Many investors find the cost and convenience of ETF investing the best way to manage their money. One of the advantages of ETF is the fact that they can be traded or have conditional orders placed to help manage risk. Many ETFs have a robust option market with plenty of liquidity. However, many ETFs are dominated with many of the same stocks or other holdings. Here are five ETFs that can be used to provide diversification, income, and opportunity for appreciation.
Growth & Income ETF #1: Vanguard Dividend Appreciation ETF (NASDAQ: VXUS)
VXUS is a passively managed foreign large cap blend ETF that tracks the FTSE Global All Cap ex US Index. The fund is classified as a high reward, high risk investment because of its international exposure and high allocation to emerging markets.
They have an expense ratio of 0.08% and has a 3-year average annual return of 1.17% and a dividend yield of 1.89%. The investments in the fund have a 39.4% weighting to Europe, a 27.7% weighting the Pacific region and a 25.1% weighting to the emerging markets.
The fund has an average return on equity of 13.1%, a price-to-book ratio of 1.5 and an average EPS growth rate of 10%. The top three holdings of the company are Alibaba Group Holding Ltd (NYSE: BABA), Tencent Holdings Ltd (OTCMKTS: TCEHY) and Taiwan Semiconductor Manufacturing Co. Ltd (NYSE: TSM).
Growth & Income ETF #2: Schwab U.S. Dividend Equity ETF (NYSEARCA: SCHD)
SCHD is a passively managed ETF that tracks the Dow Jones U.S. Dividend 100 Index. The index tracks high-dividend-yielding U.S. stocks that have a consistent record of paying dividends.
They have an expense ratio of 0.06% and has a 3-year average annual return of 9.27% and a dividend yield of 3.12%. The investments in the fund have a 24.48% weighting to the Financials Sector, a 17.45% Industrial sector weighting and a 17.15% Consumer Staples sector weighting.
The fund has an average return on equity of 26.77%, a price-to-book ratio of 2.44 and an average market capitalization of $76.82 billion. The top three holdings of the company are United Parcel Service (NYSE: UPS), Qualcomm Inc (NASDAQ: QCOM) and Pfizer Inc (NYSE: PFE).
Growth & Income ETF #3: Vanguard Dividend Appreciation ETF (NYSEARCA: VIG)
VIG is a passively managed large cap blend ETF that tracks the performance of the NASDAQ US Achievers Select index. The fund invests in companies that have a history of growing their dividends year-over-year.
They have an expense ratio of 0.06% and has a 3-year average annual return of 11.75% and a dividend yield of 1.88%. The investments in the fund have a 22.7% weighting to the Consumer Services Sector, a 17.7% Industrial sector weighting and a 15.5% Health Care sector weighting.
The fund has an average return on equity of 23.5%, a price-to-book ratio of 4.8 and an average EPS growth rate of 8.7%. The top three holdings of the company are Microsoft Corp (NASDAQ: MSFT), Walmart Inc (NYSE: WMT) and Proctor & Gamble Co (NYSE: PG).
Growth & Income ETF #4: WisdomTree Global ex‐U.S. Quality Dividend Growth Fund (NYSEARCA: DNL)
DNL is a fundamentally weighted index that measures the performance of dividend paying companies with growth characteristics that trade in developed and emerging markets outside the U.S. The index is comprised of over 300 companies with at least a $2 billion market cap. The fundamental weighting is based on earnings growth expectations and three-year average return on equity and return on assets.
They have an expense ratio of 0.58% and has a 3-year average annual return of 8.85% and a dividend yield of 1.78%. The investments in the fund have a 13.84% weighting to Japan, a 13.14% weighting to the United Kingdom and a 12.31% weighting to Denmark.
The top three holdings of the company are Novo Nordisk A/S (NYSE: NVO), British American Tobacco Plc (NYSE: BTI) and Fortescue Metals Group Ltd (OTCMKTS: FSUGY).
Growth & Income ETF #5: Invesco Financial Preferred ETF (NYSEARCA: PGF)
PGF is invests 90% of its total assets in preferred securities on financial institutions that are tracked by the Wells Fargo Hybrid and Preferred Securities Financial Index. The preferred investments have either a fixed or floating dividend.
They have an expense ratio of 0.62% and has a 3-year average annual return of 4.79% and a dividend yield of 5.32%. The top two holdings of the company are JP Morgan Chase & Co (NYSE: JPM) with a 6% coupon rate and Wells Fargo & Co (NYSE: WFC) that pays a 4.75% yield.