One of the newest ways to invest is the exchange traded fund. At over 400 and rising, the number of new funds each year is testament to investor interest. As ETFs extend from stocks to other markets, gold and oil for instance, so has the list grown for exchange traded fund research and ETF reference materials.

An exchange traded fund, like a mutual fund, is a basket of stocks or other underlying assets, presumably cutting the risk of owning just one or a few. Unlike a mutual fund, an ETF is bought and sold several times. Its worth is set by the value of the underlying stocks and by supply and demand for the ETF itself. ETFs can be more tax friendly than mutual funds; though both are subject to capital gains, mutual funds may face redemptions by large investors and so, are more likely to trigger capital gains penalties. Investors, no matter how seasoned, are wise to tap an exchange traded funds guide before jumping. Key features of ETF reference materials and ETF research to consider:

1. Risk, suitability, fees and tax implications.

2. Breaking news and market developments that impact performance.

3. Fund firms analysis and recommendations from exchange traded fund research.

Action Steps
The best contacts and resources to help you get it done

Learn ETF fundamentals before you leap

Because all investments carry risk and reward, there's a learning curve for those who want to invest by themselves or keep close tabs on the decisions of their money manager or adviser. ETFs are no exception. Though many of the same fundamentals that apply to stock investing apply here, there are differences. ETFs are bought and sold during the trading day unlike mutual funds, whose performance is only marked at the close of the trading day. Investors will be subject to fees for those transactions.

I recommend: An informative read for a beginner is Gary L. Gastineau's ETF guide titled The Exchange-Traded Funds Manual. Yahoo Finance has a page dedicated to ETF investing education and ETF reference materials. The Investment Company Institute, a pro-consumer industry watchdog, offers a downloadable Exchange Traded Funds guide. A site appropriately called ETF Guide is a news and commentary library.

Use ETF newsletters to track the impact of economic news

Intraday and real-time exchange traded funds information has been on the rise in recent years as more of the top business newspapers, magazines and web sites dedicate reporters and analysts to covering these investments. Several specific ETF newsletters are in circulation as well. Investors can choose how often and how closely they wish to follow breaking news and analysis impacting their ETF investment. There are several free-of-charge web sites that offer news at only a slight time delay. Subscription publications and web sites typically offer more in-depth discussion of world events that impact ETFs and some make investment recommendations.

I recommend: The CNN Money web site offers ETF information, such as how to get started investing in this area, as well as breaking news provided by CNN and longer in-depth feature articles from Forbes and Money magazines. Noted newsletter-tracker Mark Hulbert includes some ETF-dedicated coverage in the stable of newsletters linked on MarketWatch.

Check exchange traded fund research from brokers

Launched in 1993 with the inaugural Standard & Poor's Deposit Receipt, known as the SPDR or 'Spider,' ETFs gave investors the opportunity to take a stake in the broad S&P Index of stocks without actually buying an index fund. For individual investors, smaller pieces of the pie were now available. Many household-name mutual fund firms have tapped the ETF markets and these companies are a good place to start. Because of intraday trading, investors will have to use a broker and pay commissions to carry out those transactions. Still, some of the appeal of ETFs, compared to other types of funds, is relatively low operating and transaction costs. That's because ETFs track one index not individual stocks, cutting down on the costly administrative work for each transaction. Costs do depend on how often an individual is trading.

I recommend: The iShares division of Barclays Global Investors and State Street Global Advisors are two shops with established reputations in exchange traded funds and exchange traded fund research. Having satisfied a quest for ETF research, self-directed trading sites such as ING's ShareBuilder lets individuals buy into ETFs. E-Trade includes a tool allowing the user to compare ETF and mutual fund expenses.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  As with any investment, weigh the risk and reward and match the best instrument to personal investing goals.