This post focus on the top 10 ETFs only. A while ago, I wrote an article about ETFs “Most investors should invest ETFs tracking broader market“. Interested readers, please read this article of mine first. This article is mainly to mention some famous ETFs that I think are worth investing in. My two principles are:
- ETF listed on U.S. stock markets
- Major broad-cap indexes that track U.S. or western countries stock markets
As to why I set these two conditions, I have already explained in the previous article “Most investors should invest ETFs” , and I will not repeat them here.
Major U.S. stock market indexes
First, let’s introduce some representative major indexes of U.S. stocks market:
- Dow Jones Industrial Average (U.S. stock index ticker: DJI)
- It is the oldest surviving index today. It was the only index that represented US stocks in the era before the S&P 500 (that is, at the beginning of Buffett’s investment career).
- The constituent stocks in the index are all super-heavyweight companies, an index representing contemporary American industries. It is generally believed that the constituent stocks will be regarded as typical blue chip stocks, and almost all of them will pay dividends.
- Standard & Poor’s 500 Index ( U.S. stock index ticker: SPX)
- This is now widely accepted by investors and has the strongest influence on global stock markets.
- The companies in the index cover a wider range of industries than the Dow Jones Industrial Average. This is the main reason why the S&P 500 will replace the Dow Jones Industrial Average and become the U.S. stock market index.
- Nasdaq 100 Index (U.S. stock index ticker: IXIC)
- Its constituent stocks include most of the stocks listed on the Nasdaq, with a total of more than 3,000 stocks.
- The Nasdaq 100 Index is a representative index representing the technology industry in the US stock market. Most of the technology-listed companies that investors are familiar with will choose to list on the Nasdaq Stock Exchange.
- Russell 2000 Index (U.S. stock index ticker: RUT)
- The 2,000 listed companies with the smallest market capitalization (ranked 1001–3,000) are included.
- The market capitalization of the Russell 2000 Index accounts for only about 10% of the Russell 3000 Index, and it is regarded as an important index that best represents small stocks in the US market.
- Philadelphia Semiconductor Index (U.S. stock index ticker: SOX)
- Taiwan stocks market have more than 70% of the weighting of individual stocks related to electronic and information technology, so Taiwan investors pay special attention to this index, because the constituent stocks of the Philadelphia Semiconductor Index and Taiwan stocks are highly linked.
- This is a very peculiar phenomenon, because in contrast, American investors pay less attention to this index.
- Panic Index (U.S. stock index ticker: VIX)
- It is the trading code of the CBOE market volatility index, which is used to measure the implied volatility of S&P 500 index options.
- Often referred to as the “panic index” or “panic indicator”, it is a measure of the market’s expectations of market volatility in the next 30 days.
Top 10 ETFs
The following is what I have compiled, based on the amount of assets under management, the top 10 ETFs are:
|ticker:||Tracking target||Name||Asset under management (US$ billion)||Issuer||3 months average volume||Holding clost (%)||5 years performance (%)||10 years performance (%)|
|SPY||S&P 500||SPDR S&P 500 ETF Trust||409.78||State Street||75,021,406||0.094||100.18||452.42|
|IVV||S&P 500||iShares Core S&P 500 ETF||315.59||BlackRock||4,399,116||0.03||99.75||455.14|
|VTI||CRSP US Total Market Index||Vanguard Total Stock Market ETF||280.75||Vanguard||3,506,889||0.05||97.35||231.19|
|VOO||S&P 500||Vanguard S&P 500 ETF||268.04||Vanguard||4,889,440||0.03||100.4||416.84|
|QQQ||Nasdaq 100 index||Invesco QQQ Trust||268.04||Invesco||4,889,440||0.20||200.61||483.13|
|VEA||FTSE Developed All Cap ex US Index||Vanguard FTSE Developed Markets ETF||104.07||Vanguard||8,700,773||0.05||34.38||49.88|
|IEFA||MSCI EAFE IMI Index||iShares Core MSCI EAFE ETF||99.65||BlackRock||8,633,408||0.07||34.00||73.03|
|AGG||Bloomberg Barclays US Aggregate Bond Index||iShares Core U.S. Aggregate Bond ETF||90.89||BlackRock||5,969,250||0.04||6.7||115.07|
|VUG||CRSP US Large Cap Growth Index||Vanguard Growth ETF||77.82||Vanguard||834,456||0.04||172.39||307.72|
|VTV||CRSP US Large Cap Value IndexIndex||Vanguard Value ETF||64.81||Vanguard||2,455,009||0.04||48.83||140.18|
ETFs tracking S&P 500
From the table above, top 10 ETFs list, you can see several things:
- ETFs that track the S&P 500 index are most popular.
- The ETFs issued by BlackRock (ticker: BLK) and Vanguard(unlisted) almost monopolize the list of the most popular ETF products; especially BlackRock, which has become the heavyweight top shareholder of almost all US stocks in recent years. The reason is that BlackRock has issued a large number of popular ETF products. And BlackRock itself has become the world’s largest wealth management group by relying on ETFs.
- State Street (ticker: STT) mainly relies on the well-known ETF of SPY that tracks the S&P 500 index; similarly, Invesco (ticker: IVZ) mainly relies on tracking the NASDAQ The QQQ 100 index ETF.
Three large-cap ETFs are important
Among top 10 ETFs, two ETFs are the most important:
- SPY: is the most influential ETF among top 10 ETFs
- With a high degree of liquidity, it is also the main target for professional investors to long or short US stocks. You often see institutional investors in the media claiming to take necessary hedging operations on US stocks, and nine out of ten refer to this ETF being long or short.
- The market value has always been far ahead of other ETFs. It is the world’s highest market value and the most held ETF with the best liquidity.
- VOO: Was the best choice for long-term holding of U.S. stock market ETFs
- I have repeatedly emphasized that as long as the tracking target is the same, investors don’t need to care about the ETF issuer, just choose the one with the lowest holding cost. This file is the choice for most people to choose long-term investment in U.S. stock market ETFs.
- It is also recommended by the most professional investors (including Buffett), the long-term holding cost of ETF is very low-the famous holder includes former US Secretary of State Hillary Clinton, and the former US Federal Reserve Chairwoman, the current US Treasury Secretary Yellen.
- IVV: Rising star
- VOO are exactly the same, the only difference is that the issuer is BlackRock.
- This is what BlackRock use to break Vanguard’s most famous and long-term monopoly ETF product VOO.
- It seems that BlackRock has achieved its goal. Because of the same holding cost, IVV has become the second largest ETF in market capitalization after SPY, and VOO has now fall to fourth.
- “Most investors should invest ETFs tracking broader market“
- “S&P 500 index, the only stock worth holding forever“
- “A table comparing S&P 500, Nasdaq, Dow Jones, Philadelphia Semiconductor Index over the years since its inception and annualized returns“
- “Investors should care annualized rate of return (IRR), How to calculate?“
- “US issued ETFs tracking US market is your best bet“
- “Top 10 ETFs and important major US stock market index“
- “Disadvantages of ETF investment“
- “Any strong reason to buy mutual fund?“
- The content of this site is the author’s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.
- I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers’ direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.