Exchange-traded funds (ETFs) are a popular choice for investors seeking diversified portfolios and cost-effective strategies. Here, we explore three standout ETFs which explained briefly as below:
Vanguard Total Stock Market ETF (VTI)
The Vanguard Total Stock Market ETF is a highly diversified option that provides exposure to 3,600 U.S. stocks with a single investment. This Gold-rated ETF simplifies long-term equity investing by mirroring market performance instead of attempting to outperform it, which can incur significant costs.
VTI is particularly suited for buy-and-hold investors due to its low turnover rate—just 2% last year—which minimizes trading expenses. Its standout feature is the remarkably low expense ratio of 0.03%, significantly undercutting the 0.70% median fee of its peers in the large-blend category.
Rather than aiming to be the top performer annually, VTI consistently ranks in the top half of its category, a cumulative advantage that places it in the top quartile over the past 15 years. This consistent performance, coupled with low fees, positions it as a reliable choice for long-term investors.
Dimensional US Targeted Value ETF (DFAT)
The Dimensional US Targeted Value ETF focuses on small- and mid-cap stocks, emphasizing profitability and reasonable valuations. With holdings in over 1,500 companies, the ETF offers broad diversification, with only 6% of its assets concentrated in its 10 largest positions.
DFAT also excels in managing costs, a critical factor when trading small-cap stocks. By maintaining a low turnover rate of just 3%, the fund reduces trading expenses while giving traders flexibility to seek optimal pricing. This cost-conscious approach is complemented by a competitive fee of 0.28%.
By targeting profitable firms and maintaining diversification, DFAT has consistently outperformed its peers. Over the past 15 years, its returns rank just outside the top 10% of funds in the small-value Morningstar Category, making it an excellent choice for investors seeking exposure to smaller-cap stocks.
Fidelity Total Bond ETF (FBND)
The Fidelity Total Bond ETF stands out among bond-focused funds with its flexible approach to U.S.-dollar-denominated bonds. This Gold-rated active ETF invests in a broad range of fixed-income securities, including investment-grade corporate bonds, U.S. Treasuries, and mortgages. It also allocates up to 20% to high-yield and emerging-market bonds when favorable opportunities arise.
Flexibility is a significant advantage in the bond market, where trading conditions and opportunities can shift rapidly due to interest-rate changes or credit spreads. FBND’s experienced management team leverages this flexibility to deliver strong results, consistently ranking in the top half of its category for the past seven years.
With a history of top-quintile performance over the last decade, a low expense ratio, and a seasoned management team, FBND is well-positioned to continue delivering robust returns for bond investors.