Foreword

Introduction

Section 1: Understanding ETFs

Chapter 1: What Is an Exchange Traded Fund?

Chapter 2: History of ETFs

Mutual Funds

Investment Act of 1940

Black Monday, October 19, 1987

First U.S. ETF

Chapter 3: Creation of an ETF

Defining Objectives and Licensing an Index

Authorized Participants

Fund Management

Regulating the Price: Arbitrage

Chapter 4: Anatomy of an ETF

UITs: SPDRs S&P 500 Trust

Regulated Investment Companies: RICs

Vanguard ETFs (VIPERs)

Exchange Traded Notes (ETNs)

HOLDRs: Exchange Traded Grantor Trusts

Investment Trusts: StreetTRACKS Gold Trust

Chapter 5: What Are the Advantages of ETFs?

Diversification

Transparency

Lower Fees and Commissions

Tax Efficiency

Ease of Purchase

Investor Strategies

Chapter 6: ETFs and Mutual Funds

Management

ETFs Trade on the Stock Exchanges

Calculation of Net Asset Value (NAV)

Settlement Period

Trading Symbols

Disadvantages of Investing in Mutual Funds

Are ETFs for Me?

Chapter 7: The Indexes

Difference Between an Index and a Fund

Two Different Animals: Market Indexes and Custom Indexes

Weighting

What Makes a Good Index?

Chapter 8: The ETFs

Broad U.S. Equity and Style ETFs

Industry-Sector ETFs

Nature and Risk of Bonds

Fixed-Income Indexes

Bond ETFs

Adding Bonds to Your Portfolio with ETFs

Treasury Bond ETFs

Municipal Bond ETFs

Corporate Bonds

Composite Fixed-Income ETFs

Preferred Stock ETFs

TIPS ETFs

Themed ETFs

Actively Managed ETFs

Commodity and Currency ETFs

Real Estate Investment Trusts (REITs)

Chapter 9: International Investing: Global Equity ETFs

Why Should You Include International ETFs in Your Portfolio?

Disadvantages of International ETFs

What You Should Know About International ETFs

Adding International ETFs to Your Portfolio

Chapter 10: Doing the Research

Where to Look for Information

Understanding the Data

Section 2: Investing with ETFs

Chapter 11: Choosing Your Investment Strategy

What Type of Investor Are You?

Buy and Hold: The Most Successful Investment Strategy

Chapter 12: Building Your Buy-and-Hold Portfolio

Modern Portfolio Theory

Managing Risk

Determining Your Asset Allocations

Protecting Your Portfolio

Chapter 13: Managing Your ETF Portfolio

Adding ETFs to an Existing Portfolio

Chapter 14: Rebalancing Your Portfolio

How Often Should a Portfolio Be Rebalanced?

Chapter 15: Investing for Retirement

Taking Responsibility

After Retirement

Life-Cycle Portfolios

Chapter 16: Active Investing with ETFs

Buy and Sell Orders

Selling Short

Position Management

Capital Leverage

ETF Futures Contracts

Forecasting the Markets

Sector Rotation

Options

Pairs Trading and Market-Neutral Strategies

Chapter 17: Special Uses of ETFs

Fleshing Out a Portfolio

Hedging Against Possible Losses

Currency Hedging

Tax-Loss Harvesting

Chapter 18: What Does the Future Hold for ETFs?

Frequently Asked Questions

Top Ten Mistakes Made by Beginners

Appendices

Appendix A: Where to Find Information on Indian ETFs

Appendix B: Glossary

Bibliography