I always personally feel like a good way to find an ETF for a specific subject or sector is to look at what the big players are using. It’s not a perfect way to do so, but it does give you a good idea of ETF’s that are generally liquid and have low fees. These ETF’s most likely have low spreads, lots of trading activity and are priced accurately (close to NAV).
So here we go, as of this morning, here are the top 25 ETF’s based on their outstanding market cap:
As discussed last week, SPY, the Spider which tracks the S&P500 Index is by far the biggest with GLD holding the second position, but there are still many interesting facts about this table:
#1-The three most expensive funds are all Ishares funds: EEM has been discussed in the past and there is no excuse in my opinion to not hold VWO. However, it is not as true for FXI and EWZ. Those markets have more fees & regulations for outsiders that make it more expensive to trade. I do not expect a much cheaper alternative to come around right away. Cheaper? Sure. But not anything comparable to the EEM vs VWO situation.
#2-The number of top ETF’s dedicated to bonds is higher than even a few months ago (5) and rising fast as individuals look for more efficient ways to invest in fixed income. The expense ratio fees of Vanguard’s BND of .11% is very impressive considering it is trading bonds which are usually more expensive to trade than equities.
#3-Despite all of the talk about energy and commodity ETF’s, very few made the top list. GLD sits at #2 of course but you then have to wait for #22 to see the next (and only other) commodity ETF.
Any thoughts? Any surprises when you look at this list?
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