The financial and investing worlds both suffer from a number of similar problems including the one that drives the non-professional investor nutty, I suspect. I’m not talking about intricate trading strategies and complex instruments but rather all the acronyms.

There’s “PE” (price to earnings), “EBITDA” (earnings before interest, tax, depreciation and amortization), “DCF” (discounted cash flow), “WIP” (work in process) and a host of others, including “ETF” or exchange-traded fund. It is that last one, ETF, that has grown tremendously in not only product offering but in acceptance over the last several years and it appears that trend will continue.

While ETFs have been available in the U.S. since 1993 and in Europe since 1999, in May 2008 there were 680 ETFs in the U.S. with $610 billion in assets, an increase of $125 billion over the previous year per the Investment Company Institute. In the same month, a survey conducted by State Street Research and Wharton underscored how ETFs are changing the investment industry. Per the study, 67 percent of surveyed investment professionals called ETFs the most innovative investment vehicle of the last two decades, and 60 percent of these investment professionals shared that ETFs have fundamentally changed the way they construct investment portfolios. Needless to say, ETFs are worth paying attention to.

Full Story:  http://washingtontimes.com/news/2009/apr/24/etfs-a-unique-investment-plan/

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