Exchange-traded funds have become increasingly popular investment vehicles among beginning and advanced investors alike. While they trade like a typical stock, they offer exposure to much more nuanced investment strategies -- from corporate bonds to dividend stocks to emerging market equities. It's for this reason that we here at The Motley Fool have heralded the proliferation of these funds.
For those of you now learning about ETFs, I've compiled a list of the 10 largest funds by assets under management as well as a cursory description of their holdings, courtesy of the online ETF database ETFdb.com. As an investor, I've often found that learning about the biggest players in a particular market is the best way to dip my toes into it. And these 10 funds are a great start in this regard. Not only do they provide sufficient liquidity, but they also offer a number of unique exposure opportunities.
A veritable menu of strategies
As you'll see below, this top 10 list gives you a veritable smorgasbord of investment strategies. The SPDR Gold Trust
Two popular emerging market funds, the Vanguard MSCI Emerging Markets ETF
The last funds I want to direct your attention to on the list are the two bond ETFs: iShares Barclays TIPS Bond ETF
The corporate bond fund, on the other hand, gives investors exposure to a market that was effectively inaccessible to small investors in the past -- that of the corporate bond market. The object here is yield, as corporate bonds pay interest as opposed to appreciating in principal the same way that equities do. The fund's current yield is 4.43%, over twice the yield on the S&P 500 and considerably more than what Treasuries pay.
Below, you'll find the rest of the ETFs among the top 10:
What It Tracks
Assets Under Management (Billions)
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|SPDR S&P 500 ETF||S&P 500 index||$96.1||Add|
|SPDR Gold Trust||Spot price of gold bullion||$66.8||Add|
|Vanguard MSCI Emerging Markets ETF||MSCI index of emerging market stocks||$45.1||Add|
|iShares MSCI EAFE Index||MSCI index of developed international market stocks||$36.8||Add|
|iShares MSCI Emerging Markets Index||MSCI index of emerging market stocks||$33.9||Add|
|PowerShares QQQ||Nasdaq 100 index of largest nonfinancial stocks trading on the Nasdaq||$28.2||Add|
|iShares S&P 500 Index||S&P 500 index||$27.4||Add|
|iShares Barclays TIPS Bond ETF||Index of Treasury inflation-protected securities||$22.6||Add|
|Vanguard Total Stock Market ETF||Broad U.S. stock market||$20.1||Add|
|iBoxx Investment Grade Corporate Bond ETF||Index of hundreds of investment-grade corporate bonds||$17.4||Add|
Our three favorite ETFs
While there's an ETF for just about anything you can think of, our three favorite are disclosed in a recently released free report about ETFs that are set to soar during the coming economic recovery. To access this report while it's still available, click here now -- it's free.
Foolish contributing writer John Maxfield does not own shares in any of the securities mentioned in this article. The Motley Fool has sold shares of SPDR S&P 500 short. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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