Some investors are more embracing of mutual funds than others. Those less embracing flinch from the higher fees (a false objection, in my never humble opinion, for mutual funds with a history of superior performance). The lack of liquidity is another objection. Mutual funds are bought and sold after the market close. One is unable to buy and sell a mutual fund on the fly during the trading day.
Exchange-traded funds (ETFs) are the conspicuous alternative.They offer immediate diversification like a mutual fund. They do so at a lower cost. ETFs are tradable during the trading day. The choices, as with mutual funds, are extensive (though not as extensive as mutual funds).
Have I considered an investment portfolio of ETFs similar to my mutual-fund recommendation? Well, I had not, until a few e-mails arrived asking if I had.
Ask and ye shall receive.
I have not only considered a portfolio constructed of ETFs, I have constructed a portfolio of said recommendations. The portfolio is no Xerox copy of the referenced mutual-fund portfolio: The mutual funds are actively managed, the ETFs are representative of a benchmark index. I categorize and allocate the ETFs differently, but the spirit of the allocation is similar to the mutual-fund allocation.
I offer my ETF portfolio for your consideration, and as with the mutual-fund portfolio, I offer my recommended allocation.
- Vanguard Information Technology ETF (VGT) (12.5% Allocation)
- iShares Morningstar Small-Cap Growth ETF (JKK) (12.5% Allocation)
Aggressive Growth Segment:
- Renaissance IPO ETF (IPO) (12.5% Allocation)
- Ark Innovation ETF (ARKK) (12.5% Allocation)
Growth & Income Segment:
- Vanguard Dividend Appreciation ETF (VIG) (12.5% Allocation)
- Schwab US Dividend Equity ETF (SCHD) (12.5% Allocation)
- EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ) (12.5% Allocation)
- iShares MSCI International Quality Factor ETF (IQLT) (12.5% Allocation)
As always, past performance is no guarantee of future performance, but the data show it's frequently smart to bet as if it is. That said, ensure your comfortable with the ETFs and the allocations I recommend before you make your move. Always remember that only you can serve as final arbiter because only you bear the consequences of your actions. I'm only the teacher.