Mutual Funds Join the ETF Wave

Another fund also aimed at retail investors is ( FLAGX Quote)Flex-funds Aggressive Growth , which invests about 90% in ETFs of various styles, sectors and market capitalizations on the basis of their relative strength to that of the overall stock market. The fund, which has been around since 2000, has about $21 million in assets.

There are also several funds that are structured as target-date funds and are designed for inclusion in 401(k) plans. Target-date funds, which have surged in popularity in recent years, adjust asset allocations from more aggressive to more conservative as the investor approaches retirement.

Seligman offers a variety of these funds: ( STJAX Quote)Seligman TargETFund 2015 , which has $31 million in assets, ( STKAX Quote)Seligman TargETFund 2025 , which has $25 million, and ( SHVAX Quote)Seligman TargETFund Core , which has $60 million.

Federated Investors has three target-date funds of ETFs, which it launched in April: ( FTOAX Quote)Federated Target ETF 2015, which has $1 million in assets, and ( FTWAX Quote)Federated Target ETF 2025 and ( FTHAX Quote)Federated Target ETF 2035 , which have assets of $2 million each.

There are also a few companies that have target-date mutual funds of ETFs in registration, including AIM Investments, a unit of Amvescap PLC, and XTF Advisors. AIM has registered six mutual funds that will invest in PowerShares ETFs. XTF Advisors has four target-date mutual funds of ETFs.