Advisors had to sift through thousands of exchange traded funds (ETFs) last year, and of those thousands, ten funds stood out. Let’s take a look at what ETFs advisors sought more information about.
According to InvestmentNews, the list of the top ten funds researched by financial advisors last year is based on information given by Morningstar.
- iShares Barclays TIPS Bond (NYSEArca: TIP). With an expense ratio of 0.20%, advisors sought out this ETF for its cheap exposure to Treasury inflation-protected securities. If inflation rises, investors should consider switching regular bonds like Treasuries to Treasury Inflation-Protected Securities (TIPS). TIPS bond’s principal and interest payments grow with inflation. [More on TIPs.]
- SPDR Gold Shares (NYSEArca: GLD). GLD has produced double digit returns in four of the five past years. Gold prices have been rising because currencies the world over are mostly in a weakening phase and governments are printing money fast and furiously. Experts are predicting that gold investment this year is going to soar, thanks to another year full of potential financial uncertainties. [More on Gold.]
- iShares MSCI EAFE Index ETF (NYSEArca: EFA). Another popular choice of advisors. The fund was up 27% last year and it has an expense ratio of 0.35%. The argument for investing globally is based on low correlations – if one area of the world tanks, another may be thriving. Investing overseas gives you diversification away from U.S. assets. [How Being Under-allocated Globally Could Hurt.]
- iShares MSCI Emerging Markets (NYSEArca: EEM). Last year, international stock markets were all the rage, sparking billions of dollars of inflows into ETFs. The MSCI index provider managed to nab about 70% of that money. [More on Emerging Markets.]
- iShares iBoxx $ Investment Grade Corporate Bond (NYSEArca: LQD). LQD has produced positive returns in each of the last seven years. Corporate bond spreads are the highest they’ve been since November, rising at the fastest pace in more than two months. The spike is on the heels of concerns that the state of government finances will hinder the recovery and make it more challenging for companies to make their debt payments. [More on Corporate Bonds.]