Choosing the right ETF | BlackRock (2024)

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Choosing the right ETF | BlackRock (2024)

FAQs

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.

How do you evaluate which ETF to buy? ›

The key liquidity factors are:
  1. The underlying securities of the ETF - highly tradable are better.
  2. Fund size - larger tends to be better.
  3. Daily trading volume - more tends to be better.
  4. Market makers - more is better.
  5. Market conditions - liquidity can decline when the markets are very volatile.

What are the top 5 ETFs to buy? ›

7 Best ETFs to Buy Now
ETFExpense RatioAssets Under Management
ProShares Bitcoin Strategy ETF (ticker: BITO)0.95%$2.1 billion
Global X Copper Miners ETF (COPX)0.65%$2.3 billion
YieldMax NVDA Option Income Strategy ETF (NVDY)1.01%$433 million
iShares Semiconductor ETF (SOXX)0.35%$12.4 billion
3 more rows
May 7, 2024

Which ETF is better to invest? ›

Top sector ETFs
Fund (ticker)YTD performanceExpense ratio
Vanguard Information Technology ETF (VGT)4.8 percent0.10 percent
Financial Select Sector SPDR Fund (XLF)8.8 percent0.09 percent
Energy Select Sector SPDR Fund (XLE)15.9 percent0.09 percent
Industrial Select Sector SPDR Fund (XLI)8.7 percent0.09 percent

What are the three best ETFs? ›

3 Top ETFs for a Diversified Stock Portfolio
  1. SPDR S&P 500 ETF Trust. The SPDR S&P 500 ETF Trust (SPY -0.29%) mirrors the S&P 500 Index, encompassing 500 of the largest U.S. corporations. ...
  2. Invesco QQQ Trust. ...
  3. iShares Russell 2000 ETF.
May 12, 2024

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.

How to tell if an ETF is overvalued? ›

Compare the ETF's Market Price to the NAV

Compare the market price to the NAV to determine if the ETF is trading at a premium or discount to its NAV. If the market price is higher than the NAV, the ETF is trading at a premium. If the NAV is lower than the price, the ETF is trading at a discount.

How many ETFs should I own? ›

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

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.

What is the most successful ETF? ›

1. VanEck Semiconductor ETF. The VanEck Semiconductor ETF (SMH) tracks a market-cap-weighted index of 25 of the largest U.S.-listed semiconductors companies. Midcap companies and foreign companies listed in the U.S. can also be included in the index.

What is the safest ETF to invest in? ›

SPDR S&P 500 ETF Trust (SPY 0.24%) Vanguard S&P 500 ETF (VOO 0.27%) iShares Core S&P 500 ETF (IVV 0.24%) Vanguard Total Stock Market ETF (VTI 0.21%)

What is the best ETF to invest $1000 in? ›

If you've got $1,000 available right now that you know you'd like to invest in AI, the Global X Robotics & Artificial Intelligence ETF isn't wildly overextended. Indeed, this ETF is one of the few that's still trading below its late-2021 peak, leaving plenty more room for straightaway upside. Don't overthink it.

What is the downside to an ETF? ›

At any given time, the spread on an ETF may be high, and the market price of shares may not correspond to the intraday value of the underlying securities. Those are not good times to transact business. Make sure you know what an ETF's current intraday value is as well as the market price of the shares before you buy.

Is it smart to just invest in ETFs? ›

If you're looking for an easy solution to investing, ETFs can be an excellent choice. ETFs typically offer a diversified allocation to whatever you're investing in (stocks, bonds or both). You want to beat most investors, even the pros, with little effort.

Which ETF has the best 10 year return? ›

The best-performing ETF in the last 10 years was VanEck Semiconductor ETF (SMH).

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

The easiest way to invest in the S&P 500

The simplest way to invest in the index is through S&P 500 index funds or ETFs that replicate the index. You can purchase these in a taxable brokerage account, or if you're investing for retirement, in a 401(k) or IRA, which come with added tax benefits.

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.

Is it better to buy individual stocks or ETFs? ›

Stock-picking offers an advantage over exchange-traded funds (ETFs) when there is a wide dispersion of returns from the mean. Exchange-traded funds (ETFs) offer advantages over stocks when the return from stocks in the sector has a narrow dispersion around the mean.

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