[Editor's Note: This Article was originally published on Jan. 24, 2019. It has since been updated]Investors are seemingly always on a quest for a portfolio they deem to be "well-balanced." Fortunately for investors seeking balance, exchange-traded funds (ETFs) make that objective significantly easier and, in many cases, less expensive than other instruments.Many of the best ETFs are inexpensive, highly liquid and span asset classes and regions, helping investors ameliorate the dreaded home country bias. Of course, what makes a well-balanced portfolio for one investor may not be properly balanced to another, but conventional wisdom does dictate that a mix of bonds and equities is a sensible starting point.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFrom there, more aggressive investors can add in alternative asset classes, including commodities, something many of the best ETFs do in diversified fashion. * 10 Stocks to Buy That Could Be Takeover Targets In the search for balanced portfolios, here are some of the best ETFs to consider. ETFs to Buy: JPMorgan BetaBuilders U.S. Equity ETF (BBUS)Source: Shutterstock Expense Ratio: 0.02% per year, or $2 on a $10,000 investment.You may have recently heard that a pair of ETFs launched with expense ratios of 0%. The JPMorgan BetaBuilders U.S. Equity ETF (CBOE:BBUS) is not one of those funds, but of the ETFs with fees, the newly minted BBUS is the cheapest, charging a mere 0.02% per year.While BBUS is new (it debuted in late March), it is one of the best ETFs to act as a core building block for properly balanced portfolios. This fund holds over 620 stocks, providing investors with exposure to over 85% of the U.S. equity market. BBUS has over $30 million in assets under management, which is a decent start, but for investors that like big ETFs, expect BBUS's stature to soon increase as JPMorgan launches a robo-advisor platform. BBUS will be one of the cornerstones of that offering.BBUS allocates 21.5% of its weight to technology stocks while the healthcare and financial services sectors combine for 27.3% of the fund's roster. Investors that embrace this fund should expect long-term returns comparable to those generated by the S&P 500 or Russell 1000 indexes. iShares Core Total USD Bond Market ETF (IUSB)Expense Ratio: 0.06%As mentioned earlier, a well-diversified portfolio does not begin and end with stocks. It should include fixed-income exposure, too. The iShares Core Total USD Bond Market ETF (NASDAQ:IUSB) is one of the best ETFs for novice bond investors or those simply looking for broad-based, cost-efficient exposure to domestic bonds.The $3.57 billion IUSB, which tracks the Bloomberg Barclays U.S. Universal Index, is one of the best ETFs for bond investors seeking diversity and cost efficiencies. Home to nearly 7,900 bonds, IUSB is also one of the least expensive fixed income funds on the market today. * The 10 Best Stocks for 2019 -- So Far IUSB has a 30-day SEC yield of 2.9%, a 12-month yield of 3% and an effective duration of 5.22 years. Due to heavy exposure to U.S. Treasuries and other government agency debt, credit risk is minimal with this best ETF. Bonds with AAA ratings account for 61.54% of the portfolio. WisdomTree U.S. Quality Dividend Growth Fund (DGRW)Expense Ratio: 0.28%Sure, there are cheaper dividend funds on the market, but the WisdomTree U.S. Quality Dividend Growth Fund (NASDAQ:DGRW) is one of the best ETFs in this category. Dividends, particularly when reinvested, are vital to investors' long-term outcomes, making DGRW ideal for a broad swath of market participants, be they rookies, sophisticated players or retirement planners.There are dozens of dividend ETFs for investors to consider, but DGRW's fundamentally weighted methodology stands out from the pack. A case can even be made that is a dividend ETF Warren Buffett himself would enjoy."Return on equity (ROE) is a metric Buffett has written on extensively: it's a 'quality' indicator for stocks, reflecting how much profit a business earns relative to its net equity capital," according to WisdomTree research.DGRW's underlying index emphasizes "both ROE and return on assets (ROA) as part of the selection requirements. Using ROA as a screening criterion penalizes firms using leverage to drive ROE," notes the issuer.DGRW also pays a monthly dividend and is worth the cost of admission relative to its peer group. WisdomTree U.S. SmallCap Dividend Fund (DES)Expense Ratio: 0.38%Like its stablemate DGRW, the WisdomTree U.S. SmallCap Dividend Fund (NYSEARCA:DES) is one of the stars in its respective category. This is one of the best ETFs for income-hungry investors as well as those seeking exposure to smaller stocks because DES is historically less volatile than rival non-dividend small-cap funds."This portfolio targets dividend payers without incurring too much risk," said Morningstar in a recent note. "Although the fund doesn't screen its holdings for profitability or dividend sustainability, a few dividend cuts across its portfolio shouldn't significantly affect its performance because it is broadly diversified and skews toward larger, more-stable names in the small-value Morningstar Category."DES allocates nearly a third of its combined weight to industrial and consumer discretionary stocks while the real estate and financial services sectors combine for 26.3%. Plus, this has long been one of the best ETFs in the small-cap value space. * 6 Big Dividend Stocks to Buy as Yields Plunge "From its launch in June 2006 through April 2019, the strategy has topped the small-value category average and the Russell 2000 Value Index by 1.2 and 1.0 percentage points annually, respectively, with similar risk," according to Morningstar. "The fund's favorable stock exposure within the energy and consumer discretionary sectors contributed to most to its outperformance." Vanguard Total Corporate Bond ETF (VTC)Expense Ratio: 0.07%While it is important to remember that bonds are an important part of well-balanced portfolios, investors should also remember that they should be heavily allocated to U.S. government debt. That strategy limits credit opportunities and some of the potential added upside associated with corporate bonds.Put simply, the Vanguard Total Corporate Bond ETF (NASDAQ:VTC) is one of the best ETFs for investors seeking a massive bench of investment-grade corporate bonds across varying durations and maturities. VTC is classified as an intermediate-term bond fund, but it features exposure to short-, medium- and long-dated corporate debt with almost 6,000 holdings.VTC accomplishes those objectives in cost-effective fashion by holding Vanguard's three other corporate bond ETFs, which span the aforementioned maturity categories. Over 87% of VTC's holdings are rated A or Baa and it has an average duration of 6.9 years. Vanguard Total International Bond ETF (BNDX)Expense Ratio: 0.09%Keeping with the theme of using cheap bond ETFs to enhance portfolio diversity, there is the Vanguard Total International Bond ETF (NASDAQ:BNDX). BNDX is one of the best ETFs in the fixed income arena this year in terms of both performance and asset-gathering acumen.BNDX tracks the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index and holds nearly 5,800 bonds with an average duration of 7.8 years. There are other benefits to owning international bonds beyond making a portfolio more diverse. * 7 Bank Stocks to Leave in the Vault A fund such as BNDX can help investors access potentially higher yields than are found on domestic government bonds, gain exposure to monetary policies that are not delivered by the Federal Reserve and the potential for higher returns. Over the past three years, BNDX has outperformed the Bloomberg Barclays Aggregate Bond Index by nearly 200 basis points. iShares Core MSCI EAFE ETF (IEFA)Expense Ratio: 0.08%The iShares Core MSCI EAFE ETF (CBOE:IEFA) is one of the best ETFs for investors looking to bring cost-effective international equity exposure to their portfolios. IEFA, one of the largest ex-U.S. equity funds in the world, reflects the valuation discounts associated with many ex-U.S. developed markets, including Europe."Europe offers attractive asset valuations compared to history, especially in risk assets," according to BlackRock. "Regional assets have cheapened further compared to a year ago as concerns about growth and politics increased. The exception to this are core government bonds, which we believe to be expensive compared to global peers."IEFA's largest country weight is Japan at 24.75%, but four of its top five geographic weights are European nations, positioning the fund to take advantage of a rebound in stocks across the pond."As downward revisions to growth start petering out and incoming activity data begin to show signs of life, European risk assets might get a boost this year as value equities benefit," according to BlackRock.As of this writing, Todd Shriber owned shares of DES and DGRW. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 4 FANG Stocks Won't Be Bitten By Regulation Threats * 10 Stocks to Buy That Could Be Takeover Targets * 4 Big Bank Stocks Rebounding Compare Brokers The post 7 Best ETFs for a Well-Balanced Portfolio appeared first on InvestorPlace.
Investors looking for wide-ranging exposure to investment-grade corporate bonds of varying maturities on a cost-effective basis will find a lot to like with the Vanguard Total Corporate Bond ETF (NasdaqGM: ...
The program, part of the central bank’s most recent pandemic-fighting stimulus measures, is designed to support credit markets and the banks. But not all the eligible funds will profit equally from a central bank buying spree.
One of the great things about Vanguard, aside from the low costs, is that when the issuer's index, mutual, and exchange traded fund (ETF) lineups are added, there are plenty of choices for wide varieties of investors, including those on the more risk-averse side of the ledger.Of course, costs, as in low costs, are one of the biggest reasons why Vanguard is a behemoth in the index fund universe and the second-largest U.S. ETF issuer. The company makes clear that it is on the investor's side when it comes to fees. The less investors lose to fees, the more they earn over long holding periods."Imagine you have $100,000 invested. If the account earned 6% a year for the next 25 years and had no costs or fees, you'd end up with about $430,000," said Vanguard. "If, on the other hand, you paid 2% a year in costs, after 25 years you'd only have about $260,000. That's right: The 2% you paid every year would wipe out almost 40% of your final account value. 2% doesn't sound so small anymore, does it?"InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks Under $5 to Buy for Fall For conservative investors, the good news is that there are plenty of Vanguard funds that meet their criteria. Those offerings generally come with below-average fees. With that in mind, here are some of the best Vanguard funds for conservative investors to nibble at. Vanguard Dividend Growth Fund (VDIGX)Source: Shutterstock Expense ratio: 0.22% per year, or $22 on a $10,000 investment.Conservative investors often embrace dividend strategies. The recently-reopened Vanguard Dividend Growth Fund (MUTF:VDIGX) is an excellent avenue with which to express that view. This Vanguard fund's costs are decent, but more importantly, it's a no-load mutual fund with a track record of nearly three decades and a manager that has been in place for 13 years.There a few reasons why VDIGX is a compelling bet among Vanguard funds. First, the yield on 10-year Treasuries recently slipped below the dividend yield on the S&P 500, indicating investors continue to lack adequate compensation with government debt. Second, the market is clearly favoring defensive strategies, including steady dividend payers.Finally, some market observers believe swaps markets are not pricing in the right level of S&P 500 dividend growth for 2020. That growth is likely to come in better than currently expected, which could be a nice jolt for this Vanguard, assuming broader markets perform well in 2020. Vanguard Tax-Exempt Bond ETF (VTEB)Source: Shutterstock Expense ratio: 0.08%For conservative investors, it doesn't get much better than municipal bonds and the Vanguard Tax-Exempt Bond ETF (NYSEARCA:VTEB). It's Vanguard's initial foray into the world of municipal bond ETFs. It has been a successful one at that as highlighted by VTEB's $5.8 billion in assets under management. This Vanguard fund, which tracks the S&P National AMT-Free Municipal Bond Index, holds 4,202 muni bonds, a massive number relative to competing strategies.Yield usually isn't the name of the game with investment-grade munis, but this Vanguard fund's 2.30% yield is better than what investors get on 10-year Treasuries, plus VTEB's credit risk is almost non-existent as 92% of its holdings are rated AAA, AA, or A. * 10 Cheap Dividend Stocks to Load Up On This Vanguard fund has an average duration of 5.4 years. That puts VTEB in intermediate-term territory, which is just fine as it's likely the Federal Reserve cuts interest rates again this year, perhaps up to two more times. Vanguard Total International Bond Index Fund ETF (BNDX)Source: Shutterstock Expense ratio: 0.09%For the conservative investor looking for to diversify away from U.S. government debt, the Vanguard Total International Bond Index Fund ETF (NASDAQ:BNDX) is a fund that makes a lot of sense, and not just because the ETF has been on a streak of hitting record highs this year.With low credit risk, this Vanguard fund lobs off a 30-day SEC yield of 2.87%. Plus, many of the ETF's marquee country weights already have or are likely to join the U.S. in lowering interest rates, thereby increasing the value of the underlying bonds in this portfolio."Japanese bonds account for nearly 20% of the fund's while European debt represents nearly 57%. Japan won't be raising interest rates anytime and the European Central Bank (ECB) is pushing for easier monetary policy," according to Nasdaq.Another reason to like this Vanguard: it has a currency hedge, meaning it's designed to benefit from strength in the U.S. dollar or weakness in the currencies its holdings are denominated in. Vanguard Global ex-US Real Estate ETF (VNQI)Source: Shutterstock Expense ratio: 0.12%All that talk about lower interest rates, declining Treasury yields and investors playing defense is lifting domestic real estate funds, but don't sleep on international equivalents. The Vanguard Global ex-US Real Estate ETF (NASDAQ:VNQI), which features exposure to more than 30 countries, is up 10.2% year-to-date and yields 3.41%.VNQI "focuses on closely tracking the index's return, which is considered a gauge of overall non-U.S. real estate investment trusts' and operating companies' returns and offers high potential for investment growth; share value rises and falls more sharply than that of funds holding bonds," according to Vanguard. * 15 Growth Stocks to Buy for the Long Haul Home to 615 real estate stocks, this Vanguard fund can be considered an idea for conservative risk-takers due to its 20.40% exposure to emerging markets and its status as a mid-cap fund. Investors eyeing this Vanguard fund may want to wait because it allocates more than 12% of its weight to Hong Kong, a market battered in recent weeks due to geopolitical headwinds. The protests in Hong Kong are aimed at China, more than 10% of VNQI's weight, so wait a bit on a this Vanguard fund. Vanguard Total Corporate Bond ETF (VTC)Source: Shutterstock Expense ratio: 0.07%Among corporate bond ETFs, it's hard to find a larger lineup than the nearly 6,000 bonds featured in the Vanguard Total Corporate Bond ETF (NASDAQ:VTC). VTC arrives at that massive lineup by holding the three other Vanguard corporate bond ETFs. The Vanguard Short-Term Corporate Bond ETF (NASDAQ:VCSH) is VTC's largest holding at a weight of 36.20%While VTC's largest allocation is to a short-term Vanguard fund, its exposure to intermediate- and longer-dated corporate bonds is enough to prop its yield up to a decent 3.36%. And that's with nearly half its holdings rated AAA, AA or A.VTC has an average duration of 7.3 years, which is below the 9.08 years on the Markit iBoxx USD Liquid Investment Grade Index. With interest rates falling and VTC's lower duration relative to that rival index, the Vanguard fund is trailing that benchmark this year, but if VTC rebalances away from short-term corporates, its leverage to declining interest rates would increase. Vanguard Mid-Cap Value Index Fund Admiral Shares (VMVAX)Source: Shutterstock Expense ratio: 0.07%The Vanguard Mid-Cap Value Index Fund Admiral Shares (MUTF:VMVAX) carries a $3,000 minimum investment, but this Vanguard is worth the cost of admission for conservative investors willing to bet on a value rebound while getting some mid-cap exposure."Value stocks are those that may be temporarily undervalued by investors," according to Vanguard. "These companies typically grow at a slower pace than the broader group of mid-sized companies. One of the fund's key risks is that mid-capitalization stocks tend to be more volatile than large-company stocks." * 10 Best Stocks to Buy and Hold Forever This Vanguard fund holds 206 stocks, nearly a quarter of which hail from the financial services sector. Consumer staples and discretionary names combine for over 26% of VMVAX's roster. Vanguard High Dividend Yield ETF (VYM)Source: Shutterstock Expense ratio: 0.06%One of the largest and least expensive dividend ETFs, the Vanguard High Dividend Yield ETF (NYSEARCA:VYM) is a solid bet for yield seekers and dividend growth investors. That's the case because while VYM yields almost 3.05%, that yield isn't so high as to imply reason for concern. Additionally, VYM does not feature excessive allocations to high-yield sectors like real estate and utilities. That's good news because there are risks associated with high-yield stocks."Focusing on high-yielding stocks can be dangerous because these names may be under financial distress and at risk of cutting their dividend payments," according to Morningstar. "Many pay out a large share of their earnings and have a narrow buffer to cushion these payments if their business deteriorates compared with lower-yielding counterparts."VYM holds nearly 420 stocks, many of which have a value tilt. The near-term risk with this Vanguard fund is its almost 19% weight to the financial services sector, which is being pressured by falling interest rates.Todd Shriber doesn't own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 7 Vanguard Funds for Conservative Investors appeared first on InvestorPlace.
Index fund and exchange-traded fund (ETF) giant Vanguard said that it is planning to introduce the Vanguard Total World Bond ETF. The Vanguard Total World Bond ETF is expected to debut in the third quarter and will use an ETF of ETFs structure, an approach Vanguard previously applied with the Vanguard Total Corporate Bond ETF (VTC). VTC, which debuted in November, holds Vanguard's other three corporate bond ETFs – the Vanguard Short-Term Corporate Bond ETF (VCSH), Vanguard Intermediate-Term Corporate Bond ETF (VCIT) and Vanguard Long-Term Corporate Bond ETF (VCLT).