Exchange-traded funds (ETFs) are great vessels for investors. Some people choose to invest in a few ETFs, but this can lead to a loss if a few stocks take a downturn. However, investing in many ETFs can result in overlapping and inefficient investing. The key seems to be to invest in ETFs that cover wide but separate stocks. The 5 ETFs here are good choices for an all-weather portfolio.
iShares Core S&P 500 ETF
Warren Buffet himself suggests owning an S&P ETF such as iShares Core S&P 500 ETF (IVV, $293.54). While there is one larger S&P ETF investors could choose (SPDR S&P 500 ETF (SPY), this one tends to be cheaper by about 5 basis points at 0.04% every year.
Invesco Russell MidCap Equal Weight ETF
Right now the Invesco Russell MidCap Equal Weight ETF (EQWM, $51.64) is kind of a dark horse ETF. However, even though it isn’t very popular, some expert investors are saying that it may be a surprisingly good investment in the long haul. This ETF gives investors mid-cap stocks and an equal weighting methodology.
Schwab U.S. Small-Cap ETF
Investing in the Schwab U.S. Small-Cap ETF (SCHA, $78.18) gives investors a relatively inexpensive way to add small-cap stocks to their portfolio. These stocks are a good way to build investments without being very risky by investing cheaply in a large selection of companies (1,774 stocks in this ETF).
Vanguard FTSE Developed Markets ETF
Vanguard FTSE Developed Markets ETF (VEA, $43.78) is the best choice for investors to add some international stocks to their portfolio. It’s always good to have some international stocks to avoid home-country bias. Experts at JP Morgan suggest having around 25% of your stock portfolio outside of the US.
Real Estate Select Sector SPDR
While real estate in the newest S&P 500 sector of ETFs, it is a must for any investor who wants to have a truly diversified portfolio. Real Estate Select Sector SPDR (XLRE, $33.90) is considered to be the best ETF to cover this up-and-coming investment area.