Profit from the Last Decade’s ETF Revolution

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

When I first entered the investment business to work with my father, Dick Fabian, nearly four decades ago, roughly 95% of mutual funds were high-fee and charged a “load.”

The goal then – and maybe the attraction – of my family-run newsletter, Successful ETF Investing, was to serve as an “investor guidebook” to navigate the then-relatively-new landscape of low-fee, “no-load” mutual funds. Throughout the 1980s and 1990s, my father and I saw the tremendous growth of no-load mutual funds.

By the turn of the century, no-load funds had become the dominant vehicles for individual investors seeking broad, as well as targeted, sector exposure. Yet, in the past decade and a half, exchange-traded funds, or ETFs, have taken over the mantle as the dominant investment vehicles for individual investors.

Why is this the case?

Well, the reason is quite simple. ETFs are the most economical, most transparent, easiest and, in my view, best investment vehicles for investors who want exposure to nearly every facet of the equity markets, including broad-based domestic, international and sector-specific equities.

In recent years, the growth of smart-beta ETFs, leveraged ETFs, inverse ETFs and a variety of fixed-income and commodity ETFs has really made these funds the go-to vehicles for just about every investing style and objective.

In the chart below, you will find the 10 ETFs with the highest assets under management currently in operation today. As you can see, these ETFs are not off-the-radar funds by any means. Indeed, the #10-ranked ETF on this list has over $38 billion in assets under management.

10-etfs-assets
The top 10 ETFs by assets, as they appear at ETFdb.com.

Let’s look at some of the biggest ETFs in a bit more detail.

  • SPDR S&P 500 ETF (SPY). With more than $200 billion in assets managed, the SPDR S&P 500 ETF (SPY) is more than twice the size of its nearest competitor, the iShares Core S&P 500 ETF (IVV). In early 2009, SPY shook off more than a decade of mediocre performance and has appreciated more than 180% since then.
  • iShares Core S&P 500 ETF (IVV) is a newer and smaller version of the SPDR S&P 500 ETF (SPY), capable of using alternative investment strategies that its “big brother” SPY cannot. IVV pays out a 2% annual yield and is up 80% during the last five years.
  • Vanguard Total Stock Market ETF (VTI). Whereas the two ETFs listed above were focused on the returns of the S&P 500, VTI tracks the performance of the overall U.S. stock market, including large-, medium-, small- and micro-cap stocks. Despite a double-digit slump in 2015-2016, VTI still has seen its share price rise 80% since January 2012.
Exclusive  Betting on a Bounce in Greece, Part 2; Locking in 27.5% gains on the Euro

To me, the ETF revolution, particularly over the past decade, has been one of the best developments to ever come out of Wall Street — so embrace it!

previous article

Last week, the Alpha Algorithm identified a cable play in the form of Charter Communications (CHTR). With this week’s Alpha Algorithm generating Comcast Corporation (CMCSA) as a recommendation, the cable sector is emerging as a big favorite among many Alpha Algorithm strategies. Comcast, a familiar name to many consumers, is among the world's leading communication companies, providing basic cable, digital cable and high-speed intern

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE