Paul Tracy
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There are about a thousand of them listed on the U.S. exchanges.

They track everything from the S&P 500... to gold... to Treasury bonds... and much more.

They are basically nothing more than portfolios of stocks, bonds or commodities that trade on the major exchanges as a single security. But underneath a placid exterior, one of America's fastest-growing asset classes just reached a key milestone: Total assets invested in U.S. exchange-traded funds (ETFs) surpassed $1 trillion for the first time.
 
This represents the culmination of a remarkable episode of growth. The first U.S.-traded ETF was launched on Jan. 29, 1993 -- so it took fewer than 19 years for the ETF industry to crack the $1 trillion barrier.

To put that in perspective, it took the mutual-fund industry (first launched in 1924) 66 years to surpass $1 trillion in assets.

Assets invested in ETFs have grown at a 31% annualized pace since 2000 -- compared with just 6% annual growth for mutual funds. And alongside the growth of ETFs is the growth in closed-end funds (CEFs).

The differences between CEFs and ETFs are small -- both allow you to buy into a basket of securities with one simple transaction. And you can buy them throughout the day, just like a stock.

Yet many investors don't realize just how powerful a tool ETFs and CEFs can be for income investors.

Let me give you an example. I've told you several times about the abundance of high-yielding stocks around the world (at last count, we found 412 companies based outside the U.S. paying more than 12%).

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