ETFs
3 ETFs that are crying out to buy in June
Each of these exchange-traded funds offers something different to investors.
Many investors understand the wisdom of exchange-traded funds (ETFs). These investment vehicles offer the easy trading features and simplicity of a stock, as well as the diversification and flexibility that come with owning a professionally managed portfolio. ETFs provide access to large but targeted stock portfolios through a single ticker.
However, they are not all created equal. Although one of the benefits of investing in ETFs is reduced risk, some ETFs are still quite risky. And while some ETFs can be safe investments, they won’t maximize your investment money.
Then there are ETFs which offer a certain level of security while maximize your potential earnings. THE Invesco QQQ Trust ETFs (QQQ -0.09%), Avant-garde growth ETFs (VUG -0.10%), and Vanguard S&P 500 ETFs (VOO -0.13%) are three examples of funds falling into this category. Here’s why you might want to buy them in June.
1. Invesco QQQ Trust: AI Leads Market Gains
The Invesco QQQ Trust ETF reflects the Nasdaq-100, an index composed of 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It has outperformed the broader market over time, and it soars when the market is doing well, as it is currently.
Total return level QQQ data by Y charts.
Its main holdings are some of the world’s largest technology companies by market capitalization, and their share prices have now inflated, in part due to massive investments in artificial intelligence (AI). Nvidia, AmazonAnd Apple.
Investing in the QQQ Trust ETF diversifies your money across a small slice of high-growth stocks, allowing you to benefit from a position in each one. This way, if one fails, the others can make up for their losses.
2. Vanguard Growth ETF: Maximize the Market
The Vanguard Growth fund is more diversified than the QQQ Trust fund, but still heavily weighted toward large growth stocks. It mirrors the CRSP US Large Cap Growth Index and includes approximately 200 of the largest US-based companies by market capitalization.
Its largest holdings are similar to QQQ Trust, but they are not limited to Nasdaq-listed or non-financial stocks, so they also include stock market growth giants like Elie Lilly And Visa. Its broader diversification gives investors exposure to trends outside of technology and AI that they won’t get in a Nasdaq-100 index fund.
It has also outperformed the market for many years.
This particular Vanguard ETF also has an ultra-low expense ratio of 0.04%. As the market continues to grow, holding shares of this ETF gives investors the opportunity to profit from general trends in the U.S. economy. Specifically, if the Federal Reserve lowers interest rates, it will be felt hard in major financial stocks. That’s why buying now could benefit shareholders as the year goes on.
3. Vanguard S&P 500 ETF: Buy the Market
There is always a risk that unexpected events will harm the market – the so-called Black Swan Events that economists cannot predict (a global pandemic is a great recent example). Even events that seemed inevitable cannot be accurately predicted.
Consider today’s economy: It seems obvious that flooding the economy with stimulus money would lead to inflation and then higher interest rates. But the market failed to take this into account during its surge in 2021. It turned into a bear market and eventually rebounded, but some uncertainty remains. What happens next is anyone’s guess.
That’s why it’s so safe to put some of your money in a standard S&P 500 index fund at any time. The Vanguard S&P 500 ETF mirrors the entire S&P 500 and investing in it gives you exposure to 500 leading U.S. stocks in the market. It also has a very low expense ratio of just 0.03%, the lowest on this list and low in comparison to similar ETFs.
That’s what Warren Buffett recommends, and he’s walking his talk, with not one but two different S&P 500 index funds in the sector. Berkshire Hathaway stock portfolio.
With the economy still volatile, interest rates still high, and economists unsure of how this will all play out, having funds in an ETF that tracks the broader market is a recipe for a safe and growing investment over the long term. term. By buying now, you will have the chance to benefit from the current bull market growth.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Amazon, Apple, Berkshire Hathaway, Nvidia, Vanguard Index Funds-Vanguard Growth ETF, Vanguard S&P 500 ETF, and Visa. The Motley Fool has a disclosure policy.