ETF's represent shares of ownership in either fund or unit investment trusts that hold portfolios of common stocks which are designed to generally correspond to the price and yield performance of their underlying portfolios of securities, whether broad market, sector, or international. ETF's give investors the opportunity to buy or sell an entire portfolio of stocks in a single security, as easily as buying or selling a share of stock. They offer a wide range of investment opportunities.

Where can I buy or sell ETF's?

You can buy or sell ETF's through a broker of your choice, just as you buy stock.

How easily can I buy or sell ETF's?

As easily as you can buy or sell shares of stock. ETF's are listed and traded on The American Stock Exchange, which makes it easy for you to buy or sell shares throughout the trading day, while traditional index mutual funds can generally be purchased or redeemed only at an end-of-day closing price.

What is the minimum purchase?

You can purchase as little as one share.

Why invest in an index?

Indexing, often called "passive management," involves investing in a group of stocks that represent the composition of a broad-market, sector, or international index. Index funds offer "market-level performance"; they aim to generally match the market performance of a specific index in advancing or declining markets. Passive indexed investments, because they generally have lower management and expense fees, may outperform many actively managed funds over the long term.

What are the benefits of trading ETF's as stocks?

Listing on the Amex offers several advantages to ETF investors:

• buying and selling at any time during the trading day,
• having instant exposure to a portfolio of stocks of your choice,
• the ability to buy on margin (see below for details),
• no sales loads, although brokerage commissions will apply,
• no high management or sponsor fees,
• tax efficiencies.

ETF products are designed to provide investment results that generally correspond to the price and yield performance of their underlying portfolios of securities. One market mechanism that helps to keep an ETF trading at a price close to the value of its underlying portfolio is arbitrage. Because ETF's are created from the stocks of an underlying portfolio and can be redeemed into the stocks of an underlying portfolio on any day, arbitrage traders may move to profit from any price discrepancies between the ETF's and the portfolio, which in turn helps to close the price gap between the two. (ETF creations and redemptions are restricted to large transactions in multiples ranging from 25,000 to 600,000 ETF's, usually carried out by institutional investors.) Of course, because of the forces of supply and demand and other market factors, there may be times when an ETF trades at a premium or discount to its fair value.

Can ETF's be sold short?

Yes. All ETF's may be sold short, representing the sale of "borrowed" shares in anticipation of lower prices when the borrowed shares must be replaced. Certain ETF products are also exempt from the rule that requires shares to be sold short only on an "uptick" (i.e., a last sale price higher than that of a security's preceding last sale). Investors are required to make arrangements to borrow securities before selling short.

Can ETF's be purchased on margin?

ETF's may be purchased on margin, generally subject to the same terms that apply to common stocks. You should contact your broker regarding initial and maintenance margin requirements.

Is there a sales load on ETF's?

While ETF's are not subject to sales loads, ordinary brokerage commissions for purchases and sales will apply.

Do I get paid dividends and/or capital gains?

ETF holders are eligible to receive their portion of dividends, if any, accumulated on the stocks held in trust, less fees and expenses of the trust. Of course, little if any dividend distribution can be expected on certain stock portfolios, based on past performance of the stocks.

Is the value of an ETF equivalent to 100% of the value of the underlying index?

Not necessarily. The share price of many ETF's is set at a percentage of the index upon which they are based. The chart below illustrates the relationship between the price of an ETF and the level of the underlying index. As an example, if the NASDAQ-100 lndex were at 4200, then the share price of the NASDAQ-100 Index Tracking Stock (QQQ), at approximately 1/40th of the value of the index, would be approximately $105 per share.

ETF Product	Approximate relationship to underlying index
QQQ (NASDAQ-100 Index Tracking Stock)	1/40
SDPRS (Standard & Poor's Depositary Receipts)	1/10
MidCap SPDRS (Standard & Poor's MidCap 400 Depositary Receipts)	1/5
Select Sector SPDR (Select Sector SPDR Funds)	1/10
DIAMONDS (The Dow Industrials)	1/100
iShares - Barclays Global Investors	Varies
streetTRACKS - SSgA	Varies
FORTUNE 500 Index Tracking Stock	1/10
FORTUNE e-50 Index Tracking Stock	1/10

Where do ETF's initially come from?

ETF's are "created" by large investors and institutions in block-sized units of shares (or multiples thereof) known as "Creation Units" of a respective ETF. A creation requires a deposit with the trustee of a specified number of shares of a portfolio of stocks closely approximating the composition of a specific index and cash equal to accumulated dividends in return for specific index shares. Similarly, block-sized units of ETF's can be redeemed in return for a portfolio of stocks approximating the index and a specified amount of cash. A unit of 50,000 shares (or multiples thereof) is required to create SDPRS, NASDAQ-100 Index Tracking Stock, Select Sector Funds, and DIAMONDS, while a unit of 25,000 shares is required to create MidCap SPDRS.

Where can I get up-to-date price information?

The pricing of ETF's is continuous on the Amex during normal trading hours. Investors can obtain this information from their broker, from stock quotation systems, or on a delayed basis from the Amex's web site at www.amex.com. The closing prices are also published in major newspapers on the following business day.