When it comes to the basics, most financial advisors suggest diversified exposure in equities and fixed-income assets that encompass the global markets. Investors can also produce a 60/40 stock and bond mix through as little as three ETF options from various fund providers.
For instance, investors can hold cheap index-based ETFs such as BlackRock’s iShares suite, including iShares Core S&P Total U.S. Stock Market ETF (NYSEArca: ITOT), iShares Core MSCI Total International Stock (NYSEArca: IXUS) and iShares Core U.S. Aggregate Bond ETF (NYSEArca: AGG). ITOT provides exposure to the total U.S. stock market, IXUS includes developed ex-U.S. and emerging market companies. AGG tracks broad U.S. investment-grade debt.
Similarly, investors can utilize the low-cost Vanguard Total Stock Market Index ETF (NYSEArca: VTI), Vanguard Total International Stock ETF (NYSEArca: VXUS) and Vanguard Total Bond Market ETF (NYSEArca: BND). VTI following CRSP index of large-, mid- and small-cap U.S. stocks. VXUS reflects an FTSE index of developed and emerging market countries, excluding U.S. exposure. BND also tracks U.S. investment-grade debt.
Rounding out the top three ETF providers, State Street Global Advisor offers the SPDR Russell 3000 ETF (NYSEArca: THRK), SPDR MSCI ACWI ex-US ETF (NYSEArca: CWI) and SPDR Barclays Aggregate Bond ETF (NYSEArca: BNDS). THRK tries to reflect the broad Russell 3000 Index, which represents approximately 98% of the investable U.S. equity market. CWI follows a similar portfolio as IXUS. BNDS also tracks the benchmark Barclays U.S. Aggregate Index of investment-grade U.S. debt.
For more information on ETFs, visit our ETF 101 category.
iShares Core S&P Total U.S. Stock Market ETF (NYSEArca: ITOT)