Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

3 Low-Cost ETFs For New Investors Looking To Enter Expensive Markets

By Investing.com (Tezcan Gecgil/Investing.com )ETFsAug 13, 2021 14:24
au.investing.com/analysis/3-lowcost-etfs-for-new-investors-looking-to-enter-expensive-markets-200483583
3 Low-Cost ETFs For New Investors Looking To Enter Expensive Markets
By Investing.com (Tezcan Gecgil/Investing.com )   |  Aug 13, 2021 14:24
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

In 2020, there were more than 7,600 exchange-traded funds (ETFs) worldwide. For the week that ended Aug. 4, U.S. domestic equity funds saw “inflows of $7.90 billion for the week.” In other words, since the listing of the first ETF, the SPDR® S&P 500 (NYSE:SPY) in 1993, the ETF market in the United States has grown significantly.

Today, we introduce three low-cost ETFs with low annual expense ratios. They could appeal to a range of readers, including new investors who might be building their long-term portfolios.

1. Vanguard S&P 500 ETF

Current Price: $409.15
52-Week Range: $295.04 - $408.07
Dividend Yield: 1.30%
Expense Ratio: 0.03% per year

The Vanguard S&P 500 ETF (NYSE:VOO) gives access to shares of companies in the S&P 500 index, which it tracks. The fund started trading in September 2010.

Vanguard S&P 500 ETF Weekly Chart.
Vanguard S&P 500 ETF Weekly Chart.

In terms of the sub-sectoral breakdown, information technology companies have the largest slice, with 27.40%. Next in line are health care (13%), consumer discretionary stocks (12.30%) and financials (11.3%).

The 10 largest names comprise 28.5% of the total net assets of $753.5 billion. Among them are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) and Facebook (NASDAQ:FB). All of this together means VOO is tilted toward growth.

Over the past year, the fund is up about 33%, and hit a record high in recent days. As a result, valuations have become stretched. Trailing P/E and P/B ratios stand at 26.9x and 4.4x, respectively.

Understandably, it is hard to know how much longer the uptrend in broader markets could last. We believe short-term profit-taking is likely in the coming weeks. Buy-and-hold investors looking for a low-cost index fund that provides exposure to the largest companies in the U.S. could consider buying the dips in VOO.

2. SPDR Portfolio S&P 600 Small Cap ETF

Current Price: $43.53
52-Week Range: $26.05 - $45.41
Dividend Yield: 1.01%
Expense Ratio: 0.05% per year

The SPDR® Portfolio S&P 600 Small Cap ETF (NYSE:SPSM) provides exposure to small capitalization U.S. equities. The fund began trading in July 2013, and has around $4.1 billion in assets.

SPSM Weekly Chart.
SPSM Weekly Chart.

SPSM, which tracks the returns of the S&P Small Cap 600® Index, currently has 611 holdings. In terms of the sub-sectoral breakdown, financials and industrials have the top spots each with about 17.7%. Next are consumer discretionaries (14.42%) and health-care (11.35%) shares.

Health-care technology group Omnicell (NASDAQ:OMCL), transportation company Saia (NASDAQ:SAIA), electronic components developer Power Integrations (NASDAQ:POWI), science and engineering consulting company Exponent (NASDAQ:EXPO) and mailing and shipping solutions name Stamps.com (NASDAQ:STMP) lead the stocks in the roster.

Over the past year, the fund is up about 47%, and hit a multi-year high in June. Trailing P/E and P/B ratios stand at 15.41x and 2.11x, respectively. Despite the recent strong performance of small-caps, we believe many of the names in SPSM still look attractive and are likely to create shareholder value in the coming quarters, too.

3. iShares MSCI Emerging Markets ex China ETF

Current Price: $61.43
52-Week Range: $44.50 - $63.74
Dividend Yield: 1.37%
Expense Ratio: 0.25%

The iShares MSCI Emerging Markets ex China (NASDAQ:EMXC) invests in large- and mid-cap emerging market (EM) companies, excluding China. The fund started trading in August 2017.

EMXC Weekly Chart.
EMXC Weekly Chart.

EMXC, which has 609 holdings, tracks the MSCI Emerging Markets ex China Index. Firms come from Taiwan (21.98%), South Korea (20.41%), India (16.54%), Brazil (8.10%), South Africa (5.44%) and the Russian Federation (5.25%), among others.

Taiwan Semiconductor Manufacturing (NYSE:TSM), Samsung Electronics (KS:005930) (OTC:SSNLF), Indian Reliance Industries (OTC: RYNIY) and Vale (NYSE:VALE) are among the top names in EMXC. The largest 10 stocks comprise about 38% of net assets of $971.7 million.

In the past 12 months, EMXC is up 29% and hit an all-time high in June. Trailing P/E and P/B ratios are 21.30x and 2.06x, respectively. In the case of short-term profit-taking, long-term investors could look to enter the fund around $60 or below.

Due to regulatory developments in China in 2021, many Chinese shares, especially those in technology and online education sectors, have come under pressure. Therefore, a fund like EMXC could be appropriate for readers who are still nervous about the near-term prospects of Chinese equities.

3 Low-Cost ETFs For New Investors Looking To Enter Expensive Markets
 

Related Articles

3 Low-Cost ETFs For New Investors Looking To Enter Expensive Markets

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Sakib Khan
Sakib Khan Aug 15, 2021 13:07
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email