What is the strongest ETF?
In fact, an ETF called the Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD), launched in 2013, currently boasts an eye-catching yield of 12%. While the ETF holds appeal for income investors, there are also several things that investors should be aware of before jumping in right after seeing that eye-popping yield.
- ProShares Bitcoin Strategy ETF (BITO)
- Invesco QQQ Trust (QQQ)
- Vanguard Information Technology ETF (VGT)
- VanEck Semiconductor ETF (SMH)
- Invesco S&P MidCap Momentum ETF (XMMO)
- SPDR S&P Homebuilders ETF (XHB)
- Invesco S&P 500 GARP ETF (SPGP)
| Symbol | Name | 5-Year Return |
|---|---|---|
| FNGU | MicroSectors FANG+™ Index 3X Leveraged ETN | 46.68% |
| FNGO | MicroSectors FANG+ Index 2X Leveraged ETNs | 45.28% |
| TECL | Direxion Daily Technology Bull 3X Shares | 38.82% |
| SOXL | Direxion Daily Semiconductor Bull 3x Shares | 33.12% |
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- Vanguard S&P 500 ETF (VOO -1.36%) ...
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- Vanguard Real Estate ETF (VNQ -1.19%) ...
- iShares Core S&P Total U.S. Stock Market ETF (ITOT -1.49%) ...
- Consumer Staples Select Sector SPDR Fund (XLP -1.01%)
| Symbol | Name | AUM |
|---|---|---|
| VOO | Vanguard S&P 500 ETF | $432,191,000.00 |
| VTI | Vanguard Total Stock Market ETF | $383,258,000.00 |
| QQQ | Invesco QQQ Trust Series I | $251,981,000.00 |
| VEA | Vanguard FTSE Developed Markets ETF | $129,613,000.00 |
| Exchange-traded fund (ticker) | Assets under management | Yield |
|---|---|---|
| Vanguard 500 Index ETF (VOO) | $431.7 billion | 1.4% |
| Vanguard Dividend Appreciation ETF (VIG) | $78.2 billion | 1.8% |
| Vanguard U.S. Quality Factor ETF (VFQY) | $324.3 million | 1.3% |
| SPDR Gold MiniShares (GLDM) | $6.8 billion | 0.0% |
| Symbol | Name | Avg Daily Share Volume (3mo) |
|---|---|---|
| SPY | SPDR S&P 500 ETF Trust | 72,997,664 |
| TQQQ | ProShares UltraPro QQQ | 71,893,172 |
| SOXL | Direxion Daily Semiconductor Bull 3x Shares | 71,225,102 |
| XLF | Financial Select Sector SPDR Fund | 46,233,660 |
In fact, an ETF called the Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD), launched in 2013, currently boasts an eye-catching yield of 12%. While the ETF holds appeal for income investors, there are also several things that investors should be aware of before jumping in right after seeing that eye-popping yield.
Market risk
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.
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What are the top three ETFs?
| Fund (ticker) | YTD performance | Expense ratio |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 10.4 percent | 0.03 percent |
| SPDR S&P 500 ETF Trust (SPY) | 10.4 percent | 0.095 percent |
| iShares Core S&P 500 ETF (IVV) | 10.4 percent | 0.03 percent |
| Invesco QQQ Trust (QQQ) | 8.6 percent | 0.20 percent |
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.
| Symbol | ETF Name | 10y Chg 4-2-24 |
|---|---|---|
| USD | ProShares Semiconductors 2x ETF | 4139% |
| SOXL | Direxion Semiconductor 3x ETF | 3453% |
| TECL | Direxion Technology 3x ETF | 3391% |
| TQQQ | ProShares QQQ 3x ETF | 2386% |
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.
- Invesco QQQ Trust (QQQ).
- Vanguard Growth ETF (VUG).
- iShares Russell 1000 Growth ETF (IWF).
- iShares S&P 500 Growth ETF (IVW).
- Schwab U.S. Large-Cap Growth ETF (SCHG).
- SPDR Portfolio S&P 500 Growth ETF (SPYG).
- iShares Core S&P U.S. Growth ETF (IUSG).
| ETF ISIN | 1 month in % | 3 years in % |
|---|---|---|
| Vanguard FTSE North America UCITS ETF DistributingIE00BKX55R35 | +3.42% | +45.74% |
| Vanguard FTSE North America UCITS ETF (USD) AccumulatingIE00BK5BQW10 | +3.38% | +45.69% |
| iShares MSCI North America UCITS ETFIE00B14X4M10 | +3.37% | +44.40% |
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.
| Ticker | Fund name | 5-year return |
|---|---|---|
| SOXX | iShares Semiconductor ETF | 30.70% |
| XLK | Technology Select Sector SPDR Fund | 24.57% |
| IYW | iShares U.S. Technology ETF | 24.09% |
| FTEC | Fidelity MSCI Information Technology Index ETF | 22.79% |
One metric that investors often look to is trailing one-month performance. The top ETFs for equities, bonds, fixed income, commodities, and currencies for April 2024 based on this metric include CRPT, FCVT, EMHY, DBA, and UUP.
Is 10 ETFs too much?
Generally speaking, fewer than 10 ETFs are likely enough to diversify your portfolio, but this will vary depending on your financial goals, ranging from retirement savings to income generation.
Under the Investment Company Act, private investment funds (e.g. hedge funds) are generally prohibited from acquiring more than 3% of an ETF's shares (the 3% Limit).
Here are some examples of 10-year Treasury ETFs: iShares 7-10 Year Treasury Bond ETF (IEF) Vanguard Long-Term Treasury ETF (VGLT) Schwab Long-Term US Treasury ETF (SCHQ)
Leveraged ETF prices tend to decay over time, and triple leverage will tend to decay at a faster rate than 2x leverage. As a result, they can tend toward zero.
For instance, some ETFs may come with fees, others might stray from the value of the underlying asset, ETFs are not always optimized for taxes, and of course — like any investment — ETFs also come with risk.
