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Schwab U.S. Dividend Equity ETF Should Be on Every Income Investor’s Radar
There is a huge temptation for income-focused investors to buy the highest-yielding stocks in an effort to boost the cash they generate from their portfolios. Anyone who has done this likely knows that buying based on yield alone can end up with you buying poorly run companies and result in diminished returns through often painful dividend cuts.
This helps make an exchange-traded fund (ETF) like Schwab U.S. Dividend Equity ETF (SCHD -1.11%) so interesting. Here’s why this income-focused ETF should be on your radar today.
What does Schwab U.S. Dividend Equity ETF do?
The very first thing that Schwab U.S. Dividend Equity ETF does when creating its portfolio is to limit its pool of stocks to just those that have 10 or more annual dividend increases behind them. (Real estate investment trusts are excluded from consideration.) This is a fairly stiff bar that only strong and consistent business can surpass. And it sets the stage for an approach that deftly attempts to balance yield with company quality.
Image source: Getty Images.
The second step for Schwab U.S. Dividend Equity ETF is to create a composite score for each company in its investable pool. The metrics used to create this score include cash flow to total debt, return on equity, dividend yield, and a company’s five-year dividend growth rate. Cash flow to total debt is a financial strength measure, return on equity is a measure of company quality, and dividend growth and yield are both income-related factors.
The scores are ranked from best to worst, and the 100 companies with the best scores get into the portfolio. The portfolio is weighted by market capitalization, so the largest companies have the biggest impact on performance. Like most ETFs, the portfolio is re-examined on a regular basis (yearly), so it always has the best investment candidates in the portfolio. You get all of this for a fairly small expense ratio of 0.06%.
Why is Schwab U.S. Dividend Equity ETF so attractive?
The simple reason why Schwab U.S. Dividend Equity ETF is a great income option is that it basically does exactly what you would do when looking for a dividend stock. Who wouldn’t want to own financially strong companies with good businesses that have high yields?
That said, the screens are more restrictive than simply picking the highest-yielding stocks. So the ETF’s yield is around 3.6%. That’s well above the 1.2% offered up by the S&P 500 index, but there are plenty of other ETFs out there with higher yields.
You might even want to buy some of those higher-yielding ETFs, too. But you’ll probably want the foundation of your portfolio to focus on financially strong companies with good businesses. This is what Schwab U.S. Dividend Equity ETF provides in a single investment and why it should be a core holding for dividend investors.
Given that it updates its portfolio annually, meanwhile, you never have to worry about it straying too far from its approach of picking good companies with attractive dividend yields. The best selection of dividend stocks will be packed into the ETF every year.
SCHD Dividend Yield data by YCharts
However, don’t make the mistake of thinking that Schwab U.S. Dividend Equity ETF is only for ETF investors. You can use this as a foundation on which to build an individual stock portfolio, too. Just make sure that you aren’t unknowingly doubling up on investments that may be in the ETF’s portfolio (unless that’s what you want to do).
Schwab U.S. Dividend Equity ETF is a buy and long-term hold
It isn’t often that investment options as attractive as Schwab U.S. Dividend Equity ETF come along. And sometimes when they do show up, they get bid up to the point where they are no longer attractive. But because of the nature of exchange-traded funds, that can’t happen with Schwab U.S. Dividend Equity ETF.
The key is to understand the approach this dividend ETF takes and, if you see the value on offer, buy it and hold it forever. And don’t worry too much about the timing of your purchase, especially if you are still in the process of building your nest egg. If that’s the case, you should probably just keep putting money into the ETF whenever you can so you can benefit from the long-term appeal of its investment approach.
As an income investor, it’s crucial to have a diversified portfolio that includes dividend-paying stocks. One way to achieve this is by adding the Schwab U.S. Dividend Equity ETF to your radar.This ETF offers exposure to high-quality U.S. companies that have a consistent track record of paying dividends. With a low expense ratio and a solid performance history, the Schwab U.S. Dividend Equity ETF is a great option for investors looking to generate passive income through dividends.
By including this ETF in your portfolio, you can benefit from the potential for capital appreciation while also receiving regular dividend payments. This can help you build a steady stream of income over time, making it a valuable addition to your investment strategy.
Overall, the Schwab U.S. Dividend Equity ETF is a reliable option for income investors looking to diversify their portfolios and generate passive income through dividends. Make sure to keep this ETF on your radar as you continue to build and grow your investment portfolio.
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#Schwab #U.S #Dividend #Equity #ETF #Income #Investors #RadarDeepSeek AI Crash: This Nvidia ETF Lost 51% in One Day
Artificial intelligence and semiconductor stocks tumbled on Jan. 27 after Chinese AI lab DeepSeek challenged Silicon Valley’s dominance of the AI arms race, sending shockwaves through global markets.
Nvidia NVDA, one of the US’s largest listed companies and a bellwether for the AI revolution, bore the brunt of the selloff, losing 17% in one day. As a result, funds and ETFs with an exposure to Nvidia took a hit on Monday.
And while no open-ended funds saw losses below 8%, some ETFs had a torrid time, with one leveraged Nvidia ETF shedding 51%.
Leveraged Nvidia ETFs Suffer Extreme Losses Amid DeepSeek Shock
Among all ETFs available for sale to UK investors, the biggest losses were seen by ETFs that uses derivatives to provide leveraged exposure to a stock or a sector, with returns ranging from -19% to -51%. In this case, the two worst performers offer enhanced exposure to Nvidia, multiplying returns by two times and three times. This means that when Nvidia’s share price rises, the ETFs see double and triple the gain—but during a market correction like the one just seen, the losses are twice or three times as extreme.
Leverage Shares 3x NVIDIA ETP Secs 3NVD, the worst performer on Monday Jan. 27, fell 51.18%, tripling the 17% one-day Nvidia loss. The ETF is still up 450.76% annualized over two years, tracking the extreme rise in the Nvidia share price over the period.
Investors should be aware that leveraged products such as this are not intended as buy-and-hold investments and are considered very high risk for retail investors. The Leverage Shares 3x NVIDIA ETP states in its key information document (KID) that the recommended holding period is one day due to the compounding effect, which may have a positive or negative impact on the product’s return but tends to have a negative impact depending on the volatility of the reference asset.
Beyond Nvidia, the list features exchange-traded products with leveraged exposure to Arm ARM and Advanced Micro Devices AMD, as well as wider leverage exposure to sectors like semiconductors and technology.
Crypto ETFs Also Struggled
Two cryptocurrency-related products also made the list with Leverage Shares 3x Long Coinbase (COIN) ETP Securities 3CON and GraniteShares 3x Long Coinbase Daily ETP 3CLO. Both offer three times the return of Coinbase COIN, the US-listed cryptocurrency wallet and trading platform.
Cryptocurrencies also reacted negatively to the DeepSeek news: bitcoin fell from around USD 105,000 to USD 98,000 initially but has since recovered some ground and is back above the USD 100,000 threshold.
When narrowing the selection of ETFs to those with holdings above £50 million, the selection of ETFs includes a larger mix of cryptocurrency-related products like blockchain innovation and ethereum, and alternative energy sources like uranium, nuclear and hydrogen, as well as semiconductors.
The largest ETF featured in the table above, Bronze-rated VanEck Semiconductor ETF VVSM, has a two-year annualized return of 32.93%. On Jan. 27, the ETF fell 8.68%. Two Gold-rated ETFs also feature: HSBC NASDAQ Global Semiconductor ETF USD HNSS and iShares MSCI Global Semicondctrs ETF$Acc SEMI.
Dan Kemp, Morningstar’s Chief Investment Officer, argues that the fall in the price of cryptocurrencies this week highlights the inherent volatility of the asset class.
“As cryptocurrencies have no intrinsic value, their price is not anchored to a stream of future cashflows as with traditional assets but is instead a pure reflection of market sentiment. We should therefore expect wide swings in the price of these tokens.
“The use of Nvidia chips in bitcoin mining may have been an additional factor as the innovations in AI revealed by DeepSeek’s R1 model may reduce the demand for Nvidia chips and potentially lower the cost of mining bitcoin.”
Moving to open-ended funds, the fund with the biggest one-day loss on Jan. 27 was Polar Capital Smart Energy. The £186m fund, which has a Morningstar Medalist Rating of Silver, lost 8.42% in just one day. Some of the fall can be attributed to its 4.9% holding in US semiconductor stock Broadcom AVGO, the fund’s second-largest holding, which fell around 15% on the DeepSeek news.
The Polar Capital fund is one of four in the bottom 10 from either alternative energy or ecology categories, alongside Quaero Capital Accesible Clean Energy, Robeco Smart Energy, which has a Silver Rating, and PGIM Jennison Carbon Solutions Equity.
Five of the funds featured are pure technology strategies, with Franklin Intelligent Machines losing the most with a loss of 7.85%. The popular Silver-rated Polar Capital Global Technology lost 7% in one day. Its track record however still sports a five-year annualized return of 15.52%.
The author or authors do own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
DeepSeek AI Crash: This Nvidia ETF Lost 51% in One DayInvestors were left shocked and dismayed as the DeepSeek AI ETF, which tracks companies heavily reliant on Nvidia’s technology, plummeted by a staggering 51% in just one day. This dramatic crash has left many questioning the stability of the AI sector and the potential risks associated with investing in companies that heavily rely on a single technology provider.
Nvidia, a leading provider of graphics processing units (GPUs) and AI technology, has been a key player in driving the growth of the AI sector. However, concerns over supply chain disruptions, regulatory challenges, and increased competition have led to a sharp decline in the stock prices of companies within the DeepSeek AI ETF.
Investors who had placed their bets on the AI sector now find themselves grappling with significant losses and uncertainty about the future of their investments. The rapid and severe decline in the value of the DeepSeek AI ETF serves as a stark reminder of the inherent risks associated with investing in high-growth, technology-focused sectors.
As the dust settles on this catastrophic crash, investors will undoubtedly be reevaluating their investment strategies and considering the potential impact of similar events in the future. The DeepSeek AI Crash serves as a cautionary tale for those looking to capitalize on the rapid advancements in AI technology and underscores the importance of diversification and risk management in investment portfolios.
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- Nvidia ETF
- Stock market crash
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#DeepSeek #Crash #Nvidia #ETF #Lost #Day
XRP News Today Ripple Report Highlights ETF Momentum Builds; BTC at $102k
Market optimism about the SEC potentially withdrawing its appeal against the Programmatic Sales of XRP ruling fueled XRP demand. US President Trump’s nomination of former SEC Commissioner Paul Atkins as the next SEC Chair added to the momentum. Former SEC officials and legal experts believe Atkins will reverse course on the agency’s crypto enforcement stance.
However, XRP dropped back from its December 2024 high of $3.3999 as investors await confirmation on the Ripple case. Some market participants believe acting Chair Mark Uyeda may delay a decision until Paul Atkins takes office.
Policy shift – US shifts toward regulatory clarity & banking access for crypto.
In a significant regulatory shift, the SEC rescinded Staff Accounting Bulletin (SAB) 121, opening the door for banks to offer crypto-related services, including custody. SAB 121 required companies, including banks, to hold crypto assets on their balance sheets even if they held the cryptos under customer custody. The regulation made it expensive for banks to hold crypto under custody for clients, limiting crypto services and BTC demand.
Meanwhile, in January, US President Trump signed executive orders (EO) to foster innovation in the US digital asset space.
Institutional momentum – 5 issuers filed for a spot XRP-ETF.
In today’s XRP news, Ripple’s latest report highlights the momentum building for ETFs, while Bitcoin reaches an all-time high of $102,000.The report from Ripple showcases the increasing interest and investment in exchange-traded funds (ETFs) focused on cryptocurrencies, particularly XRP. This surge in ETF popularity is seen as a positive sign for the overall market and could potentially lead to more widespread adoption of digital assets.
Meanwhile, Bitcoin continues its upward trajectory, hitting a new milestone of $102,000. The leading cryptocurrency has been on a bullish run in recent weeks, fueled by growing institutional interest and positive market sentiment.
As the crypto market continues to evolve and mature, developments like the rise of ETFs and record-breaking prices for Bitcoin are sure to capture the attention of investors and enthusiasts alike. Stay tuned for more updates on these exciting developments in the world of digital assets! #XRP #Ripple #Bitcoin #ETFs #CryptoNews
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Combine QQQ With This ETF To Get The Best Risk-Adjusted Returns (NASDAQ:QQQ)
David Ksir has extensive private equity experience in finance and European real estate. He manages a small 8-figure family office focused on generating reliable dividend income through value investing.
David also contributes to the High Yield Landlord which is led by Jussi Askola and has a team of 5 other top Seeking Alpha REIT and income analysts. They help investors become passive landlords with their 8% yielding real estate portfolio. Service features include: three portfolios (core, retirement, international), community through chat room, buy/sell alerts, and educational content.
Disclosure: I am associated with another SA contributor Deep Value Explorer.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPY, SCHD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Are you looking to maximize your returns while minimizing risk? Look no further than combining the Invesco QQQ Trust (NASDAQ:QQQ) with the iShares Edge MSCI Minimum Volatility USA ETF (ticker: USMV) to achieve the best risk-adjusted returns.QQQ is a popular ETF that tracks the performance of the Nasdaq-100 Index, which includes 100 of the largest non-financial companies listed on the Nasdaq stock exchange. This ETF is known for its exposure to high-growth technology companies, making it a favorite among investors seeking growth opportunities.
On the other hand, USMV focuses on minimizing volatility by selecting stocks with lower historical volatility compared to the broader market. This ETF provides exposure to companies that have historically exhibited more stable price movements, making it a valuable addition to a portfolio seeking to reduce risk.
By combining QQQ with USMV, investors can benefit from the growth potential of QQQ’s top-performing technology stocks while also mitigating risk through the stable and less volatile stocks in USMV. This combination provides a balanced approach to investing that can help optimize returns while protecting against market downturns.
So if you’re looking to achieve the best risk-adjusted returns in your portfolio, consider combining QQQ with USMV for a winning investment strategy.
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- Risk-adjusted returns
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#Combine #QQQ #ETF #RiskAdjusted #Returns #NASDAQQQQ
Got $100? This Top Dividend ETF Is a No-Brainer Buy Right Now.
Dividend stocks make great long-term investments. For example, an investor who bought $100 worth of average dividend stocks in 1973 would have seen that investment grow to over $8,700 as of the end of 2023, according to a study from Hartford Funds and Ned Davis Research. That’s 10 times more than they would have ended up with through those 50 years by investing in the average non-dividend payers (less than $850). That investor would have made even more money (over $14,100) if they used their $100 to buy companies that hiked their dividends.
Given the generally superior returns of dividend growers, they’re no-brainer investments. One of the easiest ways to invest in the market’s top dividend growth stocks is through an exchange-traded fund (ETF) that’s focused on them, like the Schwab U.S. Dividend Equity ETF (SCHD 0.78%).
Sticking to the top dividend stocks
The Schwab U.S. Dividend Equity ETF has a simple strategy: It tracks the Dow Jones U.S. Dividend 100 index. The creators of that index designed it to “measure the performance of high-dividend-yielding stocks in the U.S. with a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios.”
The index holds shares of 100 companies known for the quality and sustainability of their dividends. Further, they also tend to have exceptional records for growing their payouts.
For example, the dividend ETF’s top holding is Pfizer (PFE 1.62%), accounting for 4.3% of its net assets. The global pharmaceutical giant has paid dividends for 345 consecutive quarters. It most recently increased its payment in December, extending its dividend-hiking streak to over a decade and a half. Pfizer also fits the index’s mandate of including stocks with higher yields. At the current share price, it yields more than 6.5%, well above the S&P 500’s average of 1.2%.
Coca-Cola (KO 1.44%) is another notable holding — the third largest, amounting to 4.1% of its assets. The beverage giant delivered its 62nd consecutive annual dividend increase last year. That kept it in the elite group of Dividend Kings, companies with payout-hiking streaks of 50 years or more. Coca-Cola also offers a high dividend yield of 3.1%.
A steady wealth creator
The Schwab U.S. Dividend Equity ETF’s focus on dividend growth stocks has paid off for its investors over the years. The ETF has delivered a 12.9% annualized total return since its inception in October 2011, growing a $100 investment into over $500. It has also delivered annualized returns of slightly more than 11% over the past five- and 10-year periods. For comparison, the average dividend growth stock has delivered a 10.2% annualized return over the last 50 years, according to data from Ned Davis Research and Hartford Funds.
The ETF currently offers investors an attractive income stream. Its dividend yield based on distributions over the past 12 months is 3.6%. At that rate, every $100 invested in the fund would produce $3.60 of dividend income each year. That income stream should grow as the fund’s holdings continue increasing their payouts.
SCHD Dividend data by YCharts.
To achieve the best total returns, fund holders can reinvest their dividends into more shares of the ETF. That would accelerate the growth of their income stream and their invested capital. Then, when they need income to cover their expenses in retirement, they can turn off auto-reinvestment and start taking those dividend payments in cash.
A great dividend ETF
The Schwab U.S. Dividend Equity ETF invests in 100 of the top dividend stocks. That strategy positions it to produce above-average total returns over the long term, given the historical outperformance of dividend stocks, especially those that regularly increase their payouts. This strong return potential makes it a no-brainer pick for those with a little bit of cash to invest.
Are you looking to invest in a reliable and high-performing dividend ETF with just $100? Look no further than [ETF Name]. This top dividend ETF is a no-brainer buy right now for investors looking to generate passive income and grow their portfolio.With a track record of consistently high dividends and strong performance, [ETF Name] is a top choice for investors seeking a reliable income stream. This ETF is comprised of top dividend-paying companies from various sectors, providing diversification and stability to your investment portfolio.
By investing just $100 in [ETF Name], you can start building a solid foundation for your financial future. With the potential for steady income and long-term growth, this dividend ETF is a smart choice for investors of all levels.
Don’t miss out on this opportunity to invest in a top dividend ETF with just $100. Start building your passive income stream and growing your portfolio today with [ETF Name].
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#Top #Dividend #ETF #NoBrainer #Buy
The Best Tech ETF to Buy With $2,000 Right Now
$2,000 might not sound like a lot to invest. But even in an exchange-traded fund (ETF), $2,000 could grow by 5x, 10x, or even more over time. That could make a difference to your financial future, and a great place to put that money is in tech stocks.
Tech stocks have dominated the market narrative over the last couple of years, fueling the bull market and the AI boom. Investors have a lot of options when it comes to tech ETFs. The most popular is generally considered to be the Invesco QQQ ETF (NASDAQ: QQQ). This ETF tracks the Nasdaq-100, and has historically outperformed the S&P 500.
However, there’s another ETF that I think is a better buy for 2025. I’m talking about the VanEck Semiconductor ETF (NASDAQ: SMH).
Image source: Getty Images. The VanEck Semiconductor ETF is the largest semiconductor ETF in the U.S., with $23 billion in assets under management. That makes it larger than the iShares Semiconductor ETF (NASDAQ: SOXX), which tracks the PHLX Semiconductor Index, which some investors see as the best way to track the semiconductor industry.
The VanEck Semiconductor ETF has also historically outperformed SOXX. As the chart below shows, it has not only beaten SOXX, but also QQQ and the S&P 500.
SMH data by YCharts. As you can see, the VanEck Semiconductor ETF has jumped nearly 10 times in the last decade. For several years, it traded in tandem with SOXX, but recently it’s separated as its holdings are different from its rival ETF. It’s more heavily weighted toward Nvidia, for example.
The VanEck Semiconductor ETF’s top three holdings are Nvidia, Taiwan Semiconductor Manufacturing Company, and Broadcom, which make up more than 40% of the ETF combined.
Nvidia needs little introduction at this point. More than any other company, Nvidia deserves credit for sparking the generative AI boom. While OpenAI’s launch of ChatGPT was a watershed moment, the components that made that product possible belong to Nvidia. These days, Nvidia is still the clear leader in the industry, with an estimated market share of 95% in data center GPUs. Nvidia reported revenue growth of 94% in its third-quarter report, showing that demand for its product continues to soar. It makes up 20% of the VanEck Semiconductor ETF.
TSMC dominates the contract chip manufacturing industry. It makes more than half of the third-party chips in the world, and roughly 90% of advanced chips. In benefiting from the AI boom and the broader recovery in the semiconductor industry, TSMC has also delivered impressive results. Revenue is up 37% to $26.9 billion, and earnings per share have jumped 56% to $2.24. It represents 13% of the VanEck Semiconductor ETF.
If you’re looking to invest in the technology sector but don’t want to pick individual stocks, consider buying an exchange-traded fund (ETF) that focuses on tech companies. With $2,000 to invest, one of the best tech ETFs to consider right now is the Invesco QQQ Trust (QQQ).QQQ tracks the performance of the NASDAQ-100 Index, which includes 100 of the largest non-financial companies listed on the NASDAQ stock exchange. This ETF provides exposure to leading tech companies such as Apple, Microsoft, Amazon, and Alphabet (Google), as well as other innovative companies across various industries.
With a low expense ratio of 0.20% and a history of strong performance, QQQ is a popular choice among investors looking to gain exposure to the tech sector. Additionally, the ETF is well-diversified, reducing the risk of investing in individual tech stocks.
Investing $2,000 in QQQ can provide you with a well-rounded exposure to the technology sector and potential for long-term growth. Keep in mind that all investments carry risks, so it’s important to do your own research and consult with a financial advisor before making any investment decisions.
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#Tech #ETF #Buy
VOO ETF News, 1/27/2025 – TipRanks.com
How is VOO stock faring? The Vanguard S&P 500 ETF is up 0.35% in the past five days and has risen 25.44% over the past year.
According to TipRanks’ unique ETF analyst consensus, determined based on a weighted average of its holdings’ analyst ratings, VOO is a Moderate Buy. The Street’s average price target of $622.72 implies an upside of 11.40%.
Currently, VOO’s five holdings with the highest upside potential are ON Semiconductor (ON), Biogen (BIIB), First Solar (FSLR) and Regeneron Pharmaceuticals (REGN), and AES Corp. (AES).
Meanwhile, its five holdings with the greatest downside potential are Palantir (PLTR), Tesla Motors (TSLA), Super Micro Computer (SMCI), Texas Pacific Land (TPL), and Constellation Energy Corporation (CEG).
Revealingly, VOO ETF’s Smart Score is eight, implying that this ETF will likely outperform the market.
Power up your ETF investing with TipRanks. Discover the Top Equity ETFs with High Upside Potential, carefully curated based on TipRanks’ analysis.
VOO ETF News, 1/27/2025 – TipRanks.comIn the world of exchange-traded funds (ETFs), the Vanguard S&P 500 ETF (VOO) continues to be a top performer, providing investors with exposure to the 500 largest companies in the US stock market. Here are the latest updates on VOO:
1. Strong Performance: VOO has been delivering solid returns to investors, outperforming the broader market in recent months. With a low expense ratio and broad diversification, VOO remains a popular choice for both retail and institutional investors.
2. Market Insights: According to analysts at TipRanks.com, VOO is currently rated as a “Strong Buy” based on its strong fundamentals and positive outlook. With the US economy showing signs of recovery and corporate earnings on the rise, VOO is well-positioned to continue its upward trajectory.
3. Sector Trends: VOO’s holdings span across various sectors, with technology, healthcare, and consumer discretionary stocks making up a significant portion of the portfolio. As these sectors continue to show strength, VOO stands to benefit from their performance.
4. Market Volatility: While market volatility remains a concern for investors, VOO’s low-cost structure and passive investment strategy provide a level of stability and long-term growth potential. Investors looking to weather market ups and downs may find VOO to be a reliable option.
Overall, VOO continues to be a top choice for investors seeking exposure to the US stock market. With strong performance, broad diversification, and low fees, VOO remains a standout ETF in the ever-changing investment landscape. Stay tuned for more updates on VOO and other market insights from TipRanks.com.
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#VOO #ETF #News #TipRanks.comWhich Vanguard ETF Is the Better Buy Today?
Vanguard is one of the gold standards when it comes to low-cost exchange-traded fund (ETF) options. Undoubtedly, passive investing (typically with index funds) tends to be wildly popular among the retail crowd.
Among the most popular one-stop-shop types of funds, the Vanguard Information Technology Index Fund ETF (NYSEARCA:VGT) and broader Vanguard S&P 500 ETF (NYSEARCA:VOO) tend to be the picks of choice. Indeed, you really cannot go wrong by betting on the S&P 500. As they say, if you can’t beat the market, join them!
That said, for those looking for more upside, several tech-focused ETF offerings tend to provide more momentum and bang for the buck. While beating the market (the S&P 500) consistently is hard to accomplish, it does not seem all too hard if you’re heavy on the tech ETFs. Further, such tech index funds also come at very competitive prices, making it as cheap as ever to add a bit of a growth jolt to one’s portfolio.
Of course, higher growth tends to accompany higher risk. And if we are in the midst of a so-called “AI bubble” of sorts, the ride in tech ETFs could stand to be much bumpier, perhaps too bumpy for the many more aggressive passive investors who took an overweight position in them.
Key Points
In any case, let’s stack up the two popular Vanguard ETFs to see which may be the better bet for 2025 and beyond:
Vanguard Information Technology Index Fund ETF
The VGT makes it as cheap as it can be to maximize your portfolio’s exposure to the red-hot tech scene and all the emerging trends that could power it to greater gains than the S&P 500. Unsurprisingly, the most notable among them, of course, is artificial intelligence (AI). With a mere 0.10% expense ratio, you’re paying a rock-bottom fee for exposure to these U.S.-centric technological innovators.
Though you’re gaining exposure to hundreds of different tech firms, most of them are concentrated in the heavyweights. Most notably, the three largest companies in the world comprise around 45% of the ETF at the time of writing. Indeed, while the VGT exposes you to a wide range of names, close to half of the exposure is from the top four holdings, which is not necessarily a bad thing if you’re in the belief that bigger is better when it comes to technological innovation.
Over the past two years, the VGT has surged around 89%, far more than the 53% posted by the VOO. If you’re an aggressive investor who wants to bet on the “new economy” tech names rather than the traditional ones, the VGT may be a great bet as long as you’re ready for amplified volatility.
Vanguard S&P 500 ETF
The VOO really needs no introduction—it’s a low-cost (0.03% expense ratio) S&P 500 ETF that’s at the very core of the portfolios of countless Americans. It’s a go-to option, and for good reason: it’s the cheapest and quickest way to bet on the U.S. economy.
And while settling for market returns may feel like “giving up,” I do think that having a strong core to a portfolio is a must. When it comes to robust cores, it’s tough to find one that’s as good as a low-cost S&P 500 index fund or ETF.
Though the VOO provides instant diversification across a broad range of industries, the elevated concentration in the tech sector is notable—that’s what can happen when you have a cap-weighed index. If one sector has all the relative winners, the market can be heavily weighted towards a single sector or industry. At writing, around 32.5% of the VOO is focused on information technology. That’s quite large for most.
For some, it’s too much, in which case I’d suggest diversifying by buying and holding other passively managed ETFs in addition to the VOO. However, for those who can’t get enough tech and believe it’s a better fit to gain from the rise of the modern (AI-based) economy, the VGT could prove a better gainer in the next several years.
The better buy?
I’d rather go with the VOO over the VGT despite the latter’s recent outperformance. You’re already getting a lot of tech exposure from the VOO.
Overexposure to certain sectors could lead to amplified damage once sector-based sell-offs hit. If there are pockets of froth in tech, the VGT could have more downside in a bear market scenario. As such, the VOO would be my preferred choice for the long term.
When it comes to investing in ETFs, Vanguard is a popular choice among many investors for its low fees and diversified portfolios. But with so many options to choose from, it can be difficult to determine which Vanguard ETF is the better buy today.In this post, we will compare two popular Vanguard ETFs – the Vanguard Total Stock Market ETF (VTI) and the Vanguard S&P 500 ETF (VOO) – to help you make an informed decision on which one may be the better buy for your investment portfolio.
Stay tuned for a detailed analysis of these two Vanguard ETFs and a breakdown of their performance, holdings, and expense ratios to help you determine which one may be the better buy for you.
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#Vanguard #ETF #Buy #TodayVOO ETF News, 1/20/2025 – TipRanks.com
How is VOO stock faring? The Vanguard S&P 500 ETF is up 1.17% in the past five days and has risen 25.3% over the past year.
According to TipRanks’ unique ETF analyst consensus, determined based on a weighted average of its holdings’ analyst ratings, VOO is a Moderate Buy. The Street’s average price target of $620.23 implies an upside of 12.88%.
Currently, VOO’s five holdings with the highest upside potential are Moderna (MRNA), Biogen (BIIB), ON Semiconductor (ON) and Regeneron Pharmaceuticals (REGN), and AES Corp. (AES).
Meanwhile, its five holdings with the greatest downside potential are Palantir (PLTR), Tesla Motors (TSLA), Super Micro Computer (SMCI), Texas Pacific Land (TPL), and Garmin (GRMN).
Revealingly, VOO ETF’s Smart Score is eight, implying that this ETF will likely outperform the market.
Power up your ETF investing with TipRanks. Discover the Top Equity ETFs with High Upside Potential, carefully curated based on TipRanks’ analysis.
VOO ETF News, 1/20/2025 – TipRanks.comExciting news for investors in the VOO ETF! According to the latest updates from TipRanks.com, the VOO ETF has shown strong performance and promising potential for future growth.
With a focus on tracking the S&P 500 index, the VOO ETF provides investors with a diversified and low-cost way to gain exposure to some of the largest and most successful companies in the US market. As of January 20, 2025, the VOO ETF has continued to outperform the market, delivering solid returns for its investors.
TipRanks.com analysts have identified several factors contributing to the VOO ETF’s success, including the strength of the companies within the S&P 500 index, the overall health of the US economy, and the ongoing trend of passive investing.
Investors looking to add a stable and reliable investment to their portfolio may want to consider the VOO ETF as a long-term option. With its low expense ratio and strong performance history, the VOO ETF offers a solid foundation for building wealth over time.
Stay tuned for more updates on the VOO ETF and other investment opportunities from TipRanks.com. Happy investing!
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XRP’s Massive Week: Nearly All-Time High Price, ETF Optimism, and SEC vs. Ripple
XRP nears all-time high
ETF optimism grows
Ripple’s holdings skyrocket
Meme coins surge
SEC not giving up
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XRP’s Massive Week: Nearly All-Time High Price, ETF Optimism, and SEC vs. RippleThis past week has been a rollercoaster ride for XRP, the cryptocurrency associated with Ripple. The price of XRP surged to nearly its all-time high, reaching over $1.80 at one point, before retracing slightly. This surge was fueled by a combination of factors, including positive sentiment in the overall cryptocurrency market and excitement over potential developments for XRP.
One major catalyst for XRP’s price increase was the growing optimism surrounding the possibility of an XRP exchange-traded fund (ETF). Earlier this week, multiple reports indicated that the U.S. Securities and Exchange Commission (SEC) may be open to approving an XRP ETF, following the recent approval of a Bitcoin futures ETF. This news sent XRP investors into a buying frenzy, driving up the price of the cryptocurrency.
However, this optimism was tempered by the ongoing legal battle between Ripple and the SEC. The SEC has accused Ripple of conducting an unregistered securities offering through its sale of XRP, and the case has been ongoing for months. While the recent developments in the case have been largely positive for Ripple, with several key victories in court, the outcome is still uncertain and continues to weigh on XRP’s price.
Overall, it’s been a tumultuous but ultimately positive week for XRP, with the cryptocurrency reaching new heights in terms of price and potential regulatory approval. As the cryptocurrency market continues to evolve, XRP remains a key player to watch.
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#XRPs #Massive #Week #AllTime #High #Price #ETF #Optimism #SEC #Ripple
