Choosing the right ETF | BlackRock (2024)

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Choosing the right ETF | BlackRock (2024)


How to decide which ETF to buy? ›

Before purchasing an ETF there are five factors to take into account 1) performance of the ETF 2) the underlying index of the ETF 3) the ETF's structure 4) when and how to trade the ETF and 5) the total cost of the ETF.

What are the top 5 ETFs to buy? ›

7 Best ETFs to Buy Now
ETFExpense RatioYear-to-date Performance
iShares Semiconductor ETF (SOXX)0.35%14.9%
Simplify Interest Rate Hedge ETF (PFIX)0.50%22.9%
WisdomTree Japan Hedged Equity Fund (DXJ)0.48%23.8%
Invesco S&P 500 Momentum ETF (SPMO)0.13%20.9%
3 more rows
May 7, 2024

How to judge ETF? ›

The two ways to see how closely an ETF matches the index performance are 'tracking error' and 'tracking difference'. Tracking difference addresses how closely the ETF tracks the index returns, while tracking error reflects how consistent over time the tracking quality is.

Which ETF is better to invest? ›

Top sector ETFs
Fund (ticker)YTD performance5-year performance
Vanguard Information Technology ETF (VGT)4.8 percent20.0 percent
Financial Select Sector SPDR Fund (XLF)8.8 percent10.0 percent
Energy Select Sector SPDR Fund (XLE)15.9 percent13.5 percent
Industrial Select Sector SPDR Fund (XLI)8.7 percent11.6 percent

Is it better to invest in one ETF or many? ›

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.

Is spy better than voo? ›

Over the long run, they do compound—those fee differences—and investors have been putting a lot more money into VOO versus SPY. That is the reason why we view VOO slightly better than SPY. And that is just the basic approach, which is the lower the investor can pay, the better the investment is.

Which ETF to start with? ›

List of 10 Best ETFs for Beginners
TickerFundExpense Ratio
VTIVanguard Total Stock Market ETF0.03%
QQQInvesco QQQ Trust0.20%
IJRiShares Core S&P Small Cap ETF0.06%
VXUSVanguard Total International Stock Index0.07%
6 more rows

Which ETF gives the highest return? ›

100 Highest 5 Year ETF Returns
SymbolName5-Year Return
FNGOMicroSectors FANG+ Index 2X Leveraged ETNs44.18%
TECLDirexion Daily Technology Bull 3X Shares34.02%
SMHVanEck Semiconductor ETF31.57%
ROMProShares Ultra Technology28.62%
93 more rows

What is the number one traded ETF? ›

Most Popular ETFs: Top 100 ETFs By Trading Volume
SymbolNameAvg Daily Share Volume (3mo)
TQQQProShares UltraPro QQQ69,254,852
SPYSPDR S&P 500 ETF Trust68,385,469
SOXLDirexion Daily Semiconductor Bull 3x Shares68,098,602
XLFFinancial Select Sector SPDR Fund44,217,730
96 more rows

How do you tell if an ETF is a good investment? ›

The three things you want to look for are:
  1. The fund's liquidity.
  2. Its bid/ask spread.
  3. Its tendency to trade in line with its true net asset value.

What should my ETF portfolio look like? ›

Diversification: A well-diversified portfolio should include ETFs that cover different asset classes (stocks, bonds, commodities, etc.), sectors, industries, and geographical regions. This spreads risk and reduces the impact of any single investment on the overall performance.

How much should I invest in ETFs? ›

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.

What is the downside to an ETF? ›

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.

Should I invest in Voo right now? ›

Vanguard S&P 500 ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is an outstanding option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.

Is it smart to just invest in ETFs? ›

Bottom line. ETFs make a great pick for many investors who are starting out as well as for those who simply don't want to do all the legwork required to own individual stocks. Though it's possible to find the big winners among individual stocks, you have strong odds of doing well consistently with ETFs.

Which order type is best for ETF? ›

Limit order: Gives you control, but may not be filled. A limit order is an order to buy or sell an ETF at a specified price. Unlike market orders, limit orders prioritize price over speed of execution. As their name implies, they enable investors to set a limit on the price of their purchase or sale.

What is the best way to buy an ETF for the S&P 500? ›

S&P 500 index funds trade through brokers and discount brokers and may be accessed directly from the fund companies. Investors may also access ETFs and mutual funds through employer 401(k) programs, individual retirement accounts (IRA), or roboadvisor platforms.

Should I invest in growth or value ETFs? ›

The choice to focus on either value ETFs or growth ETFs comes down to personal risk tolerance. Growth ETFs may have higher long-term returns but come with more risk. Value ETFs are more conservative; they may perform better in volatile markets but can come with less potential for growth.

How do you know if an ETF is doing well? ›

Since the job of most ETFs is to track an index, we can assess an ETF's efficiency by weighing the fee rate the fund charges against how well it “tracks”—or replicates the performance of—its index. ETFs that charge low fees and track their indexes tightly are highly efficient and do their job well.


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