If you don't feel confident choosing ETFs, consider opening an account with a robo-advisor that automatically invests on your behalf. Many robo-advisors, like Betterment , recommend low-cost ETF portfolios so you can take advantage of this investing vehicle without having to do your research on all the different options available. Skip Navigation. Follow Select. Our top picks of timely offers from our partners More details.
SoFi Personal Loans. LightStream Personal Loans. We may receive a commission from affiliate partner links. Click here to read more about Select. Click here to read our full advertiser disclosure. We may receive a commission when you click on links for products from our affiliate partners.
How to get started investing in ETFs First, you'll need to set up an online account through a broker or trading platform. It gives you a chance to take advantage of the overall performance of the market. What Are ETFs? Exchange-traded funds , or ETFs, represent a basket of investments.
Many of the most popular ETFs focus on stocks and bonds, but there are also ETFs that include commodities and foreign currencies.
Some of the best ETFs are those that offer exposure to a large swath of the market, providing instant diversity with one investment. They also can help protect your portfolio, because ETFs can be created to be broadly diverse. Diversifying your portfolio is a healthy part of financial wellness since it spreads out your investments among numerous companies, instead of just one. An ETF is a basket of investments that trades on the stock market, just as you would trade any other stock.
ETFs, on the other hand, can be traded throughout the day and are treated like stocks on the exchange. The best ETFs, according to investing experts, are index funds. Index funds are low-cost and give you exposure to an entire market. Some of the ETFs she suggests might be a good fit for a wide variety of people include:.
She suggests considering such sector index ETFs as:. In general, ETFs that follow specific sectors will carry higher fees and are subject to more volatility than ETFs that track entire markets. Determining the top equity ETFs can be difficult, but Maizes recommends comparing the performances and fees of index ETFs to their actively managed counterparts. Experts suggest passively managed funds to keep expenses low and avoid higher taxes.
Investing in ETFs can be done on your own. Maizes recommends comparing different ETFs and their fees. All ETFs have expense ratios, which are administrative fees charged by the fund.
Keep an eye out for low expense ratios, somewhere near 0. A high expense ratio will eat into your profits. As with any investment, some ETFs are riskier than others. Here's an explanation for how we make money.
Founded in , Bankrate has a long track record of helping people make smart financial choices. All of our content is authored by highly qualified professionals and edited by subject matter experts , who ensure everything we publish is objective, accurate and trustworthy. Our investing reporters and editors focus on the points consumers care about most — how to get started, the best brokers, types of investment accounts, how to choose investments and more — so you can feel confident when investing your money.
Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. We value your trust.
Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens.
We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers.
Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades.
Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site.
Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site.
While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. This content is powered by HomeInsurance. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions such as approval for coverage, premiums, commissions and fees and policy obligations are the sole responsibility of the underwriting insurer.
The information on this site does not modify any insurance policy terms in any way. Exchange-traded funds ETFs allow investors to buy a collection of stocks or other assets in just one fund with usually low expenses, and they trade on an exchange like stocks. ETFs have become tremendously popular in the last decade and now hold trillions of dollars in assets.
With literally thousands of ETFs to choose from, where does an investor start? And with the stock market rising furiously after an initial plunge as part of the coronavirus crisis, what are the best ETFs to buy? Below are some of the top ETFs by category, including some highly specialized funds.
So investors can find the kind of stock funds they want exposure to and buy only stocks that meet certain criteria. Some of the most popular equity ETF sectors and their returns as of July 26 include:. This kind of ETF can provide targeted exposure to international publicly traded companies broadly or by more specific geographic area, such as Asia, Europe or emerging markets.
Investing in foreign companies introduces concerns such as currency risk and governance risks, since foreign countries may not offer the same protections for investors as the U. This kind of ETF gives investors a way to buy stock in specific industries, such as consumer staples, energy, financials, healthcare, technology and more. These ETFs are typically passive, meaning they track a specific preset index of stocks and simply mechanically follow the index. This kind of ETF gives investors a way to buy only stocks that pay a dividend.
A dividend ETF is usually passively managed , meaning it mechanically tracks an index of dividend-paying firms. This kind of ETF is usually more stable than a total market ETF, and it may be attractive to those looking for investments that produce income, such as retirees. The best dividend ETFs tends to offer higher returns and low cost.
A bond ETF provides exposure to a portfolio of bonds, which are often divided into sub-sectors depending on bond type, their issuer, maturity and other factors, allowing investors to buy exactly the kind of bonds they want. Bonds pay out interest on a schedule, and the ETF passes this income on to holders. Bond ETFs can be an attractive holding for those needing the safety of regular income, such as retirees. Some of the most popular bond ETF sectors and their returns as of July 26 include:.
This kind of bond ETF gives exposure to bonds with a long maturity, perhaps as long as 30 years out. Long-term bond ETFs are most exposed to changes in interest rates, so if rates move higher or lower, these ETFs will move inversely to the direction of rates. This kind of bond ETF gives exposure to bonds with a short maturity, typically no more than a few years. These ETFs can be a more attractive option than owning the bonds directly because the fund is highly liquid and more diversified than any individual bond.
This kind of bond ETF gives investors exposure to a wide selection of bonds, diversified by type, issuer, maturity and region. A total bond market ETF provides a way to gain broad bond exposure without going too heavy in one direction, making it a way to diversify a stock-heavy portfolio.
Muni bonds have traditionally been one of the safest areas of the bond market, though if you own out-of-state munis in a fund, you will lose the tax benefits in your home state, though not at the federal level. Given the tax advantages, it is advantageous to consider a municipal bond ETF that invests in your state of residence.
A balanced ETF owns both stock and bonds, and it targets a certain exposure to stock, which is often reflected in its name.
These funds allow investors to have the long-term returns of stocks while reducing some of the risk with bonds, which tend to be more stable. A balanced ETF may be more suitable for long-term investors who may be a bit more conservative but need growth in their portfolio.
A commodity ETF gives investors a way to own specific commodities, including agricultural goods, oil, precious metals and others without having to transact in the futures markets. The ETF may own the commodity directly or via futures contracts. Commodities tend to be quite volatile, so they may not be well-suited for all investors. However, these ETFs may allow more advanced investors to diversify their holdings, hedge out exposure to a given commodity in their other investments or make a directional bet on the price of a given commodity.
The best-performing gold ETFs tend to offer highly effective portfolio diversification with added defensive stores of value. A currency ETF gives investors exposure to a specific currency by simply buying an ETF rather than accessing the foreign exchange forex markets.
These ETFs are more suitable for advanced investors who may be seeking a way to hedge out exposure to a specific currency in their other investments or to simply make a directional bet on the value of a currency.
REITs are a convenient way to own an interest in companies that own and manage real estate, and REITs operate in many sectors of the market, including residential, commercial, industrial, lodging, cell towers, medical buildings and more. ETFs even allow investors to bet on the volatility of the stock market through what are called volatility ETFs. Volatility usually rises when the market is falling and investors become uneasy, so a volatility ETF can be a way to hedge your investment in the market, helping to protect it.
0コメント