Which ETFs have the highest returns?
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
| Symbol | Name | Dividend Yield |
|---|---|---|
| TSL | GraniteShares 1.25x Long Tesla Daily ETF | 95.92% |
| KLIP | KraneShares China Internet and Covered Call Strategy ETF | 61.68% |
| NVD | GraniteShares 2x Short NVDA Daily ETF | 59.39% |
| KMET | KraneShares Electrification Metals Strategy ETF | 57.51% |
- iShares (BlackRock): $2.59 trillion.
- Vanguard: $2.36 trillion.
- SPDR (State Street): $1.22 trillion.
- Invesco: $454.78 billion.
- Charles Schwab: $320.21 billion3.
| ETF | Dividend yield (trailing 12 months) | Expense ratio |
|---|---|---|
| Global X Nasdaq 100 Covered Call ETF (QYLD) | 11.6% | 0.61% |
| Amplify CWP Enhanced Dividend Income ETF (DIVO) | 4.6% | 0.56% |
| JPMorgan Equity Premium Income ETF (JEPI) | 7.9% | 0.35% |
| Global X MLP & Energy Infrastructure ETF (MLPX) | 5.2% | 0.45% |
| Fund (ticker) | YTD performance | 5-year performance |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 6.5 percent | 14.6 percent |
| SPDR S&P 500 ETF Trust (SPY) | 6.5 percent | 14.6 percent |
| iShares Core S&P 500 ETF (IVV) | 6.5 percent | 14.6 percent |
| Invesco QQQ Trust (QQQ) | 6.3 percent | 21.1 percent |
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
Key Takeaways
ETFs are less risky than individual stocks because they are diversified funds. Their investors also benefit from very low fees. Still, there are unique risks to some ETFs, including a lack of diversification and tax exposure.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.
The largest Aggressive ETF is the iShares Core Aggressive Allocation ETF AOA with $1.86B in assets. In the last trailing year, the best-performing Aggressive ETF was AOA at 21.42%. The most recent ETF launched in the Aggressive space was the iShares ESG Aware Aggressive Allocation ETF EAOA on 06/12/20.
| ETF | Assets Under Management | Dividend Yield |
|---|---|---|
| JP Morgan Nasdaq Equity Premium Income ETF (JEPQ) | $9.6 billion | 9.7% |
| iShares Select Dividend ETF (DVYE) | $670 million | 9.3% |
| iShares 20+ Year Treasury Bond Buywrite Strategy ETF (TLTW) | $889 million | 19.9% |
| Global X MLP ETF (MLPA) | $1.5 billion | 7.2% |
What ETF has 12% yield?
In fact, an ETF called the Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD), launched in 2013, currently boasts an eye-catching yield of 12%. While the ETF holds appeal for income investors, there are also several things that investors should be aware of before jumping in right after seeing that eye-popping yield.
You expose your portfolio to much higher risk with sector ETFs, so you should use them sparingly, but investing 5% to 10% of your total portfolio assets may be appropriate. If you want to be highly conservative, don't use these at all.
You can make money from ETFs by trading them. And some ETFs pay out the money the ETF makes to investors. These payments are called distributions.
The reigning king
The SPDR S&P 500 ETF Trust (SPY) remains at the forefront of S&P 500 ETFs, boasting an impressive $478 billion in assets under management (AUM). Remarkably, this ETF celebrated its 31st anniversary on January 22, 2024, coinciding with the day the S&P 500 index reached its recent all-time high.
Mutual funds and ETFs may hold stocks, bonds, or commodities. Both can track indexes, but ETFs tend to be more cost-effective and liquid since they trade on exchanges like shares of stock. Mutual funds can offer active management and greater regulatory oversight at a higher cost and only allow transactions once daily.
| Exchange-traded fund (ticker) | Assets under management | Yield |
|---|---|---|
| Vanguard 500 Index ETF (VOO) | $431.7 billion | 1.4% |
| Vanguard Dividend Appreciation ETF (VIG) | $78.2 billion | 1.8% |
| Vanguard U.S. Quality Factor ETF (VFQY) | $324.3 million | 1.3% |
| SPDR Gold MiniShares (GLDM) | $6.8 billion | 0.0% |
VOO is a broader and more diversified index fund of 500 stocks. QQQ has historically outperformed VOO by a significant margin but has higher concentration risk and volatility (measured by beta). Both funds are excellent, low-fee stock index fund options for your portfolio.
Or, you could also invest in both, for example, by putting half in VOO and half in VTI. Here's a summary of which one to choose: If you want to own only the biggest and safest stocks, choose VOO. If you want more diversification and exposure to mid-caps and small-caps, choose VTI.
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
Typically, ETFs are required to hold investment assets in a trust account and therefore in the event of a bankruptcy creditors can not access the funds. What happens is that a windup occurs, the shares/investments are sold off and returned to the investors.
Can you lose more money than you invest in ETFs?
Yes, you could. The underlying assets owned by the ETF could become worthless. Literally worthless is not likely, but the ETF will change in value as the underlying portfolio. An ETF does not go up in price when bought like a stock.
For most standard, unleveraged ETFs that track an index, the maximum you can theoretically lose is the amount you invested, driving your investment value to zero. However, it's rare for broad-market ETFs to go to zero unless the entire market or sector it tracks collapses entirely.
Aim for around 10 to 20 diversified ETFs that align with your goals and risk tolerance. There is no fixed number of ETFs that can be classified as “too many” as it ultimately depends on an investor's individual goals, risk tolerance, and investment strategy.
How many ETFs are enough? The answer depends on several factors when deciding how many ETFs you should own. Generally speaking, fewer than 10 ETFs are likely enough to diversify your portfolio, but this will vary depending on your financial goals, ranging from retirement savings to income generation.
ETFs have a low hurdle to invest
Also, it doesn't take much to construct a balanced portfolio. You can put $500 in a stock ETF and $500 in a bond ETF to achieve a diversified two-asset-class portfolio which, though simple, can be a great start toward building a portfolio appropriate for your goals.
