I am really starting to like the Vanguard ETFs, almost as much as I like their mutual funds. They have really low expense ratios, they perform spot-on to the indexes they track, and they track sectors and indexes that I really like. In my rollover IRA, I have invested all in exchange traded funds, because for some reason, I thought it would be smart to throw my 401k money in Sharebuilder, because they have low fees, and they allow you to buy portions of shares of securities. Little did I know that they only sell ING mutual funds, so I was pissed about that.
VWO: It’s a Vanguard exchange traded fund that tracks the MSCI emerging markets index. It’s a fairly aggressive fund, because it’s tracking unproven companies with a potentially big upside or downside.
BND:This is another Vanguard exchange traded fund that seeks to track a broad, market-weighted bond index. It’s great, because you don’t have to deal with buying individual bonds. It’s a more conservative fund, but it strengthens when common stocks are lagging. Bonds are a decent investment to hedge your portfolio from massive amounts of risk, but I don’t recommend young people loading up with bond funds. I will keep about 15 to 20% of my portfolio in bonds.
I got rid of XLE, which tracked an energy index. I just wasn’t happy about what was going on with the energy sector, and the Obama administration could put a stranglehold on energy with environmental rules and regulations. I’ll continue to keep you updated on my ETF experiment.
