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The traditional 60/40 investment portfolio recorded 13% growth in 2023, its third-best year since 2008. Investors ponder if favorable conditions in H2 of 2023 will continue in 2024.

60/40 Portfolio Bounces Back From 2022 Slump: Is It The Right Investment Strategy For 2024?

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A structurally higher inflation is currently being &#34;locked in&#34; by central banks, which will force the stock market to re-adjust to a new inflation-interest rate regime over the coming years, said Michael Hartnett, chief investment strategist at Bank of America Securities. 

BofA Strategist Says Central Banks Are Locked In High Inflation, Predicts Drop In Stock Earnings

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The traditional 60/40 investment portfolio has recorded a remarkable year of growth in 2023, sharply rebounding from a disappointing year in 2022. As of Dec. 27, the year-to-date performance of the 60/40 portfolio, benchmarked by the iShares Core Growth Allocation ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AOR#NYSE">AOR</a>), <a href="https://www.benzinga.com/money/what-is-the-60-40-investment-strategy">stands at approximately 13%. </a>
This performance figure ranks as the third-best year for the strategy since its inception in 2008, trailing only behind the strong years of 2009 and 2019.
As we enter the new year, investors are pondering whether the favorable conditions that supported both equities and bonds in the second half of the year will endure.
<h2 class="wp-block-heading">60/40 Portfolio In 2022-2023: From Downturn to Upswing</h2>
The 60/40 portfolio is a time-tested investment strategy known for its simplicity and effectiveness. It involves allocating 60% of the portfolio to stocks and 40% to bonds, with the aim to strike a balance between risk and reward.
Stocks offer the potential for higher returns but come with higher risk, while bonds generally provide lower but more stable returns. By combining both asset classes, the portfolio naturally diversifies, potentially reducing the risk of significant losses since stocks and bonds often react differently to market conditions.
In 2022, the traditional 60/40 portfolio faced one of its most challenging years due to the Fed&#8217;s aggressive interest rate hikes, which created strong headwinds for both equities and fixed-income assets.
The gauge fell as much as 17%, wiping out a sizable portion of the pandemic rally. 
An initial $1,000 investment in a 60/40 portfolio at the beginning of 2022 dipped to less than $800 by November of that year, only to rebound to its current value of $928.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="650" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/27172235/newplot-5-1.jpeg" alt="" class="wp-image-170022" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/27172235/newplot-5-1.jpeg 650w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/27172235/newplot-5-1-300x300.jpeg 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/27172235/newplot-5-1-150x150.jpeg 150w" sizes="(max-width: 650px) 100vw, 650px" /></figure>
However, as inflation subsided in 2023, traders began to anticipate a normalization of elevated interest rates, betting on the Federal Reserve reducing borrowing costs in 2024. 
Money markets currently factor in six rate cuts by 25 basis points next year, a figure substantially higher than the indications given by Federal Reserve officials at the latest meeting, with the dot-plot showing a median preference for 75-basis-point cuts. 
Read also: <a href="https://www.benzinga.com/23/08/33967223/why-the-6040-portfolio-rule-is-not-for-everyone-the-statistics-might-surprise-you">Why The 60/40 Portfolio Rule Is NOT For Everyone – The Statistics Might Surprise You</a>
<h2 class="wp-block-heading">Will the 60/40 Portfolio Continue to Rally in 2024?</h2>
Looking ahead to 2024, it remains to be seen whether the numerous rate cuts currently priced in by the market will be delivered by the Federal Reserve. 
If these rate cuts materialize, bond yields are likely to continue heading lower, benefiting fixed-income assets and potentially rate-sensitive stocks such as those in the technology, real estate, and financial sectors.
On the other hand, if the decline in inflation stalls or fresh pressures emerge, the Federal Reserve may find it inappropriate to deliver as many rate cuts as currently expected by market participants. 
This could lead to disappointment in the markets and potentially weigh on both equities and bonds.
In summary, the 60/40 portfolio has made a strong comeback in 2023, but its performance in 2024 will depend on whether the anticipated rate cuts materialize and how economic factors evolve.
<h2 class="wp-block-heading">5 Strategies to Create a 60/40 Portfolio</h2>
Aside from the iShares Core Growth Allocation ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AOR#NYSE">AOR</a>), there are several other ways for investors to construct a 60/40 portfolio. 
Here are seven different approaches an investor can use to replicate a 60/40 portfolio, with each pairing a stock ETF with a bond ETF:
<ol>
<li>S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>): Combining SPY, which tracks the S&amp;P 500 Index, with TLT, focusing on long-term U.S. Treasury bonds, offers a balanced portfolio with exposure to the U.S. stock market and the stability of government bonds.</li>
<li>Vanguard Total World Stock ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VT#NYSE">VT</a>) and iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>): VT provides global stock market exposure, while AGG tracks the U.S. Aggregate Bond Index, diversifying bond exposure.</li>
<li>iShares MSCI ACWI ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ACWI#NYSE">ACWI</a>) and Vanguard Total International Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NYSE">BNDX</a>): ACWI offers global equity exposure, and BNDX focuses on non-U.S. bonds, providing international diversification.</li>
<li>iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>) and Vanguard Total Bond Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BND#NYSE">BND</a>): Similar to SPY, IVV tracks the S&amp;P 500, and BND provides diversified exposure to the U.S. bond market.</li>
<li>Vanguard Total Stock Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTI#NYSE">VTI</a>) and Vanguard Total World Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNDW#NYSE">BNDW</a>): VTI offers exposure to the entire U.S. stock market, and BNDW provides a globally diversified bond exposure.</li>
</ol>
Read now: <a href="https://www.benzinga.com/economics/macro-economic-events/23/12/36403950/treasury-etf-and-real-estate-sector-rise-together-as-30-year-yields-dip-below-4">Treasury ETF And Real Estate Sector Rise Together As 30-Year Yields Dip Below 4%</a>
Photo: Shutterstock

A structurally higher inflation is currently being &quot;locked in&quot; by central banks, which will force&nbsp;the stock market to re-adjust to a new inflation-interest rate regime over the coming years, said Michael Hartnett, chief investment strategist at <a href="https://www.benzinga.com/topic/bank-of-america" target="_blank">Bank of America Securities.&nbsp;</a>
In his latest &quot;The Flow Show,&quot;&nbsp;Hartnett highlighted core&nbsp;inflation in major economies remained&nbsp;stubbornly high around 5%-7%, and now has risen above 3% also in Japan.&nbsp;Structurally low unemployment rates are key factors keeping pricing pressures sticky, according to the strategist.
<img alt="" src="https://www.benzinga.com/files/u1363475/uscir_2023-04-21_19-10-00_1bffa.png" style="height:500px; width:100%" />
&quot;The world of zero inflation and&nbsp;zero interest rates is fading into distant past,&quot; Hartnett says,&nbsp;as a classic balanced equity-bond portfolio&nbsp;is no longer the only way to invest.
One hundred dollars&nbsp;invested in a classic 60/40&nbsp;equity-bond portfolio &mdash;&nbsp;which can be replicated with a 60% allocation in the <a href="https://www.benzinga.com/money/vanguard-review/">Vanguard</a> Total World Stock Index Fund&nbsp;ETF (ARCA: VT) and a 40% allocation in the Vanguard Total World Bond Market Index&nbsp;Fund ETF (ARCA: BND), would now be worth&nbsp;$121, versus&nbsp;$118 in a less risky &quot;permanent portfolio&quot; comprised of a 25% equal weight in&nbsp;cash, gold, equity and&nbsp;bonds.
No Central Bank Is Truly Looking To Whip Inflation:&nbsp;Hartnett was surprised by the recent posture taken by global central banks, which are either intending to hold rates, as with the Reserve Bank of Australia and the Bank of Canada, or are close to holding rates, such as the Federal Reserve and the Bank of England.
&quot;No central bank is truly looking to&nbsp;whip&nbsp;inflation despite protestations to contrary,&quot; he wrote.&nbsp; Secular core inflation is a reason why U.S. 10-year Treasury yields are struggling to break below 3.5%, the level of the 200-day moving average&nbsp;despite&nbsp;peak CPI, peak Fed rates and impending recession&nbsp;narrative, according to Harnett.&nbsp;
EPS To Collapse In 2023: BofA Global EPS Model predicts a 16% decline in global EPS growth by this fall.&nbsp;
Hartnett stated that it was inconsistent for the S&amp;P 500 index to trade at a price-to-earnings (P/E) ratio of 20, which was the average over the past 20 years, indicating that stock valuations will decline.
No&nbsp;&quot;buy signal&quot;&nbsp;was triggered in the BofA Bull &amp; Bear Indicator despite the recent U.S. regional bank run.&nbsp;
Read Next:&nbsp;<a href="https://www.benzinga.com/markets/bonds/23/04/31937840/high-yield-corporate-bonds-are-attractive-amid-low-default-risk-in-2023-oaktree-capital" target="_blank">High-Yield Corporate Bonds Are Attractive Amid Low Default Risk In 2023: Oaktree Capital</a>
Photo: Shutterstock
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Shares of Vanguard Total World Stock Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VT#NYSE">VT</a>) saw some unusual options activity on Monday. Following the unusual option alert, the stock price moved down to $101.07. 
<ul>
<li>Sentiment: BULLISH</li>
<li>Option Type: SWEEP</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2022-02-18</li>
<li>Strike Price: $102.00</li>
<li>Volume: 218</li>
<li>Open Interest: 3</li>
</ul>
<h2>Three Ways Options Activity Is ‘Unusual'</h2>
One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. The volume of options activity refers to the number of contracts traded over a given time period. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. a buyer finding a seller, or a seller finding a buyer).
Another indicator of unusual options activity is the trading of a contract with an expiration date in the distant future. Additional time until a contract expires generally increases the potential for it to grow its time value and reach its strike price. It is important to consider time value because it represents the difference between the strike price and the value of the underlying asset. 
"Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. 
<h2>Bullish And Bearish Sentiments</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.
<h2>Trading Options With These Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Options

Unusual Options Activity Insight: Vanguard Total World Stock Index ETF

Saudi Arabian oil giant Saudi Aramco made its debut as a public company Wednesday on that country&#39;s Tadawul exchange in what was the world&#39;s largest initial public offering, one that also created the world&#39;s largest company by market value.
With a market capitalization of around $1.88 billion, the state-controlled oil company is worth more than either Apple Inc.&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>) or Microsoft Corporation&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>), the two largest American companies.
That means index providers may move swiftly to add Aramco to their benchmarks, meaning the stock could soon appear in some well-known exchange traded funds.
<h3>Why It&#39;s Important</h3>
FTSE Russell is doing just that. on Wednesday, that index provider said newly public Aramaco will join the FTSE All-World Index, FTSE Global Large Cap Index and the FTSE Emerging Markets Index on Dec. 23.
Membership in the FTSE All-World Index could get Aramco into the $12.1 billion Vanguard Total World Stock ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vt#NYSE">VT</a>), which tracks a similar FTSE index.
Inclusion in the FTSE Emerging Markets Index is even more meaningful Saudi Aramco because that&#39;s the underlying benchmark for the Vanguard FTSE Emerging Markets (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vwo#NYSE">VWO</a>), the largest ETF dedicated to developing economies, and the Schwab Emerging Markets Equity ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sche#NYSE">SCHE</a>).
Combined, SCHE and VWO have nearly $70 billion in assets under management.
<h3>What&#39;s Next</h3>
&ldquo;The investability weight of 0.47325% reflects the application of a tranching factor of 0.75 in accordance with Question 13 of the Reclassification of Saudi Arabia to Secondary Emerging Market Status,&rdquo; <a href="https://research.ftserussell.com/products/index-notices/home/getnotice?id=2594912">FTSE Russell said in a statement</a>. &ldquo;FTSE Russell notes that Saudi Aramco was subject to the 10% daily pricing limit on its first day of trading. If the pricing of Saudi Aramco is subject to the 10% daily price limit at 12pm local time on Wednesday 18 December 2019, FTSE Russell will postpone the fast entry inclusion of Saudi Aramco until after Monday 06 January 2020.&rdquo;
FTSE rival MSCI hasn&#39;t yet commented on its plans for Aramco plans, but that company is the index provider for the iShares MSCI Saudi Arabia ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ksa#NYSE">KSA</a>) and moved swiftly and effectively to add Saudi stocks to the MSCI Emerging Markets Index earlier this year.
Disclosure: The author owns shares of VWO.
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Photo credit: <a href="https://commons.wikimedia.org/wiki/File:Saudi_Aramco_oil_pipe_lines,Jubail_-_panoramio.jpg">Suresh Babunair</a>, Wikimedia

Vanguard, the second-largest U.S. issuer of exchange traded funds, is again wielding its low-cost sword.
On April 26, <a href="https://www.benzinga.com/money/vanguard-review/">Vanguard</a> said it&#39;s lowering fees on 21 of its ETFs, including its two largest funds, the Vanguard S&amp;P 500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/voo#NYSE">VOO</a>) and the Vanguard Total Stock Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vti#NYSE">VTI</a>).
<h3>What Happened</h3>
VTI and VOO are the third- and fourth-largest U.S.-listed ETFs, respectively, and are <a href="https://etfdb.com/compare/market-cap/">two of the four</a> ETFs with more than $100 billion in assets under management. The $114.79 billion VTI is now charging 0.03 percent year, or $3 on a $10,000 investment, down from 0.04 percent. The $112.94 billion VOO also saw its annual fee reduced to 0.03 percent from 0.04 percent.
Including VOO and VTI, Vanguard announced lower fees on <a href="https://investornews.vanguard/lower-expense-ratios-on-21-vanguard-etfs-means-more-savings-for-you/">eight domestic ETFs</a>. The following ETFs saw their fees reduced to 0.04 percent from 0.05 percent: The Vanguard Growth ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vug#NYSE">VUG</a>), the Vanguard Value ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vtv#NYSE">VTV</a>), the Vanguard Large-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vv#NYSE">VV</a>) and the Vanguard Mid-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vo#NYSE">VO</a>).
The Vanguard Extended Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vxf#NYSE">VXF</a>) saw its annual fee pared to 0.07 percent from 0.08 percent while the Vanguard High Dividend Yield ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vym#NYSE">VYM</a>) is charging 0.06 percent, down from 0.08 percent.
<h3>Why It&#39;s Important</h3>
As issuers have reduced fees across product lineups, international funds have steadily gotten cheaper. Nine international equity ETFs are part of the latest round of Vanguard fee reductions.
The following funds are now charging 0.09 percent, down from 0.10 percent: the Vanguard Total World Stock Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vt#NYSE">VT</a>), the Vanguard FTSE Europe ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vgk#NYSE">VGK</a>) and the Vanguard FTSE Pacific ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vpl#NYSE">VPL</a>).
The Vanguard Total International Stock ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vxus#NASDAQ">VXUS</a>) and the Vanguard FTSE All-World ex-US ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/veu#NYSE">VEU</a>) are now charging 0.09 percent, down from 0.11 percent.
The $72.16 billion Vanguard FTSE Developed Markets ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vea#NYSE">VEA</a>), the sixth-largest U.S.-listed ETF, saw its fee reduced to 0.05 percent from 0.07 percent,&nbsp;while the Vanguard FTSE All-World ex-US Small-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vss#NYSE">VSS</a>) saw a modest fee reduction of one basis point to 0.12 percent.
The Vanguard FTSE Emerging Markets ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vwo#NYSE">VWO</a>) and the Vanguard Global ex-U.S. Real Estate ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vnqi#NASDAQ">VNQI</a>) both now charge 0.12 percent annually, down from 0.14 percent. Home to $65.35 billion in assets under management, VWO is the world&#39;s largest emerging markets ETF.
<h3>What&#39;s Next</h3>
Vanguard also lowered the fees on four fixed income ETFs. The Vanguard Emerging Markets Government Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vwob#NASDAQ">VWOB</a>) now charges 0.30 percent, down from 0.32 percent. The Vanguard Total International Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bndx#NASDAQ">BNDX</a>) also a fee cut of two basis points to 0.09 percent.
The Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bnd#NYSE">BND</a>) and the Vanguard Tax-Exempt Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vteb#NASDAQ">VTEB</a>), Vanguard&#39;s first municipal bond ETF, both lowered fees by one basis point.
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Long Ideas

Trading Ideas

VNQI

Vanguard FTSE All World ex US Small Cap ETF

VTEB

VWOB

VXUS

Vanguard Drops The Hammer In ETF Fee War With 21 Price Cuts

Investors looking to nibble at ex-U.S. equities without the commitment of an international exchange traded fund can consider global funds, which typically feature large exposure to domestic stocks.
The Vanguard Total World Stock ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vt#NYSE">VT</a>) is a broad, cost-efficient option for investors looking for some international exposure while still maintaining a substantial U.S. profile.
<h3>What Happened</h3>
The $11.8 billion VT is a cap-weighted fund that holds over 8,100 stocks, giving it substantial coverage of overall global equity market capitalization. Funds in VT&#39;s category are typically cap-weighted. Though prosaic, the methodology has some advantages with large funds like VT.
&ldquo;Market-cap-weighting harnesses the market&#39;s collective wisdom, effectively mitigates turnover, and saves on trading costs,&rdquo; Morningstar said <a href="https://www.morningstar.com/articles/908822/an-outstanding-globalstock-fund.html">in a recent note</a>. &ldquo;It also keeps risk in check by emphasizing multinational firms that are large and stable, while underweighting smaller and more volatile companies.&rdquo;
While VT features exposure to mid- and small-cap stocks, the fund is dominated by large- and mega-caps, such as Apple Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>) and Microsoft Corporation&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>).
<h3>Why It&#39;s Important</h3>
Broad funds such as VT, regardless of geographic emphasis, are typically aimed at long-term investors. That said, VT&#39;s long-term performance does not necessarily exceed that of the category average, but the Vanguard funds has some other perks.
&ldquo;The fund&#39;s long-term performance has not stood out against its peers, with total and risk-adjusted returns that were similar to the category average between July 2008 and June 2018,&rdquo; according to Morningstar. &ldquo;Its active competitors were able to take advantage of superior stock selection and earned higher returns by taking on more risk.&rdquo;
One of VT&#39;s obvious benefits is cost. The fund charges just 0.10 percent per year, the equivalent of $10 on a $10,000 investment. That makes VT <a href="https://investor.vanguard.com/etf/profile/overview/vt">cheaper than 91 percent</a> of rival funds.
<h3>What&#39;s Next</h3>
&ldquo;This global portfolio eliminates the need to hold separate U.S. and international stock funds. While the split tends to hover around 50/50, it can and has diverged in the past,&rdquo; said Morningstar.
In addition to its U.S. exposure, VT allocates about a third of its weight to Europe and Asia-Pacific markets while emerging markets represent almost 10 percent of the portfolio.
Morningstar has a Silver rating on the ETF.
Related Links
<a href="https://www.benzinga.com/markets/cryptocurrency/19/01/13037075/esg-etfs-are-growing-but-still-have-a-long-way-to-go#/null">ESG ETFs Are Growing</a>
<a href="https://www.benzinga.com/markets/cryptocurrency/19/01/13037071/keeping-quality-with-junk-bonds">A Quality Junk Bond Idea</a>

Go Global With This Big Vanguard ETF

Diversification is quite possibly one of the single most powerful tools at an investor&rsquo;s disposal. Savvy investors can mitigate risk by making sure to spread out their investments across as many different economic sectors as possible. However, as the Financial Crisis proved, when the U.S. economy is on shaky ground, stocks across all sectors typically suffer.

	It can be extremely difficult to predict which economies will be impacted by economic downturns. Just a couple of years ago, China&rsquo;s economy was the envy of the world, and now it is the primary source of global concerns. In 2014 when oil prices were above $100 per barrel, few could have predicted the impact that a collapse to under $30/bbl would have on the economies of producers like Saudi Arabia less than two short years later.

	The lesson to be learned from the unpredictability of global economic conditions is that investors shouldn&rsquo;t put all their eggs in one country&rsquo;s basket, even the U.S. economy.
<h3>Invest In The World</h3>


	If you&rsquo;re looking for a great way to diversify your investments globally, <a href="https://www.stashinvest.com/blog">Stash</a>&rsquo;s &ldquo;Global Citizen&rdquo; ETF, more commonly known as the Vanguard Total World Stock (ETF) (NYSE: <a class="ticker" href="/stock/vt#NYSE">VT</a>) might be worth a look.

	The ETF is nicknamed &ldquo;Global Citizen&rdquo; because it includes shares of more than 7,000 different companies that operate in a range of sectors in 47 countries around the world.
<h3>Which Companies Are Included?</h3>


	The top holdings in the &ldquo;Global Citizen&rdquo; fund are household names for most U.S. investors, including Apple Inc. (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>), Microsoft Corporation (NASDAQ: <a class="ticker" href="/stock/msft#NASDAQ">MSFT</a>) and ExxonMobil Corporation (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>). However, the fund also has large stakes in some of the largest international companies in the world, including Nestle, Tencent and Mitsubishi.

	Not only are these names some of the most reliable blue chip companies in business today, their operations are tied to a number of different global markets.
<h3>Returns</h3>


	Diversification is all about reducing risk, but what kind of returns as &ldquo;Global Citizens&rdquo; produced? According <a href="http://www.morningstar.com/etfs/ARCX/VT/quote.html">to Morningstar</a>, over the past five years, the fund has generated a 12.9 percent return in addition to providing a level of stability and safety in a volatile global market.

	The fund also has a miniscule expense ratio of only 0.27%, meaning that investors do not lose a large part of their profits to fees and administrative costs. In fact, Vanguard reports that &ldquo;Global Citizens&rdquo; has an expense ratio that is 79% lower than the <a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0628&amp;FundIntExt=INT">average fund</a> with similar holdings.
<h3>	Takeaway</h3>


	The &ldquo;Global Citizens&rdquo; fund is one of the many &ldquo;I Like&rdquo; investments that allow investors to avoid hundreds of dollars in trading fees and invest in a wide range of stocks they like all at once by buying a single ETF.

	Disclosure: the author holds no position in the stocks mentioned.

How To Get Instant Global Diversification From A Single Investment

Stifel Nicolaus upgrades Vanguard Total World Stock ETF (ETF: VT) from Hold to Buy and announces $70.00 PT.

Upgrades

Stifel Nicolaus Upgrades Vanguard Total World Stock ETF to Buy, Announces $70.00 PT

Vanguard keeps bolstering its reputation as one of the low-cost leaders among ETF issuers. Just days after the Pennsylvania-based firm <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3363539/vanguard-pares-fees-on-high-dividend-etf">announced lower fees</a> for the popular Vanguard High Dividend Yield ETF (NYSE: <a class="ticker" href="/stock/vym#NYSE">VYM</a>), the company unveiled lower expense ratios on eight other ETFs.

Included in the new batch of fee reductions is the Vanguard FTSE Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>), which has over $60 billion in assets under management making it the largest emerging markets ETF by that metric. VWO will now charge 0.18 percent from year, down from 0.2 percent. 

At 0.18 percent, VWO now has the same expense ratio as the iShares Core MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/iemg#NYSE">IEMG</a>), the ETF rolled about by BlackRock's iShares unit in October as lower cost alternative to VWO and the iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>).

Other Vanguard ETFs that now have lower fees include the Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>) and the Vanguard MSCI Europe ETF (NYSE: <a class="ticker" href="/stock/vgk#NYSE">VGK</a>) now have expense ratios of 0.12 percent down from 0.14 percent.

The Vanguard Total International Stock Index ETF (NYSE: <a class="ticker" href="/stock/vxus#NYSE">VXUS</a>) is home to a 0.16 percent annual expense ratio compared with 0.18 percent previously while the Vanguard Total World Stock Index ETF (NYSE: <a class="ticker" href="/stock/vt#NYSE">VT</a>) is now charging 0.19 percent compared with 0.22 percent prior to the announcement.

Investors will now pay 0.32 percent per year to own the Vanguard Global ex-US Real Estate ETF (NYSE: <a class="ticker" href="/stock/vnqi#NYSE">VNQI</a>), down from 0.35 percent. The Vanguard FTSE All-World ex-US ETF (NYSE: <a class="ticker" href="/stock/veu#NYSE">VEU</a>) also saw a three-basis point fee reduction to 0.15 percent from 0.18 percent.

The Vanguard FTSE All-World ex-US Small-Cap Index ETF (NYSE: <a class="ticker" href="/stock/vss#NYSE">VSS</a>) has a new expense ratio of 0.25 percent down from 0.28 percent. 

Over the past year, Vanguard has lowered fees on 45 of its ETFs, <a href="http://www.benzinga.com/markets/bonds/12/12/3201733/vanguard-trims-fees-on-sector-etfs">including its 10 sector funds</a>.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Sector ETFs

Events

Intraday Update

IEMG

More Vanguard ETF Fee Cuts, Including VWO

Short Ideas

Specialty ETFs

Global

ACWX

First Trust Dow Jones Global Select Dividend Index Fund

Top 10 Multinational ETFs

March brings lions, lambs, ides and an entire day devoted to the consumption of adult beverages. It also brings March Madness, also known as the NCAA Basketball Tournament. The 68-team field was announced Sunday and Tuesday will bring the first game. 

March Madness is big business for advertisers and networks alike. It's also a pain in the neck for employers in scores of industries. Simply put, March Madness leads to a maddening decline in worker productivity. Last year, Challenger, Gray &amp; Christmas estimated the NCAA Tournament costs employers $1.8 billion in unproductive wages.

Recent research shows 38% of workers intend to watch a game at work. Roughly a quarter of workers surveyed said they intend to do some kind of research for their brackets while at work. And the argument can be made that workers watching games via streaming services online consumer bandwidth for non-professional purposes. 

There are bound to be some stock market winners thanks to March Madness and these ETFs might contain a few.

Market Vectors Gaming ETF (NYSE: <a class="ticker" href="/stock/bjk#NYSE">BJK</a>)
The bulk of the gambling done on the NCAA Tournament comes in the form of office pools and the like, but in case you didn't go to Harvard Law School, that type of endeavor is actually illegal. Still, Americans throw several billion per year into illegal March Madness pools. Las Vegas casinos generate an estimated $100 million in revenue thanks to the tournament. 

That's probably not going to be enough to move the needle much with BJK, but <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2353678/vegas-baby-roll-the-dice-with-gambling-etfs">there are other reasons</a> to consider this ETF. Among them: A rebounding global economy and BJK's emerging markets exposure.

PowerShares Dynamic Leisure &amp; Entertainment Portfolio (NYSE: <a class="ticker" href="/stock/pej#NYSE">PEJ</a>)
The PowerShares Dynamic Leisure &amp; Entertainment Portfolio is more heavily allocated to restaurant stocks such as Chipotle (NYSE: <a class="ticker" href="/stock/cmg#NYSE">CMG</a>), McDonald's (NYSE: <a class="ticker" href="/stock/mcd#NYSE">MCD</a>) and Yum Brands (NYSE: <a class="ticker" href="/stock/yum#NYSE">YUM</a>), but CBS (NYSE: <a class="ticker" href="/stock/cbs#NYSE">CBS</a>), the network that will broadcast many tournament games and the Final Four, is the ETF's third-largest holding at 5%. 

PEJ is up more than 13% year-to-date, but is looking over-extended and really needs to break some resistance around $21.30 to get new buyers into the game.

PowerShares Dynamic Media Portfolio (NYSE: <a class="ticker" href="/stock/pbs#NYSE">PBS</a>)
PBS should be a winner in 2012 because of <a href="http://www.benzinga.com/markets/bonds/12/03/2397324/five-defensive-etfs-your-broker-forgot-to-mention-xlp-pcy-pbs">increased election year ad spending</a> but this ETF is a fine idea for March Madness. CBS is the top holding here at almost 5.2% and PBS offers access to the other major networks as well as some of the largest cable providers as well. The ETF's biggest test isn't March Madness, but resistance at $15.

Vanguard Total World Stock Index ETF (NYSE: <a class="ticker" href="/stock/vt#NYSE">VT</a>)
The Vanguard Total World Stock Index ETF enjoyed solid performances in January and February, but the ETF hasn't impressed much to start March and if traders are spending more time watching games and filling out brackets, this is one ETF that could wilt during a time of low volume and waning interest. Sell in March and go away could be potentially damaging to VT. 

ETFS Physical PM Basket Shares (NYSE: <a class="ticker" href="/stock/gltr#NYSE">GLTR</a>)
No guarantees, but perhaps history will repeat itself. That history being a low correlation to stocks by precious metals in March 2011. ConvergEx data published following the last NCAA Tournament showed the SPDR Gold Shares (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>) and the iShares Silver Trust (NYSE: <a class="ticker" href="/stock/slv#NYSE">SLV</a>) were among the least correlated ETFs to the S&amp;P 500 in March 2011. 

GLTR offers exposure to both gold and silver along with platinum and palladium and that could make the ETF worth a look if precious metals move to the beat of their own drummer this month.

Futures

Technicals

Commodities

Previews

Pre-Market Outlook

ETFS Physical Precious Metal Basket Shares

GLTR

PowerShares ETF Leisure & Entertainment Port

ETFs For March Madness (VT, BJK, GLTR)

Vanguard, the third-largest U.S. ETF issuer, said it has lowered the expense ratios on six of its ETFs, including the Vanguard MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>). VWO, the largest emerging markets ETF, saw its expense ratio cut to 0.2% from 0.22%. The rival iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>) also pared its expense ratio earlier this year.

Vanguard also lowered the fees on the Vanguard Total World Stock ETF (NYSE: <a class="ticker" href="/stock/vt#NYSE">VT</a>) to 0.22% from 0.25%. That gives the $1.6 billion ETF fees that are lower than 85% of comparable funds, according to the Vanguard Web site. The Vanguard FTSE All-World ex-US ETF (NYSE: <a class="ticker" href="/stock/veu#NYSE">VEU</a>) now has an expense ratio of 0.18% compared with 0.22% previously. VEU, with $12.5 billion in AUM, now cheaper than 86% of comparable funds, according to Vanguard data.

The Vanguard FTSE All-World ex-US Small Cap ETF (NYSE: <a class="ticker" href="/stock/vss#NYSE">VSS</a>) saw its fees reduced to 0.28% from 0.33%. The changes for VWO, VSS, VEU and VT went into effect on February 28. 

The Vanguard Total International Stock ETF (NYSE: VXUS) now has an expense ratio of 0.18% down from 0.22%. That makes the ETF cheaper than 86% of similar funds. The Vanguard High Dividend Yield ETF (NYSE: <a class="ticker" href="/stock/vym#NYSE">VYM</a>) saw its fees lowered to 0.13% from 0.18%. VYM is now cheaper than 90% of similar funds.

The lower expense ratios for VXUS and VYM went into effect on February 27.

Vanguard isn't the only <a href="http://www.benzinga.com/news/12/02/2386498/market-vectors-pares-fees-on-hard-assets-producers-etf-hap-moo-kol">ETF sponsor to announce fee cuts</a> this week. On Wednesday, Van Eck said it lowered the expense cap on the Market Vectors RVE Hard Assets Producers ETF (NYSE: <a class="ticker" href="/stock/hap#NYSE">HAP</a>) to 0.49% from 0.59%.

Market Vectors RVE Hard Assets Producers ETF

Vanguard Lowers Fees On 6 ETFs (VWO, VXUS, VT)

Here is the ETF Professor's ETF Watch List for Wednesday September 14, 2011.

The Nasdaq is starting to look interesting, so try the ProShares Ultra QQQ (NYSE: <a class="ticker" href="/stock/qld#NYSE">QLD</a>).

The iShares Dow Jones Transportation ETF (NYSE: <a class="ticker" href="/stock/iyt#NYSE">IYT</a>) was up more than 3% on Wednesday.

Play oil with the ProShares Ultra DJ-UBS Crude Oil (NYSE: <a class="ticker" href="/stock/uco#NYSE">UCO</a>).

The Vanguard Total World Stock Index ETF (NYSE: <a class="ticker" href="/stock/vt#NYSE">VT</a>) is looking attractive on the charts.

Emerging markets plays of the day: WisdomTree India Earnings ETF (NYSE: <a class="ticker" href="/stock/epi#NYSE">EPI</a>), iShares MSCI Thailand Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/thd#NYSE">THD</a>) and the SPDR S&amp;P Emerging Europe ETF (NYSE: <a class="ticker" href="/stock/gur#NYSE">GUR</a>).

Currency play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: WisdomTree Asia Local Debt ETF (NYSE: <a class="ticker" href="/stock/ald#NYSE">ALD</a>).

New ETFs

Currency ETFs

iShares Dow Jones Transportation Average Index Fund

iShares MSCI Thailand Investable Market Index Fund

ETFs To Watch September 14, 2011

WisdomTree Trust WisdomTree SmallCap Dividend

streetTRACKS Dow Jones U.S. Small Cap Value Index Fund

streetTRACKS Dow Jones U.S. Large Cap Value Index Fund

FCNTX

iShares Trusthen & Steers Realty Majors Index Fund

iShares S&P SmallCap 600 Value Index Fund

iShares Trust Russell MidCap Value Index Fund

iShares Trust Dow Jones US Real Estate Fund Index

iShare Morningstar Large Growth Index Fund

iShares Morningstar Large Value Index Fund

iShares Morningstar Small Value Index Fund

LSVEX

PowerShares Dynamic Developed International Opportunities Portfolio

PowerShares Exchange Traded Fund Dynamic Small Cap Portfolio

PTTRX

PowerShares Exchange Traded Fund Trust Dynamic Mid Cap Value Portfolio

PowerShares Exchange Traded Fund Trust Dynamic Large Cap Value Portfolio

PowerShares Exchange Traded Fund Trust Dynamic Small Cap Value Portfolio

PowerShares Exchange-Traded Fund Trust II PowerShares FTSE RAFI Emerging Markets Portfolio

QQQQ

Rydex ETF Trust S&P Midcap 400 Pure Value ETF

Rydex ETF Trust Rydex S&P Equal Weight ETF

Rydex ETF Trust S&P Smallcap 600 Pure Value ETF