. Symbols begin with AX.
Business sector ETFs – These ETFs track specific segments like biotechnology, medical services, utilities, semiconductors, etc. They are less liquid than market sector ETFs.
International Regional ETFs – These are ETFs which track indexes of specific regions like Asian, European and Latin American markets. There are also ETFs which has mix of regions like Asian-European mix ETFs and Emerging market ETFs.
Country specific ETFs – These are ETFs having a portfolio comprised of large cap stocks of a stock market of a specific country; often a developed or emerging country like Canada, China, Brazil or India.
Commodity Specific ETFs – These are ETFs which track either specific commodities or stock of companies related to a commodity. Some popular examples are gold ETFs, grain ETFs, and financial commodity ETFs.
Currency specific ETFs – These are ETFs which track one or more currencies or track the price differences of currency pairs. Example include ETFs which track G8 currencies. Currency ETFs tend to be more liquid than stock ETFs.
Smart of Leveraged ETFs – These are ETFs which implement some sophisticated trading strategies to magnify the returns from the market. They tend to be more risky and costly than traditional ETFs.
Bond ETFs – These are ETFs which track fixed-income securities like treasury and corporate bonds. They tend to be of 'low-risk low-return' nature.
Entire World ETFs – These are ETFs which track most of the world markets. Vanguard Total Market Index Viper is a good example.