There has been a rapid proliferation of ETFs. They come in all sorts of flavors to track specific niches. While it is clear what the large ETF index funds contain it is not always so with some of the new ones.
For example, I know that a S&P 500 Spyder has all 500 of the S&P stocks in the trust the shares trade against. But if someone sells me a sector index fund I can't be so sure. Because there isn't a universally agreed list of what companies comprise which sectors, you may get 20 companies in one sector ETF while another ETF in the same sector only has 8.
That is one more reason why it is important to read the prospectus for any ETF you buy. You need to know what the trust holds and how much it really diversifies your portfolio. Don't be surprised, do your homework.
