Exchange-traded funds (ETFs)are amazing investment tools that offer low management fees for the long-term investor while offering a wide array of investment themes for short-term investors looking to capitalize on trends and emerging growth opportunities.
If you’re not 100% confident in your stock trading abilities and lack full conviction in your positions, then your emotions could get in the way of your investments. If this describes you, then you’re much better off taking a passive approach to investing, which can be done throughlow-cost ETFs.
The seven ETFs covered below have some ofthe lowest expense ratios you will find throughout the entire ETF universe. While that doesn’t necessarilymean they’re the best investment options at this point in time, they will definitely cost you the least as you continually improve your investment strategy.
All numbers below are as of December 15, 2021.
1. iShares Treasury Floating Rate Bond (TFLO)
- Purpose: The iShares Treasury Floating Rate Bond (TFLO) tracks the performance of the U.S. Treasury Floating Rate Index, which is composed of U.S. Treasury floating rate bonds.
- Net Assets: $256.3million
- Average Volume (shares): 45,275
- Yield: 0.34%
- Expense Ratio: 0.15%
- 1-Year Performance: 0.00%
TFLO Analysis
Unless you’re interested in waiting very patiently to take advantage of mispricings or you have a substantial amount of capital and want to implement a professional trading strategy to pick up small returns, this run-of-the-mill fund is only advantageous in a bear market.
2. First Trust NASDAQ CEA Cybersecurity ETF (CIBR)
- Purpose: The First Trust NASDAQ CEA Cybersecurity ETF (CIBR) tracks the performance of the CEA Cybersecurity Index.
- Net Assets: $5.48billion
- Volume: 849,200
- Yield: 0.53%
- Expense Ratio: 0.60%
- 1-Year Performance: 27.85%
CIBR Analysis
This relatively new ETFlaunched in mid-summer 2015, yet while its five-year returns are promising, CIBR's return performed poorly in comparison to others in the technology category. The gamble is up to you: cybersecurity is going to continue to be importantin the digital world, but will white-hat hackers continue to harness technology for good?
3. Schwab US Broad Market ETF (SCHB)
- Purpose: The Schwab US Broad Market ETF (SCHB) tracks the Dow Jones Broad Stock Market Index—the largest 2,500 publicly traded companies in the U.S.
- Net Assets: $23.45billion
- Volume: 473,000
- Yield: 1.22%
- Expense Ratio: 0.03%
- 1-Year Performance: 26.55%
SCHB Analysis
This ETF launched back in 2009. If you’re bullish, then it’s an option to consider, and the fund has considerably increased its volume in the past few years. This large blend ETF casts a wide net.
4. Vanguard Total Stock Market ETF (VTI)
- Purpose: The Vanguard Total Stock Market ETF (VTI) tracks the performance of the CRSP U.S. Total Market Index, which is all stocks on the NYSE and NASDAQ.
- Net Assets: $291.9 billion
- Volume: 3,358,500
- Yield: 1.20%
- Expense Ratio: 0.03%
- 1-Year Performance: 26.50%
VTI Analysis
VTI has many of the same top holdings as SCHB and these two ETFs trade in tandem most of the time. But VTI offers a lot more liquidity and a slightly higher yield.
5. Vanguard S&P 500 ETF (VOO)
- Purpose: The Vanguard S&P 500 ETF (VOO) tracks the performance of the S&P 500 and is one of the best S&P 500 baseline funds.
- Net Assets: $270billion
- Volume: 4,526,400
- Yield: 1.27%
- Expense Ratio: 0.03%
- 1-Year Performance: 29.30%
VOO Analysis
Trades along with SCHB and VTI despite a different design. It hasmany of the same top 10 holdings but VOO offers a highyieldas well as plenty of liquidity.
6. Schwab International Equity ETF (SCHF)
- Purpose: The Schwab International Equity ETF (SCHF) tracks the total return of the FTSE Developed ex-U.S. Index. In simpler terms, it tracks the performance of large-cap and mid-cap stocks in developed countries excluding the United States.
- Net Assets: $28.0billion
- Volume: 3,070,100
- Yield: 3.13%
- Expense Ratio: 0.06%
- 1-Year Performance: 11.33%
SCHF Analysis
This fund, while attractive in concept, has not historically provided strong returns unless investors are looking specifically to diversify outside of the U.S. Otherwise, if you’re going to invest in a developed market, it might as well be the U.S.
7. iShares Core S&P 500 (IVV)
- Purpose: The iShares Core S&P 500 (IVV) tracks the performance of the S&P 500.
- Net Assets: $331billion
- Volume: 4,141,500
- Yield: 1.27%
- Expense Ratio: 0.03%
- 1-Year Performance: 29.31%
IVV Analysis
Many of IVV’s topholdings are the same as SCHB, VTI, and VOO. So, whileIVV trades the same as those ETFs, you shouldlook at other factors as well. The yield for IVV and the expense ratio are very comparable to the other ETFs. I'd call it a wash.
The Bottom Line
These are several high-quality ETFsthat would be good options in a bull market. Whether you’re a bull or a bear, you should strongly consider putting some of these ETFs on your watch list for future consideration.
At the time this article was written,Dan Moskowitz didnot have any positions in TFLO, CIBR, SCHB, VTI, VOO, SCHF, or IVV. He waslong LABD.
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