10 Best ETFs For Ultimate Wealth Building

Summary

The video discusses the top 10 ETFs for wealth building, highlighting Vanguard's VTI and VO, BlackRock's IVV and ITOT, and State Street's SPG, among others. It emphasizes low expense ratios, broad market exposure, and historical performance, suggesting consistency and long-term investment as key to wealth accumulation.

Takeaways

• 🐢 Vanguard is the largest provider of mutual funds and the second largest provider of ETFs, known for its low-cost, broad market investing approach.
• 🏆 The Vanguard Total Stock Market ETF (VTI) is recommended as the top ETF for wealth building, with a 0.03% expense ratio and a 10-year performance of 11.22%.
• 📈 The Vanguard S&P 500 ETF (VO) is another top choice, tracking the S&P 500 Index with a 10-year performance slightly higher than VTI at 11.86%.
• 🌍 Vanguard Total Stock ETF (VT) offers global exposure, investing in both US and foreign markets, with a 10-year performance of 7.7%.
• 💼 BlackRock is the world's largest asset manager and provider of ETFs, offering similar low-cost ETFs like the iShares Core S&P Total US Stock Market ETF (ITOT).
• 📊 The iShares Core S&P 500 ETF (IVV) is a close competitor to Vanguard's VO, with a nearly identical 10-year performance of 11.87%.
• 🌐 State Street is one of the big three index fund managers and offers the SPDR Portfolio S&P 500 ETF (SPG) with the industry's lowest expense ratio for S&P 500 ETFs at 0.02%.
• 🏦 Charles Schwab provides the Schwab US Broad Market ETF (SCHB) and the Schwab US Large Cap ETF (SCHX), both with a 0.03% expense ratio and strong 10-year performances.
• 📚 A free PDF guide is available for download, listing all the ETFs discussed in the video for easy reference.
• 💡 Consistent long-term investment in any of these ETFs is emphasized as the key to wealth building, rather than short-term performance or the specific fund chosen.

Q & A

What is the main focus of the video script?

The video script focuses on discussing the 10 best ETFs (Exchange Traded Funds) for wealth building, as presented by T from Financial Tortoise.

What is the primary principle on which Vanguard was founded?

Vanguard was founded on the principle of providing low-cost, broad market investing for individuals.

What is the Vanguard Total Stock Market ETF (VTI) known for?

The Vanguard Total Stock Market ETF (VTI) is known for its comprehensive reflection of the US stock market, including almost 4,000 companies across various capitalizations and covering nearly 100% of the US investable equity market.

What is the significance of the turnover rate in a fund?

The turnover rate signifies the rate at which buying and selling occurs within a fund. For actively managed funds, it reflects how often a fund manager decides to sell off underlying investments and add new ones. A lower turnover rate for passively managed funds like VTI suggests efficient management.

How does the performance of the Vanguard S&P 500 ETF (VOO) compare to the Vanguard Total Stock Market ETF (VTI) over the past 10 years?

The 10-year performance of the Vanguard S&P 500 ETF (VOO) is slightly higher than VTI, with VOO at 11.86% and VTI at 11.22%, due to the fact that large companies in VOO generally perform better than the smaller companies included in VTI.

What is unique about the Vanguard Total World Stock ETF (VT) compared to VTI or VOO?

The Vanguard Total World Stock ETF (VT) is unique because it invests in both US and foreign markets, holding close to 10,000 stocks and providing exposure to a more global market.

Why might an investor choose the iShares Core S&P 500 ETF (IVV) over the Vanguard S&P 500 ETF (VOO)?

An investor might choose IVV over VOO based on personal preference for Black Rock as the fund provider, or if IVV is the only option available in their retirement plans. Both funds have similar performance and low expense ratios.

What is the main difference between the iShares Core S&P Total US Stock Market ETF (ITOT) and the Vanguard Total Stock Market ETF (VTI)?

The main difference is that ITOT represents about 2,800 stocks compared to VTI's nearly 4,000 stocks. However, both funds aim to track the broad equity market and have similar performance and low expense ratios.

How does the expense ratio of the SPDR Portfolio S&P 500 ETF (SPG) compare to similar S&P 500 ETFs?

The SPDR Portfolio S&P 500 ETF (SPG) has the industry's lowest expense ratio at 0.02%, which is lower than similar S&P 500 ETFs like Vanguard's VOO and Black Rock's IVV, which have an expense ratio of 0.03%.

What is the significance of the Schwab US Broad Market ETF (SCHB) in terms of market exposure?

The Schwab US Broad Market ETF (SCHB) provides exposure to the 2,500 largest publicly traded companies in the US, making it an excellent choice for investors looking for broad market representation with a low expense ratio.

How does the 10-year performance of the Schwab US Large Cap ETF (SCHX) compare to the S&P 500 ETFs mentioned in the script?

The 10-year performance of the Schwab US Large Cap ETF (SCHX) is 11.68%, which is slightly higher than the performance of the S&P 500 ETFs like VOO and IVV, and in line with the broad market ETFs discussed.