ETF Central (2024)

FAQs

What is the best ETF analysis tool? ›

justETF is a prominent website specializing in ETF strategies. It offers valuable guidance through features such as ETF comparisons, portfolio strategies, portfolio simulations, and investment guides. The platform provides helpful tools, including ETF screeners and information on the best/worst ETF performers.

The single biggest risk in ETFs is market risk.

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.

The Vanguard Russell 2000 ETF (NASDAQ: VTWO) tracks the small-cap Russell 2000 index, which outperformed the S&P 500 for the 35 years from its inception in 1979 to 2014.

As most ETFs now trade commission-free and can be bought and sold multiple times throughout the day, they are less likely to be used as buy-and-hold vehicles. Because of his cautionary tone, Ramsey sometimes gets painted with the “anti-ETF” brush. But to be clear, Ramsey's all in favor of using ETFs when used properly.

ETFs, even in a good year, will underperform the best stocks in the fund, meaning investors could have owned just those stocks and done better. ETFs do charge an incremental cost, the expense ratio, for owning the fund.

Interest rate changes are the primary culprit when bond exchange-traded funds (ETFs) lose value. As interest rates rise, the prices of existing bonds fall, which impacts the value of the ETFs holding these assets.

As with traditional investment funds, ETFs have to place their underlying investments with a custodian. The fund provider cannot be both the fund manager, and the "guardian" of the assets. So if an ETF provider goes bankrupt, your investments are not gone cause they will still be kept by the custodian.

Holding an ETF for longer than a year may get you a more favorable capital gains tax rate when you sell your investment.

Investing in the stock market is one of the most effective ways to generate long-term wealth, and you don't need to be an experienced investor to make a lot of money. In fact, it's possible to retire a millionaire with next to no effort through exchange-traded funds (ETFs).

What is the 70 30 ETF strategy? ›

This investment strategy seeks total return through exposure to a diversified portfolio of primarily equity, and to a lesser extent, fixed income asset classes with a target allocation of 70% equities and 30% fixed income. Target allocations can vary +/-5%.

Average Return

In the past year, QQQ returned a total of 32.11%, which is significantly higher than VOO's 26.13% return. Over the past 10 years, QQQ has had annualized average returns of 18.82% , compared to 12.89% for VOO. These numbers are adjusted for stock splits and include dividends.