An ETF for Every Type of Investor
These days it seems like there is an ETF for just about anything you can possibly imagine. Investors have more options available at their fingertips than ever before. No matter what kind of investor you are, or where you place your focus, there is almost undoubtedly a perfect ETF for you. Below, we outline the best fit ETF for a number of different investor types and mindsets [for more ETF news and analysis subscribe to our free ETFdb Daily Roundup]:
When it comes to active trading, investors will be hard pressed to find a better option than the S&P 500 VIX Short-Term Futures ETN (VXX). This fund offers the combination of excellent liquidity and hefty movements on a day-to-day basis, allowing the most savvy traders to turn a nice profit when they make the right call. VXX is also optionable, which unlocks even more opportunities for traders.
The Retail Investor
One of the biggest errors that a retail investor makes is trying to stock pick. In fact, studies suggest that retail investors see returns around 2.3% per year compared to the S&P 500, which averages more than 8% annually. It may sound boring to rely on a single fund for equity exposure, but finding a cheap S&P 500 fund is the building block of many successful portfolios. In that case, the Vanugard S&P 500 ETF (VOO) charges just 5 basis points for exposure to the popular index.
The Conservative Investor
Some people are just not willing to take risks with their money and want to put it in the safest place possible. For that mindset, look no further than the Enhanced Short Maturity Strategy Fund (MINT). The ETF is one of the most successful money market products that is praised for its low volatility.
The Aggressive Investor
On the flip side, some people welcome risk with open arms and can handle a fair amount of volatility. That investor will find a perfect match in the Daily Small Cap Bull 3X Shares (TNA). This fund applies a 300% leverage to small caps and is easily one of the best places to be during a bull run (though that process certainly works in reverse during a bear market).
The Income Investor
Perhaps you are an investor looking for a reliable income stream. The SuperDividend ETF (SDIV) invests in 100 equities from around the world that rank among the highest dividend yielding securities. Along with a strong dividend yield, the fund features a dividersified equity exposure across several regions and sectors.
The Conspiracy Theorist
There are a group of people that question just about everything int he modern world. One of the biggest targets of the ETF world has been GLD (and other physically-backed funds) as conspiracy theorists believe there is no gold backing the fund. In that case, you will love the Merk Gold Trust (OUNZ) which allows investors to apply for physical delivery of their gold.
The U.S. Bear
Though the U.S. economy remains the strongest in the world, there are those who feel that its time has passed and would rather not invest their money there. The FTSE All World Ex US ETF (VEU) invests in equities from all around the world (developed and emerging) while excluding U.S. exposure.
This is the investor who is just waiting for Wall Street to collapse and wants to be ready to make a profit when that happens. The Daily Small Cap Bear 3X Shares (TZA), the bear counterpart to TNA, is arguably the best option. With a -300% leverage on small cap stocks in the U.S., this fund will skyrocket should markets ever see a big correction or worse.
The World Traveler
Some investors pride themselves on spreading their allocations all around the globe, making sure to keep a diversified set of holdings. For that investor, the Emerging Markets ETF (VWO) is an excellent outlet, as this fund grants access to a handful of emerging markets equities from all around the world.
Investors looking for the “next big thing” often turn their eyes to the technology world, as they look for a major innovation that could turn into a fruitful investment. These investors are usually not afraid of some risk (as new technology is often saddled by it) and are willing to take chances. The Robo-Stox Global Robotics and Automation Index ETF (ROBO) is one of the most unique funds in that space, as it invests in robotics and other automation technologies.
The Old School Investor
Let’s face it, some investors are just stuck in their ways and refuse to get with the times. In that case, the old school investor will love the NYSE Century Portfolio ETF (NYCC) as it invests only in companies that have been incorporated in the U.S. for at least 100 years.
It’s a relatively new mentality, but environmentalism seems to be a fast-growing movement in our society. For the investor that wants to remain green, we suggest the Global Carbon ETN (GRN). This fund is designed to measure the performance of carbon-related credit plans, which are in place to limit the emissions of companies around the world.
The Indecisive Investor
Sometimes, making an investment decision can be tough and it is easy to second guess yourself. For the investor that is never quite sure if they made the right call, we recommend the S&P Equal Weight ETF (RSP). This fund invests in the S&P 500 but grants an equal weight to each component. That means a stock like Apple (AAPL) will have the same allocation as a company like Sigma-Aldrich (SIAL), so you never have to worry about having too much exposure to any one stock.
The Bottom Line
The above mentioned investment styles/mindsets are obviously just a few examples and the argument could be made for other ETFs that are equally strong fits. The underlying point being, no matter what kind of investor you are, there is most certainly an ETF that can cater to your needs and wants.
Follow me on Twitter @JaredCummans.
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Disclosure: No positions at time of writing.