9 Exchange Traded Funds Worth a Second Look
There are so many ETFs on the market that the landscape looks like the mutual fund world. In order to find the quality funds you have to sift through the hundreds of others that probably aren’t a good fit for you. I, like most investors, have a short list of funds that I use to meet the needs of clients. I’m always on the lookout for better products but a strong history of performance speaks volumes to me.
Of course, I don’t know anything about you or your portfolio so use these names as new tools in your investing toolbox. Some tools don’t get used all that much but that’s ok. Do some research and see if they have a place in your portfolio.
Vanguard Total Stock Market (VTI)- I’m not a lover of mutual funds but in the rare occasions that I use them, it’s always Vanguard. Good performance along with low fees make them a responsible choice and their ETFs aren’t any different. The VTI is about as broad based as it gets if you’re looking to capture the performance of the total market.
PowerShares Financial Preferred (PGF)- Investors like preferred stock because of the high dividends but playing preferred stock through an ETF gives you the dividend without the risk that comes with owning a single company’s stock.
iShares MSCI BRIC Index (BKF)- BRIC is an investor acronym that refers to Brazil, Russia, India, and China. These four countries are considered the emerging markets although some investors would have different lists. Regardless, this is a great ETF to capture performance in the emerging markets.
iShares PHLX SOX Semiconductor Sector (SOXX)- The technology sector is huge and simply investing in technology stocks feels a lot like investing in the total stock market. This ETF captures the performance of the semiconductor sector giving you more of a targeted exposure to technology.
Market Vectors High-Yield Muni Income (HYD)- Remember that owning municipal bonds has tax advantages that corporate bonds don’t so the dividend yield you receive from munis is actually higher than the listed yield. This is a bond ETF that’s a little higher on the risk spectrum than investment grade bonds so understand the product fully before committing money.
iShares Dow Jones U.S. Real Estate (SOXX)- This ETF invests in real estate investment trusts or REITS which give a large portion of their profits back to investors in the form of dividends. A good choice if you’re looking for dividend but REITS aren’t well liked in Washington so keep a close eye on this fund.
iShares iBoxx $ Investment Grade Corporate (LQD)- The dividend yield isn’t great on this bond ETF but without going to government bonds, it’s hard to get a much safer ETF. This fund invests in large companies with investment grade ratings and the diversification of the ETF makes your money ultra-safe.
United States Commodity Index (USCI)- Commodities are the types of investments that will keep you up at night but if you put them together in an ETF, it takes a lot of violent moves out of the stock. Use an ETF like this if you want the exposure of commodities without the stomach ulcers that come with owning individuals like gold, oil, copper, or corn.
iShares Russell 2000 Index (IWM)- Feeling aggressive? This fund invests in smaller companies that are very sensitive to economic events. Don’t load your portfolio with this one name but it’s a great fund for small cap. stock exposure.
I purposely stayed away from some of the more widely known ETFs like GLD, SPY, and UNG but also take a look at these highly popular names. Now, start your research. You can’t buy any of these until you can tell somebody how they work. You should be an expert before you buy.