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Merrill Files to Launch Software HOLDRs

The latest 20-stock sector basket includes Oracle and Microsoft.

Merrill Lynch continues to build its line of



Up next: software.

Merrill Lynch has filed to launch a new HOLDRs basket that will include stocks such as


(ORCL) - Get Oracle Corporation Report


Veritas Software

(VRTS) - Get Virtus Investment Partners, Inc. Report



(MSFT) - Get Microsoft Corporation (MSFT) Report


Similar to most of the existing HOLDRs, this basket will contain 20 of the largest stocks from one sector. The portfolio will trade on the

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American Stock Exchange

, which means you will be able to buy shares anytime during the trading day.

You'll already find 11 sector-specific HOLDRs, investing in industries from the Internet and semiconductors to regional banks and utilities. (A list of all the existing baskets can be found on the HOLDRs Web site at

Merrill also recently launched the

Market 2000+ HOLDRs


, which consists of the 50 largest stocks from around the globe.

The HOLDRs portfolios are fixed. They don't have managers to decide which stocks to buy and which stocks to dump. If a stock in one of these baskets disappears due to an acquisition, a new one will not be added to take its place.

The Software HOLDRs will start trading in the coming weeks under the ticker symbol SWH.

Like the other HOLDRs, you will only be able to buy and sell this basket in 100-share increments, called round lots. That requirement will put the minimum purchase at around $10,000.

In the upcoming software basket, the maximum weighting for any one stock is set at 10%. Once the basket starts trading, however, that cap doesn't stay in place. One stock can command far more than 10% of the portfolio if it experiences a sharp surge in price.

You should note that if you buy these HOLDRs shares before they start trading, you'll pay a 2% underwriting fee. If you wait until trading begins, you can go to a discount broker and pay less in commission.

For more information about how the HOLDRs work, you can read

Everything You Ever Wanted to Know About HOLDRs. You will also find recent performance information in

a story from earlier this week.