{"id":6838,"date":"2013-08-23T13:57:55","date_gmt":"2013-08-23T20:57:55","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=6838"},"modified":"2016-12-21T07:28:27","modified_gmt":"2016-12-21T15:28:27","slug":"five-etf-funds-for-all-markets","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/five-etf-funds-for-all-markets\/","title":{"rendered":"Five ETF Funds For All Markets"},"content":{"rendered":"

Investors love complexity. They seem attracted, like moths to a flame, to investment funds that are marketed as “designed for this market.”\u00a0ETF\u00a0funds<\/a>\u00a0on the other hand, often\u00a0are the market<\/em>, a simple benchmark.<\/p>\n

You see this trend playing out in the selling of “active” exchange-traded funds, also known managed\u00a0ETF funds. These promise a little extra “zing” from\u00a0active management<\/a>. Naturally, that extra zing comes at a fee, so it better be a pretty good boost, right?<\/p>\n

\"ETF<\/p>\n

Here’s the thing:\u00a0ETFs\u00a0shouldn’t be played as active funds. They are the polar opposite of\u00a0stock picking<\/a>. If you’re going to run a portfolio with an asset allocation, then rebalancing is all the “active” you need.<\/p>\n

So which\u00a0ETFs\u00a0work best in this context? It’s not rocket science. You want big, broad-market funds with a lot of liquidity. The idea is to get the funds that are the lowest cost to trade (no or low commissions from your brokerage), cost the least to own (low fund fees<\/a>) and give you the narrowest bid-ask spread.<\/p>\n

Easy to say, hard to do? Not really, here are five funds that fit the bill:<\/p>\n

iShares Russell 3000 Index (IWV):\u00a0<\/strong>Invests in the largest capitalization-weighted public companies domiciled in the U.S. and its territories, seeking to\u00a0correspond generally to the price and yield performance of the Russell 3000 index. This is\u00a0Apple<\/a>, Exxon and GE, to name just a few of thousands.<\/p>\n

iShares S&P Small Cap 600 Value Index (IJS):<\/strong>\u00a0Holds securities of the S&P 600 index with the lowest price-to-book ratios. The fund’s holdings typically represent approximately 50% of the S&P 600 index market capitalization. Here you’ll find lesser-known companies such as Lasalle Hotels, Piedmont Natural Gas and\u00a0Treehouse Foods.<\/p>\n

Vanguard\u00a0Total\u00a0Bond Market ETF (BND):<\/strong>\u00a0Seeks to track the performance of a broad, market-weighted\u00a0bond fund<\/a>\u00a0index. The fund maintains a dollar-weighted average maturity consistent with that of the index, ranging between five and 10 years. This is U.S. Treasury bonds and mortgage bonds issued by\u00a0Fannie Mae, among many others.<\/p>\n

iShares MSCI EAFE Growth Index (EFG):<\/strong>\u00a0Seeks investment results that correspond before fees and expenses to the price and yield performance of the MSCI EAFE Growth index. This is mostly large foreign companies, often with a global presence. Think Nestle foods, Toyota and drug companies such as\u00a0Novartis.<\/p>\n

SPDR Dow Jones REIT (RWR):\u00a0<\/strong>Seeks to provide investment results before expenses that correspond to the Dow Jones REIT index. REITs are\u00a0real estate investment<\/a>\u00a0companies that own office buildings, apartment complexes and the like:\u00a0Simon Property Group,\u00a0Public Storage\u00a0and\u00a0Boston Properties.<\/p>\n

There are of course others. Am I “giving away the farm” in telling you all this? Of course not. That’s the point. These are the\u00a0ETFs\u00a0everyone uses to get exposure to these parts of the market. That’s why they are liquid, easy and cheap.<\/p>\n

Rather, it’s\u00a0ETF portfolio management<\/a>\u00a0and rebalancing that brings the kind of\u00a0risk-adjusted return<\/a>\u00a0a retirement investor needs. No secret formula necessary, just plain old discipline.<\/p>\n","protected":false},"excerpt":{"rendered":"

Investors love complexity. They seem attracted, like moths to a flame, to investment funds that are marketed as “designed for this market.”\u00a0ETF\u00a0funds\u00a0on the other hand, often\u00a0are the market, a simple … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":6839,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[7],"tags":[],"yoast_head":"\nFive ETF Funds For All Markets | MarketRiders.com<\/title>\n<meta name=\"description\" content=\"Investors love complexity. They seemed attracted to investment funds "designed for this market." 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