December Etf Investment: Where To Put Your Money

Exchange-traded funds (ETFs) are a great way to invest in a diverse range of stocks and other assets without having to pick individual stocks. With thousands of ETFs to choose from, it can be challenging to know where to start. Here are some of the top-performing ETFs and best ETFs to buy in December 2024 to help you make an informed decision.

Equity ETFs:

- Bitwise Crypto Industry Innovators ETF (BITQ)

- Invesco QQQ Trust (QQQ)

- Vanguard S&P 500 ETF (VOO)

- SPDR S&P 500 ETF Trust (SPY)

- iShares Core S&P 500 ETF (IVV)

- Vanguard Growth ETF

- iShares Core S&P Small-Cap ETF

Bond ETFs:

- First Trust Emerging Markets Local Currency Bond ETF (FEMB)

- Innovator S&P Investment Grade Preferred ETF (EPRF)

Fixed-Income ETFs:

- Innovator S&P Investment Grade Preferred ETF (EPRF)

Commodities ETFs:

- KraneShares California Carbon Allowance ETF (KCCA)

Currency ETFs:

- Invesco CurrencyShares Euro Currency Trust (FXE)

Best ETFs for beginners

Exchange-traded funds (ETFs) are an excellent entry point for beginners to the stock market. They are cheap and typically carry lower risk than individual stocks since a single fund holds a diversified collection of investments.

Vanguard S&P 500 ETF (VOO)

The S&P 500 is often regarded as the best benchmark for the overall US stock market. This ETF offers a low expense ratio of 0.03%, making it a great choice for long-term investment.

Invesco QQQ Trust (QQQ)

This ETF provides access to top tech stocks and has outperformed the S&P 500 with its returns. It tracks the Nasdaq-100 index, which includes 100 of the largest non-financial companies on the Nasdaq.

Vanguard Russell 2000 ETF (VTWO)

This ETF focuses on smaller US companies, tracking the Russell 2000 index, which is the most widely followed small-cap index.

Schwab International Equity ETF (SCHF)

This ETF provides exposure to larger non-US companies.

Schwab Emerging Markets Equity ETF (SCHE)

This ETF focuses on companies from countries with developing economies.

Vanguard High-Dividend ETF (VYM)

This ETF invests in stocks that pay above-average dividends, mostly large-cap companies.

Schwab US REIT ETF (SCHH)

This ETF invests in real estate investment trusts (REITs), which own properties and tend to pay high dividends.

Vanguard Total Bond Market ETF (BND)

This ETF enables investors to cover the entire US bond market in one low-cost security.

Vanguard Dividend Appreciation ETF (VIG)

This is the largest dividend ETF on the market, focusing on companies with a history of consistently increasing their dividends.

Schwab US Dividend Equity ETF (SCHD)

This ETF is for investors wanting higher yields and potentially higher long-term returns than other dividend funds.

Invesco DB Commodity Index Tracking Fund (DBC)

This ETF provides exposure to a broad basket of commodities, reducing the risk compared to a single-commodity fund.

ARK Innovation ETF (ARKK)

This ETF is for investors who want to invest in innovative technology and are willing to take on more risk for the potential of higher long-term returns.

When choosing an ETF, beginners should consider their time horizon, risk tolerance, and asset mix. It is also important to understand the specific ETFs, develop an investment strategy, and consider seeking guidance from a financial advisor.

Best ETFs for long-term investment

Exchange-traded funds (ETFs) are a great investment option, especially for beginners, as they are relatively inexpensive, diversified, and tend to be less risky than investing in individual stocks. Here are some of the best ETFs for long-term investment:

Vanguard S&P 500 ETF (VOO)

Vanguard's S&P 500 ETF is one of the largest and most popular ETFs, offering a very low expense ratio of 0.03%. It provides investors with instant exposure to a diversified portfolio of 500 large-cap U.S. stocks, making it a great choice for long-term investment in the broader market.

Invesco QQQ Trust (QQQ)

This ETF provides access to top tech stocks by tracking the Nasdaq-100 index, which includes 100 of the largest non-financial companies on the Nasdaq. With an expense ratio of 0.2%, it has outperformed the S&P 500 with returns of around 420% over the last decade.

Vanguard Growth ETF

The Vanguard Growth ETF is ideal for investors who want exposure to large-cap growth stocks without actively picking stocks. It has a rock-bottom expense ratio of just 0.04% and its biggest holdings include Apple and Microsoft.

IShares Core S&P Small-Cap ETF

This ETF from iShares provides broad exposure to small-cap stocks, which tend to be more volatile than the broader market. By owning a large basket of over 635 small-cap stocks, it helps to reduce risk. It also has a very low expense ratio of 0.06%.

IShares Core Dividend Growth ETF

This ETF provides exposure to U.S. stocks with a history of growing their dividends per share, making dividend stocks a great long-term investment option. It has a trailing 12-month yield of 2.2% and a low expense ratio of 0.08%.

Vanguard Total Stock Market ETF

This ETF from Vanguard allows investors to own all the stocks in the U.S. market, including large caps, mid caps, and small caps—over 3,600 stocks in total. With a low expense ratio of 0.03%, it's an affordable way to invest in the entire U.S. stock market.

IShares Core MSCI Total International Stock ETF

This ETF from iShares provides exposure to international markets, holding over 4,300 stocks of all sizes from around the world. With an affordable expense ratio of 0.07%, it also offers a dividend yield of 3.0% based on the last 12 months.

Vanguard Intermediate-Term Corporate Bond ETF (VCIT)

The Vanguard Intermediate-Term Corporate Bond ETF is a great option for investors looking to add bonds to their portfolio. It owns roughly 2,100 corporate bonds with investment-grade credit ratings, maturing in 5 to 10 years. With a low expense ratio, it's a good choice for stable, long-term investment.

IShares Floating Rate Bond ETF (FLOT)

The iShares Floating Rate Bond ETF holds over 300 short-term investment-grade bonds with maturities between one and five years. Its average effective duration is very short, and it offers a relatively steady value and regular cash flow, making it a good alternative to certificates of deposit.

IShares National Muni Bond ETF (MUB)

The iShares National Muni Bond ETF is a low-fee fund that provides investors with federally tax-exempt income. It holds over 5,000 investment-grade municipal bonds from across the U.S., making it ideal for wealthier investors.

Avantis U.S. Small Cap Value ETF (AVUV)

This ETF from Avantis focuses on U.S. small-cap stocks with high profitability ratios and low valuations. It holds over 700 stocks, with its largest sector weightings in financials, consumer cyclicals, industrials, and energy.

Columbia U.S. Equity Income ETF (EQIN)

The Columbia U.S. Equity Income ETF screens for U.S. companies that are leaders in their industries in terms of environmental, social, and governance (ESG) factors. It holds about 100 stocks, mainly large-cap value and blend stocks, and offers a relatively high dividend yield.

Schwab U.S. Dividend Equity ETF (SCHD)

The Schwab U.S. Dividend Equity ETF is ideal for investors seeking strong dividends, high-quality stocks, and capital appreciation.

Best ETFs for short-term investment

Exchange-traded funds (ETFs) are a great investment option for beginners and experienced investors alike. They are a good choice for beginners because they do not require a lot of experience in the markets. ETFs are also a good choice for experienced investors who do not want to analyse investments or pick individual stocks.

• SPDR Portfolio Short Term Corporate Bond ETF (SPSB): This fund has outperformed its Morningstar category's average over the past one, three, five and ten years. It has an average effective duration of less than two years, indicating that investors will get a high yield along with decent share price stability.
• IShares Short-Term National Muni Bond ETF (SUB): This fund provides income that is exempt from federal taxes, making it attractive to investors in higher tax brackets. It has an average effective duration of less than two years, indicating relative price stability.
• Vanguard Ultra-Short Bond ETF (VUSB): This actively managed fund benefits from Vanguard's low-fee structure. It has an average effective duration of 0.91, indicating that the fund's value will remain relatively stable if interest rates rise.
• SPDR Bloomberg 1-3 Month T-Bill ETF (BIL): This fund invests in U.S. Treasury securities, which are exempt from state and local taxes. It has an average effective duration of 0.07 years, making it a stable investment option.
• VanEck IG Floating Rate ETF (FLTR): This fund is particularly appealing when interest rates are rising as it invests in floating rate notes, which rise and fall with the benchmark they are tied to. It has an average effective duration of 0.46 years and distributes income monthly.
• IShares Treasury Floating Rate Bond ETF (TFLO): This fund tracks the investment results of an index composed of U.S. Treasury floating-rate bonds. It has an ultralow average effective duration of 0.01 years, ensuring a relatively stable price.
• JPMorgan Ultra-Short Income ETF (JPST): This fund has outperformed its Morningstar category over the past two, three and five years. It has a low average effective duration of 0.61, promising a stable price if interest rates rise.
• Fidelity Limited Term Bond ETF (FLTB): This fund owns investment-grade debt securities with an average maturity between two and five years, offering the potential for capital appreciation when interest rates decline. It has an average effective duration of 2.56 years.
• Pimco Enhanced Short Maturity Active ETF (MINT): This fund offers capital preservation, strong returns and liquidity. It has an average effective duration of 0.16 years, forecasting a relatively stable price.
• Franklin Senior Loan ETF (FLBL): This fund pays a hefty dividend yield as it focuses on income before capital preservation and appreciation. It has a tiny average effective duration of 0.14 years, ensuring a steady share price even as interest rates shift.

When considering short-term bond ETFs, it is important to look at effective duration and average maturity to understand the interest rate risk involved. Effective duration takes into account the impact of cash flows and interest rate changes on a bond's price, while average maturity is a simple measure of the average time until bonds mature.

Best ETFs for high-risk investors

While exchange-traded funds (ETFs) are generally considered to be less risky than investing in individual stocks, there are still some ETFs that are better suited to high-risk investors who are comfortable with more volatility in exchange for the possibility of getting above-average returns.

• Schwab U.S. Large-Cap Growth ETF (SCHG): This ETF delivers returns that match the large-capitalization growth index, with a low 0.04% expense ratio. SCHG is a concentrated fund with Apple and Microsoft making up a quarter of its holdings.
• SPDR S&P 500 ESG ETF (EFIV): An ESG fund that selects from the top 500 companies in the U.S. that meet sustainability criteria. EFIV has outperformed the Large Cap Blend category and has Apple, Microsoft, Amazon, Nvidia and Alphabet as its largest holdings.
• IShares ESG Advanced MSCI EAFE ETF (DMXF): An international growth ETF that includes large and mid-cap firms from Europe, Australia and Asia with positive ESG ratings. DMXF has outperformed the foreign large-cap blend category and has a diversified portfolio across financial services, industrials, technology and healthcare sectors.
• Direxion NASDAQ-100 Equal Wtd ETF (QQQE): This ETF allocates the top 100 Nasdaq stocks equally, leading to less exposure to the biggest names and additional weight on smaller companies. QQQE has a modest 10% allocation to its top 10 holdings, making it a well-balanced fund.
• American Century U.S. Quality Growth ETF (QGRO): QGRO tracks large and mid-capitalization U.S. companies with high quality, strong growth and fair valuations. It has a diversified portfolio with Booking Holdings, ServiceNow, Autodesk and Neurocrine Biosciences among its top holdings.
• Invesco S&P SmallCap Momentum ETF (XSMO): XSMO focuses on small-capitalization stocks, which have been less popular than large-cap stocks but are showing signs of a shift in favour. The ETF owns fast-growing quality stocks with strong balance sheets and has outperformed the small-cap growth category.
• Fidelity Enhanced Large Cap Growth ETF (FELG): An actively managed ETF with low fees and strong performance. FELG has high conviction in its top 10 holdings, which include mid-cap and small-cap companies, and has a focus on the technology, consumer cyclical and communications services sectors.
• Vanguard U.S. Momentum Factor ETF (VFMO): A factor-driven, actively managed ETF that invests in large-, mid- and small-cap stocks with strong recent performance. VFMO has lower fees and a diversified portfolio with a large proportion of mid- and small-cap holdings.
• Vanguard Small-Cap Growth ETF (VBK): A well-diversified ETF with 638 stocks, VBK has a negligible expense ratio and attempts to replicate the performance of the S&P SmallCap 600 Growth Index. It has a balanced sector allocation with tech, industrials, healthcare and consumer cyclical firms making up the majority of its holdings.
• Vanguard Russell 1000 Growth ETF (VONG): VONG provides exposure to 444 high-quality, large U.S. companies, mainly in the technology sector. It has a low fee and broad coverage of the U.S. equity growth sector, but is less diversified due to its market capitalisation weighting.

Best ETFs for low-risk investors

Exchange-traded funds (ETFs) are a great option for low-risk investors as they offer diversification, low costs, and simplicity. Here are some of the best ETFs for low-risk investors to consider:

KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM)

KMLM is a unique ETF that tracks a portfolio of 22 futures contracts across commodities, currencies, and global bond markets. It aims to deliver positive returns with low correlation to traditional assets. KMLM has a 0.90% expense ratio and has performed well in the past, including a 30.4% gain in 2022 when the stock and bond markets faced significant losses.

Invesco S&P 500 Low Volatility ETF (SPLV)

SPLV is a low-volatility ETF that selects 100 stocks from the S&P 500 with the lowest historical volatility and weights them by inverse volatility. The ETF is heavily weighted towards defensive sectors like consumer staples, utilities, and healthcare, providing more stable performance. It has a 0.25% expense ratio and a 2.4% 30-day SEC yield.

FT Cboe Vest U.S. Equity Buffer ETF – October (FOCT)

FOCT is a "buffer" ETF that aims to eliminate the first 10% of potential losses over a specific period. For example, if the underlying index falls by less than 10%, investors will not experience any losses. However, the upside potential is also capped at 18% over the same period. FOCT has a 0.85% expense ratio.

Innovator Equity Defined Protection ETF – 2 Yr to July 2025 (TJUL)

TJUL is the first "defined outcome" ETF to offer total downside protection, aiming to mitigate 100% of potential losses over a two-year period. While it provides complete downside protection, the trade-off is capped upside potential at 16.6% over the period. It has a 0.79% expense ratio.

IShares iBonds Dec 2024 Term Treasury ETF (IBTE)

IBTE is a unique bond ETF that holds Treasury bonds maturing in 2024 and pays monthly interest. It offers a low-risk way to invest in bonds with a defined maturity and a low 0.07% expense ratio.

Invesco BulletShares 2024 Corporate Bond ETF (BSCO)

BSCO is another defined maturity ETF that holds investment-grade corporate bonds maturing in 2024. It provides monthly distributions and will pay out its net asset value to investors upon maturity. BSCO has a low 0.1% expense ratio.

Other Considerations for Low-Risk Investors

When selecting ETFs, low-risk investors should also consider the following:

• Diversification: Diversifying across different sectors, asset classes, and geographies can help reduce risk.
• Expense ratios: Look for ETFs with low expense ratios, as these fees can eat into your returns over time.
• Long-term performance: Consider the long-term performance of the ETF rather than just short-term gains.
• Risk tolerance: Ensure the ETF aligns with your risk tolerance and financial goals.

Frequently asked questions