A:

iShares, VIPERs and spiders each represent different exchange-traded fund (ETF) families. In other words, an individual company offers a range of ETF types under one product line. Because these ETF families are constructed and operated by different companies, you will find differences in terms of how they are made up and what indexes or sectors they cover.

Barclays Global Investors is the company behind the iShares family of ETFs, which offers ETFs that cover such things as the S&P 500 and the Morgan Stanley Capital International Japan Index. The company offers a wide selection of more than 25 funds, which cover a wide range of both U.S. and international sectors and indexes. Barclays is not restricted to equity-based tracking. In fact, it has ETFs that cover the bond market and even one that tracks the price of gold.

Vanguard's Vanguard Index Participation Receipts (VIPERs) are very similar to iShares in that they offer a wide range of ETF types covering several indexes and sectors in 20 different funds.

Spiders (SPDRs), however, differ from iShares and VIPERs because they cover a more specific area of the financial market. Currently, there are 10 spiders that cover the S&P 500, nine of which cover individual sectors of the index. This selection allows investors to place their money in an ETF that covers either the whole market or a specific segment of the market.

Therefore, the differences between spiders, VIPERs and iShares are primarily based on the companies behind these ETFs and which indexes and/or sectors they cover. But if you are looking for exposure to the S&P 500, for example, which is offered by more than one ETF company, look at the more specific attributes of the fund. The biggest thing to focus on in this case will be the fund's expense ratio (a lower expense ratio is generally more desirable), along with how well the ETF tracks the underlying index. See our Special Feature: Exchange-Traded Funds for everything you need to know about ETFs.

For more insight, see Introduction To Exchange-Traded Funds, How To Use ETFs In Your Portfolio and ETFs Vs Index Funds: Quantifying The Differences.

RELATED FAQS
  1. Is there an ETF composed of other ETFs?

  2. What exactly is an ETF portfolio?

    Learn what exchange-traded funds (ETFs) are and their advantages to investors, what a portfolio of ETFs is, and discover ... Read Answer >>
  3. Who's in charge of managing exchange-traded funds?

    An exchange-traded fund (ETF) is a security that tracks an index but has the flexibility of trading like a stock. Just like ... Read Answer >>
  4. What is a spider and why should I buy one?

    The term spider is the commonly-used expression to describe the the Standard & Poor's Depository Receipt (SPDR). This type ... Read Answer >>
  5. What are the most common ETFs that track the banking sector?

    Learn about common bank ETFs, and find out which ones focus on the international financial sector, big banks, regional banks ... Read Answer >>
  6. What's the difference between an index fund and an ETF?

    Learn about the difference between an index fund and an exchange-traded fund and how index fund investing compares to value ... Read Answer >>
Related Articles
  1. ETFs & Mutual Funds

    Exchange-Traded Funds: Background

    Compared to mutual funds, ETFs are relatively new. The first U.S. ETFs were created by State Street Global Advisors with the launch of the S&P 500 depositary receipts, also know as SPDRs ("spiders"). ...
  2. ETFs & Mutual Funds

    Introduction To Exchange-Traded Funds

    Get into ETFs and enjoy the benefits of a mutual fund with the flexibility of a stock.
  3. Financial Advisor

    Advising FAs: Explaining ETFs to a Client

    Exchange traded funds (ETFs) have exploded in popularity with both investors and professionals for several reasons, and their growth shows no sign of slowing.
  4. ETFs & Mutual Funds

    Exchange-Traded Funds: Equity ETFs

    The first ETF was developed to create diversified portfolios based on equity indexes. Because equities are a core asset class for investment portfolios, it is important for investors to understand ...
  5. ETFs & Mutual Funds

    The Advantages of ETFs Compared to Index Funds

    With the ongoing ETF boom, ETFs gain more variety and increased competition in the market leads to further investors' advantages compared to index funds.
  6. ETFs & Mutual Funds

    Exchange-Traded Funds (ETFs)

    This vehicle combines the diversification of a mutual fund with the flexibility of a stock. Learn more about them here.
  7. ETFs & Mutual Funds

    Exchange-Traded Funds: Introduction

    Exchange-traded funds (ETFs) can be a valuable component for any investor's portfolio, from the most sophisticated institutional money managers to a novice investor who is just getting started. ...
  8. ETFs & Mutual Funds

    A Look at Blackrock's iShares ETFs

    An Overview of Blackrock iShares ETFs and what makes them unique.
  9. ETFs & Mutual Funds

    How To Pick The Best ETF

    Of the hundreds of exchange-traded funds on the market, some are bound to fail. Learn how to pick the best of the bunch.
  10. Trading

    The Benefits Of ETF Investing

    Exchange-traded funds provide unique opportunities for investors. Find out how.
RELATED TERMS
  1. ETF Of ETFs

    An exchange-traded fund (ETF) that tracks other ETFs rather than ...
  2. Vanguard Exchange-Traded Funds

    A class of ETFs offered by Vanguard and traded like any other ...
  3. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  4. Index ETF

    Exchange-traded funds that follow a specific benchmark index ...
  5. Spiders - SPDR

    A short form of Standard & Poor's depositary receipt, an exchange-traded ...
  6. Inverse ETF

    An exchange-traded fund (ETF) that is constructed by using various ...
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center