Exchange traded funds (ETFs) are a great way to diversify your portfolio and gain exposure to a variety of asset classes. The ETF universe is incredibly vast, with ETFs covering virtually every sector and country. With so many ETFs to choose from, it can be difficult to determine which ones are the best for your portfolio. Fortunately, there are a few ETFs that have consistently performed well and are expected to do so in 2023.
Vanguard Total Stock Market ETF (VTI)
The Vanguard Total Stock Market ETF (VTI) is one of the most popular ETFs in the world and is a great choice for investors looking for broad exposure to the US stock market. The ETF holds more than 4,000 stocks, giving investors exposure to small, mid, and large-cap stocks across all sectors. This makes VTI a great choice for investors looking for a core holding in their portfolio. VTI has a low expense ratio of just 0.04% and has a 3-year annualized return of 19.84%.
iShares Core S&P 500 ETF (IVV)
The iShares Core S&P 500 ETF (IVV) is another popular ETF that gives investors exposure to the large-cap US equity market. The ETF holds the 500 stocks that make up the S&P 500 index, giving investors exposure to the largest and most well-known companies in the US. IVV has a low expense ratio of 0.03% and has a 3-year annualized return of 19.61%.
Vanguard FTSE Developed Markets ETF (VEA)
The Vanguard FTSE Developed Markets ETF (VEA) is an ETF that gives investors exposure to the developed markets outside of the US. The ETF holds more than 3,500 stocks in more than 20 different countries, giving investors exposure to companies in Europe, Japan, and Canada. VEA has a low expense ratio of 0.07% and has a 3-year annualized return of 11.17%.
iShares Core MSCI Emerging Markets ETF (IEMG)
The iShares Core MSCI Emerging Markets ETF (IEMG) is a great choice for investors looking for exposure to emerging markets. The ETF holds more than 3,000 stocks and gives investors exposure to countries such as China, India, and Brazil. IEMG has a low expense ratio of 0.14% and has a 3-year annualized return of 7.68%.
Vanguard Total Bond Market ETF (BND)
The Vanguard Total Bond Market ETF (BND) is a great choice for investors looking for exposure to the bond market. The ETF holds more than 8,000 bonds, giving investors exposure to a variety of different types of bonds. BND has a low expense ratio of 0.05% and has a 3-year annualized return of 2.78%.
iShares Core U.S. REIT ETF (USRT)
The iShares Core U.S. REIT ETF (USRT) is a great choice for investors looking for exposure to the real estate market. The ETF holds more than 200 real estate investment trusts (REITs), giving investors exposure to a variety of different types of real estate investments. USRT has a low expense ratio of 0.12% and has a 3-year annualized return of 8.06%.
Vanguard S&P 500 Growth ETF (VOOG)
The Vanguard S&P 500 Growth ETF (VOOG) is a great choice for investors looking for exposure to the US large-cap growth market. The ETF holds more than 500 stocks and gives investors exposure to companies that are expected to experience above-average growth. VOOG has a low expense ratio of 0.04% and has a 3-year annualized return of 21.11%.
iShares Core S&P Small-Cap ETF (IJR)
The iShares Core S&P Small-Cap ETF (IJR) is a great choice for investors looking for exposure to the small-cap market. The ETF holds more than 1,000 stocks and gives investors exposure to companies with a market cap below $2 billion. IJR has a low expense ratio of 0.07% and has a 3-year annualized return of 12.87%.
Conclusion
The ETF universe is incredibly vast, but these ETFs stand out as some of the best for 2023. VTI, IVV, VEA, IEMG, BND, USRT, VOOG, and IJR are all great choices for investors looking for broad exposure to different markets and asset classes. As always, it is important to do your due diligence and understand the risks associated with these ETFs before investing.