Editor’s Picks

Last updated: November 2, 2024

There's ranking by common-sense metrics (such as AUM, yield, and total returns over time), and then there are matters of the heart. OK, we're talking about ETFs as investment vehicles, so maybe not quite. Still, though, it helps to know what else is out there: for longer-term strategic reasons, or for our particular needs as investors with unique financial goals.

In alphabetical order, here are a few of our favorites and why we chose them.

1. EWA: Found and invested in for a time when we got Australia-fever and ran down the rabbit hole. We also got a bit impatient with the infrequent semi-annual dividend.
2. QUAL: As great as overall returns over time have been with S&P 500 index funds, in the back of our minds it bugged us a bit that we were effectively just buying everything that was big, willy-nilly. We sought out something with more stringent quality filters, and we found it. This is what we put our mothers' money into.
3. RSP: The amazing run of the S&P 500 index funds left us feeling a little paranoid, particularly about concentration in a few companies due to market-cap weighting. This ETF taps into the S&P 500, but with an equal weighting.
4. SGOV: Great for stashing cash equivalents without having to manage bond ladders ourselves. We're based in a high-tax state (California), and being able to get high yield that wasn't going to be eaten away by state taxes was a major pull.
5. SHV: We like this for the same reasons we like SGOV. The duration is a little longer, but still short enough we don't need to worry about excessive duration risk.
6. SPHD: This is a subset of the S&P 500, consisting of the highest-yielding and lowest-volatility stocks. We also got this because we wanted a source of yield that was plugged in to productive economic forces. As good as Treasury yields and corporate bonds have been to us, we wanted to be plugged in to payouts more directly tied to things being made, not just debt payments.
7. USHY: Amazing yield, albeit based on risky corporate bonds ("junk bonds"). We like how that risk is mitigated by the large number of holdings, so if the bonds of one particular company go awry, our overall investment is still safe. And the low cost of this ETF doesn't hurt. Careful, though: proceeds are fully taxable.
8. VOO: A venerable S&P 500 index fund, this is where we stash our cash for the long term so we don't get left behind by a thriving American economy. Sure, the yield is paltry, but we're in it for long-term capital appreciation. At least the dividends come in quarterly to keep us kind of excited.

Hopefully us talking through our reasons for liking the above ETFs get you thinking too. Good luck exploring!