3 Top ETFs Black Families
Should Consider
Exchange-traded funds, or ETFs, are like mutual funds, however they are different. Many investors prefer them. Like mutual funds, ETFs are a group of assets spread across various companies which diversify your portfolio. However unlike mutual funds, ETFs are more liquid, as they’re able to be bought or sold during open market hours. Let’s take a look at our top three picks for Black families and see what ETF might be right for you.
Vanguard S&P 500 ETF (VOO)
If you’re just getting your feet wet with regards to ETFs or investing in general, the world’s top investor, Mr. Warren Buffett, recommends you begin with a fund based on the S&P 500. Why? Because these funds include the highest-traded stocks in the country. ETFs in this category are a solid investment due to the longevity, reliability, and bankability of the companies within the fund. We’ve chosen Vanguard S&P 500 ETF, also known as VOO (a value ETF), as Vanguard is itself one of the most trusted brokerages in the world. For anyone looking to invest in a value ETF, this is an excellent place to start. This ETF won’t make you rich quick, but if you’re patient and play the long game, you’ll be so glad you bought this one to build your wealth.
Schwab US Dividend Equity ETF (SCHD)
Schwab US Dividend Equity ETF, also known as SCHD, is an equity fund, which means it invests in solely stocks. This particular ETF follows the Dow Jones U.S. Dividend 100 Index which includes companies that have done well financially over time. This ETF is low cost, and its holdings include several companies with household names, including Coca Cola, Pfizer, and Verizon, that provide quality products and have proven their sustainable dividends. The expense ratio for this ETF is 0.06% and the dividend yield is 3.1%. Consider SCHD if you’re looking for an excellent equity fund.
The Invesco Solar ETF (TAN)
If you want a large-cap ETF, consider The Invesco Solar ETF, or TAN, which was rated as the top large-cap ETF on Nerdwallet.com. Its expense ratio is below 1% while its five-year performance rate is a whopping 288.35%! This fund bases itself on the MAC Global Solar Energy Index (Index), which, as you’ve probably guessed, is made up of various companies in the industry of solar energy. TAN is considered a “Strong Buy” as far as ETFs go for its risk tolerance that is above average, and its investment horizon of 90 days. This ETF is expected only to rise in the stock market which makes it a compelling buy if you haven’t considered investing in solar power. If large-cap ETFs interest you, take a look at TAN.
With literally thousands of ETFs in the market today, you’re sure to find an ETF that matches your investment goals, your personal convictions, and your financial needs. Our three picks are from differing categories, but there are so many more, including sustainable ETFs, currency ETFs, and specialty ETFs, just to name a few. Have a look and take your time choosing an ETF that’s right for you and your family.
To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.
