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Top Exchange Traded Funds (ETFs)

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Gainers

Session: May 28, 2020 4:00 pm – May 29, 2020 3:59 pm
Symbol Open Close Change Change % Volume
Buy W Stock – Trade for Free W
Wayfair
162.30 172.50 10.20 6.28% 1.50M
Buy QQQ Stock – Trade for Free QQQ
Invesco QQQ Trust, Series 1
229.99 233.32 3.33 1.45% 19.66M
Buy GLD Stock – Trade for Free GLD
SPDR Gold Trust
161.75 162.87 1.12 0.69% 5.12M
Buy VOO Stock – Trade for Free VOO
Vanguard S&P 500 ETF
278.52 280.12 1.60 0.57% 2.58M
Buy ITOT Stock – Trade for Free ITOT
iShares Core S&P Total U.S. Stock Market ETF
67.94 68.31 0.37 0.54% 95.93K
Buy SPY Stock – Trade for Free SPY
SPDR S&P 500
303.07 304.70 1.63 0.54% 38.53M
Buy SCHD Stock – Trade for Free SCHD
Schwab US Dividend Equity ETF
52.42 52.68 0.26 0.50% 91.09K
Buy PWV Stock – Trade for Free PWV
Invesco Dynamic Large Cap Value ETF
34.07 34.16 0.09 0.26% 53.00K

Losers

Session: May 28, 2020 4:00 pm – May 29, 2020 3:59 pm
Symbol Open Close Change Change % Volume
Buy IWM Stock – Trade for Free IWM
iShares Russell 2000 ETF
139.74 138.98 -0.76 -0.54% 12.63M
Buy VEA Stock – Trade for Free VEA
Vanguard FTSE Developed Markets ETF
37.72 37.69 -0.03 -0.08% 7.42M

In contrast to mutual funds, ETFs are generally known for their low fees. Ultimately, investors have flocked to ETFs in recent years (they actually arrived “on the scene” in 1993 as little-known investment options) but they’ve now become a big deal because of low costs, tax savings advantages and solid performance, as well as the fact that they’re usually centered around tracking a benchmark index.

Why is the benchmark index important? A benchmark will compare how well a fund is doing compared to its “peers,” so it gives you a point of reference for evaluating a particular fund’s success or performance.

Compare Online Brokers to Trade ETFs

JP Morgan Chase
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1 Minute Review

Chase You Invest is the retail brokerage arm of JP Morgan Chase, the largest bank in the United States. While most of the firm’s products are targeted toward wealthy clientele, You Invest gives novice investors a chance to learn about markets, select the best securities and plan for future goals like retirement. No futures, forex, or margin trading is available, so the only way for traders to find leverage is through options. 

Not all investors will appreciate the basic setup and simplistic trading suggestions, but plenty more want to learn about markets but just don’t know where to get started. Chase You Invest provides that starting point, even if most clients eventually grow out of it.

Best For
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  • Mobile traders
  • Retirement savers
Pros
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Cons
  • No forex or futures trading
  • Limited account types
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TD Ameritrade
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1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates
TradeStation
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1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Pros
  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
Cons
  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be

ETFs Explained

An exchange-traded fund, or ETF, is traded on a major stock exchange and is an investment vehicle for investors to own shares of multiple securities using a single investment. An ETF contains assets such as stocks, commodities or bonds. In general, ETFs also trade commission-free.

They’re usually also less risky because they contain a collection of stocks and bonds, ensuring diversification. In addition, professional fund managers manage the fund for you so you don’t have to waste time and effort putting together your portfolio.

Be aware, however, that some ETFs could carry with them an element of risk. For example, leveraged ETFs have been created to multiply the daily returns of an index or asset class, which brings about more risk than others which simply track an index.

How to Choose ETFs

Your personal financial goals should be a major consideration in your decision to invest in an ETF. What is your time horizon?

When will you need your money? What is your investing style? Financial situation? Knowing the answer to these questions will help you make pointed decisions regarding the ETF(s) you’ll choose and also help you devise a consciously diversified portfolio.

Vanguard has a handy tool to help you determine in which ETFs you’ll want to invest. Check out Vanguard’s asset allocation tool/investor questionnaire.

Pros and Cons of ETFs

The pros and cons of ETFs should be heavily thought out before purchase. Pros include:

  • They’re liquid. Liquidity in this case simply means that you can buy or sell at any time during the trading day. Depending on the asset class you’re invested in, one may be more liquid than another. For example, real estate is less liquid than fixed income.
  • They can be less volatile than other types of investments. If you decide to invest in an ETF that tracks a broad segment of the U.S. stock market (such as the S&P 500), this would definitely be considered less volatile than investing in straight stocks. However, be absolutely sure that the ETF you’re considering investing in stays away from volatile stock indexes since they can be volatile. If you’re interested in really low volatility, you could consider investing in an ETF that tracks a bond index.
  • They trade like stocks. ETFs can be the best of both worlds, in that they offer diversification and can be purchased on margin like stocks and you can short sell them, too. They also trade at a price that is updated throughout the day, just like stocks. You’ll get real-time pricing every time you buy and sell.
  • There’s an ETF for everyone. Depending on what you’re interested in investing in, there are several different asset classes you can choose from, including real estate, fixed income, commodities, equities, and securities, etc.
  • More tax-efficient than mutual funds. If you need to sell an ETF, you can sell it just like a stock, right? Therefore, it’s sold and done, and there is no capital gains transaction for the ETF until the fund is redeemed.

Cons:

  • They may not actually be cheaper than mutual funds. You’ll want to do your research to find out if the ETF you’re considering is as cheap as others that are similar.
  • You’ll have to pay commissions to buy shares. ETFs trade like stocks; therefore, you’ll pay a brokerage commission every time you buy or sell shares.

Why ETFs Over Stocks?

In sharp contrast to trading one single stock, an ETF can showcase a broad range of securities, offering more diversification compared to one stock. ETFs can also trade like a stock, which means that certain features of stock trading are the same as with ETFs. Here are a few of those specific features they have in common:

  • You can purchase ETFs and stocks on margin.
  • You can trade futures and options with both.
  • You’ll trade both stocks and ETFs on a stock exchange, such as NYSE.
  • Prices change throughout the day, and shares can also be shorted in the event that either a stock or ETF price begins to fall.

Despite these similarities, many choose ETFs over stocks simply because of the diversification that’s inherently available in ETFs.

Commissions and Fees Associated with ETFs

Because ETFs trade like stocks, you’ll need to pay commission to a broker every time you buy or sell shares. Most brokers charge a small fee (typically under $10) to buy or sell an ETF.

However, there are certain families of ETFs that trade commission-free and those are worth looking into. For example, Fidelity doesn’t charge commissions for a specific group of its iShares ETFs. These types of commission-free ETFs are worth looking into; however, they’re typically not the best-performing ETFs by the various brokers.

In general, it’s best to compare and research those ETFs you’re interested in and compare them to what you’d pay for regular stocks, mutual funds and more.

Best ETFs

Benzinga has compiled a list of a few of the best ETFs, and they include the following:

Gainers

Session: May 28, 2020 4:00 pm – May 29, 2020 3:59 pm
Symbol Open Close Change Change % Volume
Buy W Stock – Trade for Free W
Wayfair
162.30 172.50 10.20 6.28% 1.50M
Buy QQQ Stock – Trade for Free QQQ
Invesco QQQ Trust, Series 1
229.99 233.32 3.33 1.45% 19.66M
Buy GLD Stock – Trade for Free GLD
SPDR Gold Trust
161.75 162.87 1.12 0.69% 5.12M
Buy VOO Stock – Trade for Free VOO
Vanguard S&P 500 ETF
278.52 280.12 1.60 0.57% 2.58M
Buy ITOT Stock – Trade for Free ITOT
iShares Core S&P Total U.S. Stock Market ETF
67.94 68.31 0.37 0.54% 95.93K
Buy SPY Stock – Trade for Free SPY
SPDR S&P 500
303.07 304.70 1.63 0.54% 38.53M
Buy SCHD Stock – Trade for Free SCHD
Schwab US Dividend Equity ETF
52.42 52.68 0.26 0.50% 91.09K
Buy PWV Stock – Trade for Free PWV
Invesco Dynamic Large Cap Value ETF
34.07 34.16 0.09 0.26% 53.00K

Losers

Session: May 28, 2020 4:00 pm – May 29, 2020 3:59 pm
Symbol Open Close Change Change % Volume
Buy IWM Stock – Trade for Free IWM
iShares Russell 2000 ETF
139.74 138.98 -0.76 -0.54% 12.63M
Buy VEA Stock – Trade for Free VEA
Vanguard FTSE Developed Markets ETF
37.72 37.69 -0.03 -0.08% 7.42M

Final Thoughts on the Best ETFs

The beauty of an ETF is that there truly is something for everyone, and the other major advantage is that passively managed funds like ETFs can beat managed funds over time. If you’re interested in finding something that won’t eat up your money through expenses, or something you’d like to hold for the long term, seriously consider an ETF for your portfolio.

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