Low-cost ETFs are becoming increasingly popular amongst investors, and for good reason. They offer a cost-effective way to diversify your portfolio while providing exposure to a range of asset classes. But with so many options available, it can be difficult to know where to start. In this panel discussion-style post, we’ll explore some of the best low-cost ETFs out there.
First up is the Vanguard Total Stock Market ETF (VTI). This fund tracks the performance of the CRSP US Total Market Index and has an expense ratio of just 0.03%. With over 3,500 holdings, VTI offers broad exposure to U.S. equities and is an excellent choice for those seeking market-like returns at a low cost.
Another great option for investors looking for low-cost exposure to U.S. stocks is the iShares Core S&P Total U.S. Stock Market ETF (ITOT). With an expense ratio of only 0.03%, ITOT provides access to over 3,600 stocks across all sectors and market caps in the U.S.
For those interested in international equities, the Vanguard FTSE All-World ex-US ETF (VEU) is worth considering. This fund invests in companies located outside of the United States and covers both developed and emerging markets. It has an expense ratio of just 0.08% and provides exposure to nearly 2,500 holdings.
The iShares Core MSCI EAFE ETF (IEFA) is another excellent option for international equity exposure with a low expense ratio of just 0.07%. The fund tracks the performance of large- and mid-cap companies in developed markets outside North America including Europe, Asia Pacific, and Australia.
Fixed income investors should consider investing in bond funds such as Vanguard Total Bond Market ETF (BND). BND seeks to track the performance of Bloomberg Barclays U.S Aggregate Float Adjusted Index which includes investment-grade U.S. bonds with varying maturities and has an expense ratio of just 0.05%.
The iShares Core U.S. Aggregate Bond ETF (AGG) is another great option for fixed income investors with an expense ratio of 0.04%. AGG invests in a diversified portfolio of investment-grade U.S. bonds including government, corporate, and mortgage-backed securities.
One area where low-cost ETFs really shine is in the realm of sector investing. The Technology Select Sector SPDR Fund (XLK) provides exposure to some of the largest technology companies in the world such as Apple, Microsoft, and Amazon while maintaining an expense ratio of just 0.12%.
For those looking to invest in real estate without owning physical property, there’s the Vanguard Real Estate ETF (VNQ). With an expense ratio of only 0.12%, VNQ invests in companies that own or operate office buildings, hotels, shopping centers, and other types of commercial properties.
Finally, we have the iShares MSCI USA ESG Select ETF (SUSA), which offers investors exposure to companies that meet certain environmental, social, and governance criteria while keeping expenses at a minimum with its 0.25% expense ratio.
In conclusion, there are plenty of low-cost ETF options available for investors seeking broad diversification across asset classes or targeted exposure to specific sectors or themes. It’s important to consider your investment goals before choosing which funds are right for you but by selecting any one or more from this list can definitely be a good starting point towards achieving your financial objectives over time!