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Tickers in this Article: SOXL, ERX, XIV, DIG
The first exchange-traded fund (ETF) came onto the American financial markets in 1993 when State Street Global launched the SPDR S&P 500 (NYSE:SPY). With an average volume of over 200 million shares traded, this original ETF is still the most popular ETF traded today - but that doesn't mean it gives the best returns. (For related reading, see Introduction To Exchange-Traded Funds.)

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One of the biggest advantages of ETFs is that an investor can create a diversified portfolio with a handful of different ETFs to cover the entire stock and fixed income market. Likewise, for investors who already have a sizable portfolio of individual stocks, more specialized ETFs can be a great way to augment holdings and provide entry into a wide variety of sector, commodity, small-cap and emerging markets.
Buying an ETF to represent an entire sector of the stock market can also be a great idea to ride out a bullish trend on a specific sector.

Sound appealing? Check out some of this year's hottest ETFs.

Company
YTD % Gain
Direxion Daily Semiconductor Bull 3x Shares (NYSE:SOXL)
+38.21%
Direxion Daily Energy Bull 3x Shares (NYSE:ERX) +29.85%
Daily Inverse VIX Short Term ETN (NYSE:XIV) +27.45%
ProShares Ultra Oil & Gas (NYSE:DIG) +20.15%


Bottom Line
If you're looking to add a new twist to your portfolio, dive into some additional research on these leading products.

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