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Exchange-traded funds are a good idea gone crazy.

There are more than 360 ETFs listed on the Toronto Stock Exchange. Three to six are all you need for a nicely diversified portfolio.

Recognizing that investors need help finding the right ETFs for their portfolios, we're creating The Globe and Mail ETF Buyer's Guide. In this first instalment, we look at 18 different ETFs offering core exposure to the Canadian stock market. Coming in the months ahead: Canadian dividend and bond ETFs, U.S. equity and dividend ETFs and international ETFs. Let me know if you want any other categories covered by sending me an e-mail at rcarrick@globeandmail.com.

ETFs are a low-fee version of mutual funds that trade like a stock. Traditionally, ETFs tracked major stock and bond indexes; today, many funds follow more obscure indexes or have a manager who picks stocks. To invest in ETFs, you need a brokerage account. For help on that, consult my latest ranking of online brokers, coming Nov. 19.

Here are some explanation of the terms you'll find in this ETF Buyer's Guide:

Assets: Shown to give you a sense of how interested other investors are in a fund; the smallest funds may be candidates for delisting.

Management expense ratio (MER): The main cost of owning an ETF; on an ongoing basis; as with virtually all funds, published returns are shown on an after-fee basis.

Trading expense ratio (TER): The cost of trading commissions racked up by the managers of an ETF as they shuffle the portfolio to keep it in line with a target index; add the TER to the MER for a fuller picture of a fund's cost. Note many ETFs do so little trading that their TERs round down to zero.

Dividend yield: Mainstream indexes can be a good source of dividend income.

Average daily trading volume: Trading of less than 10,000 shares per day on average tells you an ETF isn't generating much interest from investors.

Top three sector weightings: Most Canadian market ETFs reflect the fact that financials, energy and materials account for about 70 per cent of the market; a few ETFs attack the market differently.

Top three stocks: Another view on which ETFs take a different approach to tracking the Canadian market.

Click here for a printable excel table.

* Management fee only; the fund is too new to have computed a management expense ratio

Source: Globeinvestor.com, company websites and regulatory filings