Which ETF is best to buy now?
1. Vanguard S&P 500 ETF (VOO -0.26%) Legendary investor Warren Buffett has said that the best investment the average American can make is a low-cost S&P 500 index fund like the Vanguard S&P 500 ETF.
| ETF | Assets Under Management | Expense Ratio |
|---|---|---|
| Vanguard Information Technology ETF (VGT) | $71.7 billion | 0.1% |
| Invesco AI and Next Gen Software ETF (IGPT) | $254 million | 0.6% |
| MicroSectors FANG+ Index 3X Leveraged ETN (FNGU) | $3.3 billion | 0.95% |
| Vanguard U.S. Quality Factor ETF (VFQY) | $292 million | 0.13% |
| Symbol | Name | 5-Year Return |
|---|---|---|
| IWF | iShares Russell 1000 Growth ETF | 18.24% |
| QTEC | First Trust NASDAQ-100 Technology Sector Index Fund | 18.12% |
| VUG | Vanguard Growth ETF | 17.86% |
| KCE | SPDR S&P Capital Markets ETF | 17.77% |
1. Vanguard S&P 500 ETF (VOO -0.26%) Legendary investor Warren Buffett has said that the best investment the average American can make is a low-cost S&P 500 index fund like the Vanguard S&P 500 ETF.
The Vanguard S&P 500 ETF (VOO -0.26%) is a top choice for most index fund investors. Even Warren Buffett recommends it above any other investment. There's a good reason for that. Its low expense ratio and tight index tracking make it a top choice for anyone looking to match the returns of the S&P 500.
| Symbol | Name | AUM |
|---|---|---|
| SPY | SPDR S&P 500 ETF Trust | $533,453,000.00 |
| IVV | iShares Core S&P 500 ETF | $439,738,000.00 |
| VOO | Vanguard S&P 500 ETF | $432,244,000.00 |
| VTI | Vanguard Total Stock Market ETF | $388,015,000.00 |
| Symbol | Name | Avg Daily Share Volume (3mo) |
|---|---|---|
| SQQQ | ProShares UltraPro Short QQQ | 131,663,469 |
| SPY | SPDR S&P 500 ETF Trust | 75,227,273 |
| TQQQ | ProShares UltraPro QQQ | 73,430,531 |
| SOXL | Direxion Daily Semiconductor Bull 3x Shares | 71,267,344 |
| Symbol | Name | Dividend Yield |
|---|---|---|
| QRMI | Global X NASDAQ 100 Risk Managed Income ETF | 12.11% |
| PEX | ProShares Global Listed Private Equity ETF | 12.08% |
| KBWD | Invesco KBW High Dividend Yield Financial ETF | 12.07% |
| SOXS | Direxion Daily Semiconductor Bear 3x Shares | 12.04% |
- VanEck BDC Income ETF (BIZD)
- PGIM Floating Rate Income ETF (PFRL)
- JP Morgan Nasdaq Equity Premium Income ETF (JEPQ)
- iShares Select Dividend ETF (DVYE)
- iShares 20+ Year Treasury Bond Buywrite Strategy ETF (TLTW)
- Global X MLP ETF (MLPA)
- Invesco KBW High Dividend Yield Financial ETF (KBWD)
You expose your portfolio to much higher risk with sector ETFs, so you should use them sparingly, but investing 5% to 10% of your total portfolio assets may be appropriate. If you want to be highly conservative, don't use these at all.
What is the downside to an ETF?
At any given time, the spread on an ETF may be high, and the market price of shares may not correspond to the intraday value of the underlying securities. Those are not good times to transact business. Make sure you know what an ETF's current intraday value is as well as the market price of the shares before you buy.
Key Takeaways
ETFs are less risky than individual stocks because they are diversified funds. Their investors also benefit from very low fees. Still, there are unique risks to some ETFs, including a lack of diversification and tax exposure.
Some funds, such as money market funds or certain exchange-traded funds (ETFs), are highly liquid and allow for same-day or next-day withdrawals. On the other hand, certain alternative investment funds or funds with lock-up periods may have limited liquidity, making it difficult to withdraw your money immediately.
| FUND (TICKER) | EXPENSE RATIO | 10-YEAR RETURN AS OF MARCH 1 |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 0.03% | 11.99% |
| Vanguard Total Stock Market ETF (VTI) | 0.03% | 11.43% |
| Vanguard Total Bond Market ETF (BND) | 0.03% | 1.77% |
| Vanguard Total International Stock ETF (VXUS) | 0.08% | 4.07% |
If you only want to own the biggest and safest companies, choose VOO. If you want broader exposure and more diversification, choose VTI. Or, you could also invest in both, for example, by putting half in VOO and half in VTI.
Key Takeaways. Dividend ETFs invest in high-yielding dividend stocks to maintain a stable, steady income. The S&P 500 is a broad-based index of large U.S. stocks, providing growth and diversification. The best choice for you will depend on whether you prefer income or growth from your investments.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.
Exchange-traded funds (ETFs) are ideal for beginning investors due to their many benefits, which include low expense ratios, instant diversification, and a multitude of investment choices. Unlike some mutual funds, they also tend to have low investing thresholds, so you don't have to be ultra-rich to get started.
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
In terms of total assets, SPY reigns supreme as the most popular S&P 500 ETF.
What is the average return on an ETF?
| S&P 500 ETF | 1-yr | 10yr |
|---|---|---|
| Returns after taxes on distributions and sale of fund shares | 15.87% | 9.85% |
| Average Large Blend Fund | ||
| Returns before taxes | 22.32% | 10.55% |
| Returns after taxes on distributions | — | — |
However, it's important to balance diversification and complexity. Holding too many ETFs can limit gains and make it harder to manage, while holding too few can increase risk. Aim for around 10 to 20 diversified ETFs that align with your goals and risk tolerance.
VHYAX-Vanguard High Dividend Yield Index Fund Admiral Shares.
Vanguard, BlackRock, and State Street dominate the ETF market with the most offerings.
| Symbol | Company Name | Div. Yield |
|---|---|---|
| EFC | Ellington Financial Inc. | 15.16% |
| ARR | ARMOUR Residential REIT, Inc. | 22.48% |
| SBR | Sabine Royalty Trust | 9.38% |
| DX | Dynex Capital, Inc. | 12.77% |
