ETFs are an increasingly popular way to invest

Closeup of stock certificate

Exchange-traded funds have a lot in common with mutual funds, but trade like an individual stock.

Each holds a basket of stocks that track a particular sector or index. The first and largest exchange-traded fund, SPDR, mirrors the Standards & Poor's 500 Index.

Other popular ETFs include Qubes, ticker "QQQQ," which reflects the Nasdaq 100 Index and DIAMONDS, which tracks the Dow Jones Industrial Average.

But investment advisers say ETFs have lower costs and don't pile up capital gains liabilities like some mutual funds.

That's why the Investment Co. Institute says the combined assets of ETFs reached $444.3 billion in March, up from $321.3 billion a year ago and just $88.2 billion five years ago.

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