The E*Trade proprietary fund family will grow by two in the near future, as the Menlo Park Web Wonder has filed with the SEC to launch two new index funds. One will attempt to mirror the returns of the Goldman Sachs E-Commerce (GSEC Composite) Index, and the other will do the same for the Morgan Stanley Capital International Europe, Australia, and Far East Free Index (the "EAFE Free Index"), which the company is calling the E*Trade International Index Fund.

The funds, like the rest of the E*Trade family, are specifically for on-line investors. In order to be a shareholder of the Fund, an investor must have an account with E*TRADE Securities, Inc. In addition, the funds require investors to consent to receive all information about the Fund electronically. Both funds are no-load funds, with no sales charges or 12b-1 fees.

"Technology and e-commerce are two under utilized indexes," Brian Murray, vice president and general manager of E*Trade's mutual fund group said when explaining the timing of the funds' launch.

The GSEC Composite Index was developed by Goldman Sachs & Co. and is an equity benchmark of U.S. traded securities in the e-commerce sector. The GSEC Composite Index is composed stocks of companies that are traded on either the NYSE, AMEX or NASDAQ and meet one of the following objective criteria: 80-100% of revenue is generated online; a substantial percentage of revenue or transactions is related to the internet; are virtual companies; or are key e-commerce infrastructure providers.

The full marketing plan of the funds is still in the early stages but Murray said they will be marketed like most E*Trade products. This would include print advertising on and off-line, he said.

E*Trade Asset Management has entered into a subadvisory agreement with Barclay's for the funds, with a non-master feeder system for the EAFE Fund. 

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