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Funds That Track Indexes and Sectors

Here's the skinny on exchange-traded funds.

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This story appears in the August 2004 issue of Entrepreneur. Subscribe »

Turned off by but like the idea of investing in a packaged product that's designed to track an index or sector? Consider exchange-traded funds, or ETFs.

ETFs are like an index fund and closed-end fund combo. Each represents a basket of various indices-from ones that track the S&P 500 to international and sector indices-and as stocks do, all day long.

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