SPDR S&P 500 (SPY)
Promising broad exposure to everything that the Standard and Poor’s 500 market index has to offer, the SPDR S&P 500 Trust ETF is, as the famed investor Warren Buffett always likes to say, the best way to profit on the future growth of the U.S. economy.
The fund is intended to track the performance of all companies comprising the S&P 500, and, importantly, doesn’t try to beat the index on returns by using leveraged positions or derivative securities.
The SPY fund is one of the world’s largest and most popular ETFs, with $423 billion of assets under management and an annualized 1-year market value return of 29.9%.
The investment vehicle also offers investors a cheap way to gain exposure to the S&P 500, having an enviably low expense ratio of just 0.09%.
The SPDR was the first exchange traded fund to be listed in the U.S., having launched way back in 1993. It’s still going strong today, and will no doubt be around for many more years to come.
ARK Innovation ETF (ARKK)
Cathie Wood’s ARK Innovation ETF had a stellar year in 2020: the fund grew more than 150%, and cemented its reputation as an investor favorite. But a lackluster 2021 has so far failed to replicate those gains, with the ETF clocking in a 6% loss since the start of the year.
But it’s not all doom-and-gloom for the “disruptive innovation” fund. While investor sentiment seems to be suggesting the ETF is in consolidation mode right now, the fund’s top-5 holdings are currently performing pretty well. Add to the fact that its price action is recovering well from May’s lows, and it’s not unlikely that ARKK might be over the worst of its dip.
However, it’s worth noting that the Innovation ETF does have an expense ratio at the top end of what many might consider reasonable at 0.75% – but given that the fund is actively traded by one of the hottest names on Wall Street, most investors are more than happy to pay this small premium for exposure to Cathie Wood and her select investment team.
Invesco QQQ ETF (QQQ)
If you’re interested in an index tracking fund but want something a little more exotic than just the S&P 500, then the Invesco QQQ ETF might be just what you’re looking for.
Similar to how the SPY ETF works, the QQQ fund follows the companies of the NASDAQ-100 index, which is made up of the largest non-financial companies on the Nasdaq stock exchange.
Although the NASDAQ-100 features companies from many industries – including retail, transportation, and healthcare – there is a perception that the index represents the health of the technology sector more than any other, primarily because most of its top companies, including Amazon, Apple, and Microsoft, all come from the technology world.
It’s this that makes the NASDAQ-100 a good proxy for investors looking for general exposure to a wider variety of high-performing tech stocks.
Vanguard Growth ETF (VUG)
This offering from the highly renowned stable of Vanguard Group ETFs seeks to track the CRSP U.S. Large-Cap Growth Index and, not unexpectedly, the fund has some of America’s most profitable companies on its books.
Despite being a fund with a heavy focus on generating high-performance price metrics, the Vanguard Growth ETF (VUG) is also one that packs a pretty hefty value punch too.
This should make the ETF a fairly resilient choice over the long term, while at the same time promising big profits over the shorter time-frames too.
The fund’s average 3-year returns before taxes is an impressive 23%, rising even higher to 28% over the 1-year period – making the risk-reward profile for this ETF very much in the investor’s favor.
iShares PHLX Semiconductor ETF (SOXX)
Semiconductor stocks are never out of the news right now, especially with the global chip shortage causing havoc around the world, and the fallout arising from supply chain bottlenecks putting pressure on national-level politicians.
If you think the semiconductor sector offers good investment opportunities at the present time, then BlackRock’s iShares PHLX Semiconductor ETF could be the order of the day.
With a portfolio of 30 companies that manufacture, design, and distribute semiconductor products, investors have enjoyed extraordinarily high after-tax returns of over 47%, from a fund that manages $8.7 billion of net assets.
The fund tracks the ICE Semiconductor Index (TR) and is passively managed, keeping fees low at only 0.43%.
iShares Core High Dividend ETF (HDV)
Investors who enjoy high-risk bets for high-risk rewards will like the look of iShares Core High Dividend ETF.
The fund certainly lives up to its name: designed to follow some of the best quality and most well-established U.S. stocks offering high dividend-paying returns.
The tracker ETF is a great option for income investors who want exposure to 75 premium holdings without the hassle of having to trade each of them individually or alone.
The ETF’s portfolio includes some solid dividend entries too, including AT&T, Chevron, and Exxon Mobil, whose forward dividend yields are each over 8%, 4%, and 5% respectively.
The fund is also relatively cheap to manage, with a gross expense ratio of just 0.08%, and a NAV total return of 15.97% as of November 2021.
ARK Next Generation Internet ETF (ARKW)
ARKW is another of Cathie Wood’s high-tech focused ETFs; this one seeking to capitalize on the growth opportunities presented by companies developing next-generation internet infrastructure, services and products.
Included in its remit are technologies that include cloud computing, blockchain, e-commerce and the Internet-of-Things.
As with many of ARK’s offerings, the ARK Next Generation Internet ETF presents a high-risk prospect, but with potentially big rewards.
However, so far at least, ARKW has paid off; the fund has delivered a 35.3% increase in net asset value since inception, and grew over 157% in 2020. Some of the ETF’s top holdings are major disrupters in their field, while the more “traditional“ brands, such as Tesla and Twitter, are having profitable years thus far.
Looking to the future, it seems that the ARK Next Generation Internet ETF will rely heavily on the success of its cryptocurrency-based assets to prosper, with the Grayscale Bitcoin Trust and Coinbase Global – second and third place respectively on its portfolio – having to take the slack of poorer performing stocks like Teladoc and Zoom.
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