If you were watching CNBC before the open this morning, you probably noticed that most of the stocks streaming along the bottom of the screen were Exchange Traded Funds, ETFs. Yes, ETFs. They have become very big players in today's market and can be very important to your wealth.

I first wrote about ETFs on September 8, 2000. In that essay, I gave a brief explanation of what ETFs are and described how to find them in the VectorVest database. Finding them was pretty easy to do since we had put all 66 of them into an Industry Group called, "Market(Baskets)." As the number of ETFs in our database grew, we changed the name of the group to Market(ETFs). Last week, I reported that we had split the Market(ETFs) group, which had grown to over 650 stocks, into two new Industry Groups: Market(ETFs - Long) and Market(ETFs - Short). Wow, this move showed that Market(ETFs - Short) was the hottest Industry Group in the database!

Now we have taken the major step of creating a Business Sector called ETFs and we are classifying the ETFs in the Market(ETFs - Long) Industry Group into seven new Industry Groups, called: ETFs(Commodities), ETFs(Currency), ETFs(Fixed Income), ETFs(Foreign), ETFs(Sector), ETFs(Specialty) and ETFs(United States). We're still completing this process, so some ETFs still remain in the Market(ETFs - Long) group. Of course, we renamed the Market(ETFs - Short) group to ETFs(Short).

The primary guide we are using to make these classifications is a book called, "The ETF Book: All You Need to Know About Exchange Traded Funds," by Richard A. Ferri, published by Wiley. Mr. Ferri provides much more detailed classifications than we have chosen to use. I believe these new classifications will give you the information you need to make better decisions without fragmenting them too much.

Take a look at what we have done. Click on Viewers on the Main Menu Bar, click on Industry Groups and bingo, there's ETFs(short) at the top of the list, followed by ETFs(Commodities) just below it. Note that the CI, Comfort Index, rating for the ETFs(Short) group is 0.89 and that of ETFs(Commodities) is 1.53. This means that the ETFs(Short) group is quite volatile and while ETFs(Commodities) has been very stable. Both groups have been big winners lately. Look at their graphs, and you'll see what I mean. It was impossible to get this kind of information prior to creating the new ETF Classifications.