ETFs
3 ETFs that are crying out to buy in June
These exchange-traded funds could be the cornerstone of your portfolio.
The adage “Don’t put all your eggs in one basket” applies to many aspects of life, and investing is certainly one of them. Diversification is one of the most important things an investor can do. This can reduce risk and increase long-term return potential.
Fortunately, diversification doesn’t necessarily require selecting dozens or hundreds of individual stocks yourself. This can be done easily by purchasing stakes in a few exchange-traded funds (AND F), which provide investors with exposure to a wide range of companies in a single investment.
For those looking to add a few ETFs to their portfolio in June, the following three could be great options. Each has a different goal, so together they allow investors to cover a lot of ground.
1. Vanguard Information Technology ETF
THE Vanguard Information Technology ETF (VGT 1.40%) invests in a wide range of technology companies, from well-established companies to lesser-known emerging companies, helping to grow the technology ecosystem as we know it.
Over the past two decades, technology stocks have been the darlings of the stock market and today dominate the list of the world’s most valuable companies. Over the past decade, the valuation of many leading technology companies has exploded.
This has done wonders for the Vanguard Information Technology ETF. It has averaged an annual total return of more than 20% over the past decade, almost 8% more than S&P500the main stock market reference.
VGT Total Return Price data by Y charts.
Here’s how the Vanguard Information Technology ETF’s holdings are currently broken down by sector:
- Application software: 14.4%
- Communication equipment: 3.2%
- Electronic components: 1.3%
- Electronic equipment and instruments: 1.6%
- Electronic manufacturing services: 1.1%
- Industrial products: 0.1%
- Internet services and infrastructure: 1.8%
- IT consulting and other services: 3.6%
- Semiconductor materials and equipment: 4.4%
- Semiconductors: 27.6%
- System software: 22.9%
- Technology distributors: 0.8%
- Technology hardware, storage and peripherals: 17.3%
With its diversified exposure to innovations in the technology sector, the Vanguard Information Technology ETF can still provide investors with significant growth opportunities from there.
2. Vanguard High Dividend Yield ETF
THE Vanguard High Dividend Yield ETF (VYM -0.60%) builds its portfolio from large-cap companies that pay above-average dividends, making them an excellent choice for income driven investors. As stock prices fluctuate, a dividend-focused ETF can ensure reasonably stable cash flows and provide protection against market volatility.
The Vanguard High Dividend Yield ETF contains more than 550 companies spanning various sectors and industries.
While some market-cap-weighted ETFs can become concentrated due to the dominance of mega-cap stocks, the Vanguard High Dividend Yield ETF does a good job of maintaining a balance. Its top 10 holdings represent just over 23% of the fund. For perspective, Microsoft And Apple represent more than 32% of the Vanguard Information Technology ETF.
The Vanguard High Dividend Yield ETF’s trailing 12-month dividend yield is approximately 2.8%. That’s not an ultra-high return – some individual stocks’ payouts are much higher – but it’s more than double the average return of the S&P 500 over that time period, and that’s not too bad for an ETF with more than 550 actions.
VYM dividend yield data by Y charts.
3. Vanguard S&P 500 ETF
Few investments are as effective a one-stop shop as an S&P 500 ETF. The S&P 500 index tracks 500 of the largest public companies in the United States, so its behavior is often considered a broad indicator of the economy national.
Among the most popular S&P 500 ETFs on the market, I prefer the Vanguard S&P 500 ETF (VOO 0.23%) due to its low cost. Its expense ratio is just 0.03%, so investors’ annual fees will be just $0.30 per $1,000 invested.
I consider the Vanguard S&P 500 ETF to be a fund that investors should average cost in dollars their way, no matter what the market is doing at any given time. History has shown that, regardless of the downturns it may experience, the S&P 500 Index has consistently performed well over the long term, making funds that track it a reliable cornerstone for virtually any portfolio. of investor shares.
It also helps that this ETF has all the blue chip stocks in the American market in the lead. Although these well-established and financially stable companies are not exempt from Market Volatility or in times of economic downturn, they offer a wallet with an added level of stability and reliability. Consistent investing in an S&P 500 ETF over time has produced great results for patient investors.
Steve Walters holds positions in Apple, Microsoft and Vanguard S&P 500 ETF. The Motley Fool holds positions in and recommends Apple, Microsoft, Vanguard S&P 500 ETF, and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Mad Motley has a disclosure policy.