Finding ETF Indices

Despite all the hype over exchange-traded funds, it's important for investors to remember that there is no such thing as a "good" or "bad" ETF. It's really the index behind it that matters.

ETFs are index funds that trade continuously during market hours like stocks, thereby allowing investors to lock in a price at any moment. There are now nearly 250 ETFs with a total market value of $350 billion.

Many analysts believe that the ETF explosion is still in its early stages, as the number of new offerings keeps growing. So far this year, there have been roughly two ETFs launched per week. These newest funds not only track assorted stock indices, but also commodities like silver through the iShares Silver Trust(SLV Quote) and oil via the U.S. Oil Fund (USO Quote).

Providers looking to enter the ETF arena now face the hurdle of finding worthwhile indices to track given that the highly recognizable names have been taken. And from an investor's perspective in this crowded landscape, the question becomes, how does one differentiate between ETFs tracking similar indices? ...