Investors seeking to maximize returns and minimize the time and effort which goes into investing often look to exchange traded funds (ETFs) as an effective solution.
The days of picking and choosing which stocks could be expected to outperform over the long run may not be over for those willing to put in the time and effort, but for most passive investors seeking a reasonable return while taking a reasonable amount of risk, here are three ETFs with excellent risk/return profiles.
The SPDR Bloomberg Barclays TIPS ETF (NYSE:IPE) is perhaps one of the least risky plays for investors, given the fact this ETF is composed of short-term inflation-protected bonds which act as an excellent risk mitigation tool for investors who are heavily focused in equities.
On the equities spectrum, one of the ETFs which is well-suited to an ultra-conservative investor is the Powershares Defensive Equity ETF (NYSE:DEF). In the latter stages of a bull market (where I believe we are now), defensive securities such as those contained in this ETF should outperform growth names in the medium term.
Preferred shares act as a bond/equity mix, offering investors more stability than equities which are traditionally much more volatile than bonds, while offering more upside than a plain vanilla bond portfolio. One great ETF for investors to gain exposure to this sector is the iShares Preferred Stock ETF (NYSE:PFF).
Invest wisely, my friends.
