• Exchange traded funds (ETFs) are versatile trading vehicles that satisfy a diverse range of investing methods with different risk tolerances. They may be utilized to conservatively generate the same returns as the overall stock market. But these funds are also aggressive instruments for active traders to capitalize on quick, sharp moves in a particular sector, lasting only hours or days. The popularity of ETFs continues to grow as more investors replace traditional stock portfolios with investments strongly weighted by these funds. Because the sources of these funds are so widely varied, fund lists are designated by asset class and trading incentive, and by the different organizations supporting the funds.
  
  

SPDRs

• Among the most popular of all ETFs are the sector-specific funds associated with the S&P 500 index. These "Select Sector SPDRs" (often pronounced as "spiders") are widely watched stock market levels in their own right. The SPY, for example, follows the overall S&P 500 index, and investors who hold this fund will generate identical returns of the general stock market. But other isolated sectors in this list allow investors to track a specific industry. Each fund is comprised of all the S&P 500 stocks in that sector. The XLF was one of the most actively traded investment vehicles during the stock market collapse of 2008 and 2009, as its holdings are exclusively financial institutions and banks. Individuals who buy into the XLF are banking on a rise in the stock values of the overall financial sector. However, many shorted this fund to profit significantly from the bankruptcies and general fear of the banking industry that dominated the end of the 2000s. Similarly, the XLE fund often profits from a rise in oil prices, as these companies are part of the energy sector and often succeed when oil prices are high. There are nine Select Sector funds in total, and they are the most reliable vehicles for exposure to the overall stock market or its largest segments. They are: XLY, XLP, XLE, XLF, XLV, XLI, XLB, XLK and XLU. The SPY, while not formally a part of this group, is usually referred to as a "spider" as well, and is often included in this category of ETFs.
  
  

Leveraged ETFs

• While ETFs play an important role for long-term investors looking for exposure to various segments of the stock market, a more specialized and risky set of these funds are utilized by day traders to gain strong leverage over smaller, quicker moves. These leveraged ETFs ofter returns up to three times that of the underlying sector or stock grouping. Since their inception at the end of the 2000s, most of these funds have become the tools of choice for professional financial traders around the world, due to their simplicity and profit potential. But with their potential reward comes excessive risk. The list of ProShares ETFs is long, and encompasses nearly any trading strategy desired. The SKF fund, for example, is a double-inverse fund for the financial sector. When the financial industry loses 1 percent of its value, the SKF gains 2 percent. These funds allows active traders to substantially profit from up or down moves in the stock market of any sector.
  
  

Global Economies

• The availability of ETFs is constantly improving, with many companies offering new ETFs for tracking nearly any aspect of the global equities markets. An extensive array of these funds are available to gain quick, easy exposure to stock markets of other countries. The iShares ETFs are designed to allow anyone to participate in the success of developing countries and other economies. The EZA, for example, offers the same returns as the stock market of South Africa for investors looking to capitalize on any success enjoyed by that country.