Exchange traded funds (ETFs) feature low expenses, tax efficiency and fare well when you invest a lump sum into the market. Although many in the media, within the industry and investors are following the newer, narrow-based ETFs, Yuval Rosenberg for CNN Money.com highlights some of the broader-based ETFs. Some ETFs worth your further investigation are:
- Vanguard Total Stock Market (VTI): VTI provides a broad basket of stocks with a low expense ratio of 0.07%. It’s heavy on financial services, set at 22%. The top three holders include ExxonMobil (XOM), General Electric (GE) and Citigroup (C). So far this year, VTI is up 7.7%.
- iShares S&P Global 100 Index (IOO): Forty-seven percent of companies in IOO are located in North America; 45% in western Europe; 5% in Japan and the rest in Asia. This ETF has all the multi-national giants under one roof. So far this year, IOO is up 7%.
- Vanguard Small-Cap Value (VBR): Financial services and industrial materials are the heavy-weights in VBR, coming in at 53%. Small-caps can provide diversification in portfolios. For the year, VBR is up 5%.
- Vanguard FTSE All World (VEU): VEU includes 2,200 stocks from 50 countries, excluding the United States. Opening this year, VEU is up 7% for the last three months.
- SPDR Barclays Capital Capital TIPS (IPE): This ETF invests in Treasure inflation-protected securities (TIPS). Launched in May, State Street started this newer ETF to compete in the fixed-income ETF marketplace.
Broad-based ETFs can be helpful to your portfolio, but with any investment decision, ensure it fits with your financial strategy. It’s also important to set a stop-loss point.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.