The Internet brokerage E*Trade has launched its own mutual fund family and in the process has created what may be the first mutual fund to offer so-called electronic shares.

Investors in the new fund, the E*Trade S&P 500 Index Fund, to be available early in 1999, must receive all their information about the fund electronically. The savings from that arrangement are expected to translate into lower fees. The fund fees are expected to be even lower than for other index funds which typically have low advisory fees because they are passively managed.

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