ETFs have become favorite tools of hedge funds and professional traders and that may lead some investors to believe that this asset class has nothing in store for the conservative investor.
Think again. If you're looking for investment options that can provide shelter from volatile markets, then you need not look any further than ETFs.
The world of ETFs has plenty of options for investors looking for conservative investments, many of which are cheaper to own than comparable mutual funds. Here's a few to get you started.
1) Vanguard Dividend Appreciation ETF VIG:
VIG doesn't track the Dow, but it is home to plenty of Dow members such as Exxon Mobil XOM, Procter & Gamble PG and Wal-Mart WMT. The yield is fair at 2.14% and the expense ratio is a scant 0.23%.
2) iShares S&P Conservative Allocation AOK:
Obviously this is one to consider on title alone. AOK is a collection of major bond and U.S. equity indexes. There is little in AOK's holdings that can be considered risky and the expense ratio is just 0.11%.
3) iShares Barclays Aggregate Bond ETF AGG:
Everything here is investment grade and AGG invests in government, mortgage, corporate, and foreign bonds giving you exposure to most of the bond universe all for an expense ratio of just 0.24%
4) Utilities Select Sector SPDR XLU:
A great way to play a deflationary, low-interest rate environment is with dividend-paying stocks particularly utilities. Why pick one when you can get access to Dominion D, Duke DUK and a host of others for just 0.22% in fees?
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