A number of high-quality options are available to investors looking for options in the exchange traded fund (ETF) space tracking large cap companies (those with the largest valuations on the market). One such ETF I’d recommend investors check out in this arena is the iShares Core S&P500 ETF (NYSE:VOO).
This ETF represents roughly 80% of the total U.S. stock market, and holds only the largest companies, reducing some of the volatility lower cap companies may provide but also concentrating one’s portfolio somewhat.
Given the outperformance we’ve seen in large cap companies of late, and expectations that this outperformance may continue for some time, this is a great way to play this momentum trade for those who agree with market consensus currently.
This ETF offers excellent diversification for a rock bottom management expense ratio (MER), another great reason to choose this ETF over trying to build a similar portfolio on one’s own. I always recommend to investors who don’t know where to start to check out ETFs first, as these investment vehicles are often the safest, cheapest ways to own baskets of stocks in a well-diversified manner, compared to building unique portfolios that can carry higher levels of concentration risk or be under-diversified.
Total market ETFs such as this one are great for passive and active investors alike, providing a stable base from which to build upon. If you like to pick stocks, putting a chunk of money into an ETF like this means one gets correlation with the broader stock market, with the potential for outperformance dependent upon the performance of one’s stock picks – a great strategy.
Invest wisely, my friends.
