What are the most reliable ETFs?
ETFs can be safe investments if used correctly, offering diversification and flexibility. Indexed ETFs, tracking specific indexes like the S&P 500, are generally safe and tend to gain value over time. Leveraged ETFs can be used to amplify returns, but they can be riskier due to increased volatility.
- 9 Safest Index Funds and ETFs to buy in 2024. ...
- Vanguard S&P 500 ETF (VOO 0.04%) ...
- Vanguard High Dividend Yield ETF (VYM 0.23%) ...
- Vanguard Real Estate ETF (VNQ -0.05%) ...
- iShares Core S&P Total U.S. Stock Market ETF (ITOT 0.1%) ...
- Consumer Staples Select Sector SPDR Fund (XLP 0.31%) ...
- iShares 0-3 Month Treasury Bond ETF (SGOV 0.03%)
| Symbol | Name | 5-Year Return |
|---|---|---|
| XNTK | SPDR NYSE Technology ETF | 22.09% |
| XHB | SPDR S&P Homebuilders ETF | 22.05% |
| SPUU | Direxion Daily S&P 500 Bull 2x Shares | 21.90% |
| QQQ | Invesco QQQ Trust Series I | 21.45% |
| Schemes | Latest Price | Returns in % (as on Feb 23, 2024) |
|---|---|---|
| Kotak PSU Bank ETF | 707.14 | 97.51 |
| Nippon ETF PSU Bank BeES | 78.55 | 97.42 |
| Sponsored AdvInvest Now UTI S&P BSE Sensex ETFETF | 787.77 | 24 |
| Motilal MOSt Oswal Midcap 100 ETF | 52.57 | 63.49 |
ETFs can be safe investments if used correctly, offering diversification and flexibility. Indexed ETFs, tracking specific indexes like the S&P 500, are generally safe and tend to gain value over time. Leveraged ETFs can be used to amplify returns, but they can be riskier due to increased volatility.
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.
Low-risk ETFs like Invesco S&P 500 High Dividend Low Volatility ETF SPHD, Simplify Tail Risk Strategy ETF CYA, Cambria Tail Risk ETF TAIL and AGF U.S. Market Neutral Anti-Beta Fund BTAL could be compelling choices. These ETFs are designed for investors who prioritize capital preservation over high returns.
The single biggest risk in ETFs is market risk. Like a mutual fund or a closed-end fund, ETFs are only an investment vehicle—a wrapper for their underlying investment. So if you buy an S&P 500 ETF and the S&P 500 goes down 50%, nothing about how cheap, tax efficient, or transparent an ETF is will help you.
| Symbol | Name | Avg Daily Share Volume (3mo) |
|---|---|---|
| QQQ | Invesco QQQ Trust Series I | 44,293,121 |
| XLF | Financial Select Sector SPDR Fund | 42,596,215 |
| IWM | iShares Russell 2000 ETF | 42,464,570 |
| HYG | iShares iBoxx $ High Yield Corporate Bond ETF | 36,928,203 |
| Symbol | Name | Dividend Yield |
|---|---|---|
| NGE | Global X MSCI Nigeria ETF | 85.61% |
| TSL | GraniteShares 1.25x Long Tesla Daily ETF | 81.98% |
| CYA | Simplify Tail Risk Strategy ETF | 80.58% |
| KLIP | KraneShares China Internet and Covered Call Strategy ETF | 66.09% |
What is better than ETF?
Mutual funds and ETFs may hold stocks, bonds, or commodities. Both can track indexes, but ETFs tend to be more cost-effective and liquid since they trade on exchanges like shares of stock. Mutual funds can offer active management and greater regulatory oversight at a higher cost and only allow transactions once daily.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.
Are ETFs Safer Than Stocks? ETFs are baskets of stocks or securities, but although this means that they are generally well diversified, some ETFs invest in very risky sectors or employ higher-risk strategies, such as leverage.
The top ETF of 2023 is iShares Expanded Tech Software Sector ETF (IGV), with a YTD return of 355.22%. Technology ETFs outperformed their peers this year, driven by the widespread adoption of AI and expectations of a soft landing in the economy in 2024.
The Fidelity Blue-Chip Growth ETF FBCG has jumped 58.7% in 2023 to become the best-performing U.S. fund, excluding ETNs and leveraged products, according to FactSet data. The WisdomTree U.S. Quality Growth Fund QGRW is up 56.2% this year, while the Invesco QQQ Trust Series I QQQ has risen 55.6% in 2023.
ETFs can be a great investment for long-term investors and those with shorter-term time horizons. They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks.
If the company goes bust, the fund itself would be either sold, transferred to another management company or the proceeds returned to investors.
As someone who values low fees, passive management, and high transparency, I personally feel that Fidelity's selection of ETFs is lacking. But if you're a fan of active management, Fidelity has a few unique ETFs that might be worth considering for your portfolio.
Stock-picking offers an advantage over exchange-traded funds (ETFs) when there is a wide dispersion of returns from the mean. Exchange-traded funds (ETFs) offer advantages over stocks when the return from stocks in the sector has a narrow dispersion around the mean.
| Symbol | ETF Name | 10y Chg 2-23-24 |
|---|---|---|
| SMH | VanEck Semiconductor ETF | 988% |
| SOXX | iShares Semiconductor ETF | 840% |
| PSI | Invesco Semiconductors ETF | 763% |
| XSD | SPDR S&P Semiconductor ETF | 615% |
What is the most aggressive ETF?
The largest Aggressive ETF is the iShares Core Aggressive Allocation ETF AOA with $1.80B in assets. In the last trailing year, the best-performing Aggressive ETF was AOA at 15.68%. The most recent ETF launched in the Aggressive space was the iShares ESG Aware Aggressive Allocation ETF EAOA on 06/12/20.
- High-yield savings accounts.
- Certificates of deposit.
- Money market accounts.
- Treasury bonds.
- Treasury Inflation-Protected Securities.
- Municipal bonds.
- Corporate bonds.
- S&P 500 index fund/ETF.
Liquidation of ETFs is strictly regulated; when an ETF closes, any remaining shareholders will receive a payout based on what they had invested in the ETF. Receiving an ETF payout can be a taxable event.
| ETF | Assets | Expense ratio |
|---|---|---|
| Vanguard S&P 500 ETF (ticker: VOO) | $389 billion | 0.03% |
| Schwab U.S. Small-Cap ETF (SCHA) | $16 billion | 0.04% |
| Invesco QQQ Trust (QQQ) | $249 billion | 0.20% |
| Vanguard High Dividend Yield Index ETF (VYM) | $51 billion | 0.06% |
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.
