Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some huge companies to your portfolio for ballast, and would like to focus on those that seem relatively undervalued, the Vanguard Mega Cap 300 Value Index ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is a very low 0.12%. (Vanguard is known for low fees.) The fund is somewhat small, too, so if you're thinking of buying, beware of a possibly large spread between its bid and ask prices. Consider using a limit order if you want to buy in.
This ETF has not been the best performer in its relatively short life, underperforming the world market. But it's the future that counts, more than the past. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
With a low turnover rate of 24%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Plenty of megacap companies had strong performances over the past year. Tobacco giant Altria
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Bank of America
The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.
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