All-ETF Portfolios

7/18/2011


 

Exchange-traded funds (ETFs) are hitting the shelves at a breakneck pace. More than 150 ETFs have debuted so far this year, compared to 175 in all of 2010. Riding the wave of ETF enthusiasm, we revisited our all-ETF portfolios, picking our favorites funds in 15 categories.

The Forecasts' recommended fund portfolios consist mostly of managed, traditional mutual funds. But fans of index funds and ETFs should find the two all-ETF portfolios listed below worth a look. The ETFs mimic the core attributes of our mutual fund picks, and the portfolios roughly correspond to the suggested target weights of our recommended Growth and Conservative portfolios.

STANDOUT ETFs
% Of All-ETF
Portfolio
Exchange-Traded Fund (Price; Ticker)
Conser-
vative
(%)
Growth
(%)
Exp.
Ratio
(%)
Category
iShares S&P MidCap 400 Growth
($111; IJK)
7
8
0.25
Midcap growth
iShares S&P Moderate Allocation
($31; AOM)
6
9
0.31
Balanced stock bias
Rydex S&P 500 Pure Growth
($48; RPG)
11
12
0.35
Large-cap growth
SPDR Barclays Capital High Yield
($40; JNK)
4
5
0.40
High-yield bond
SPDR S&P 600 Small Cap Growth
($122; SLYG)
10
10
0.25
Small-cap growth
SPDR S&P International Dividend
($56; DWX)
8
8
0.45
Foreign large-cap
Vanguard Dividend Appreciation
($56; VIG)
11
12
0.18
Large-cap blend
Vanguard FTSE All-World Small Cap
($100; VSS)
5
7
0.33
Foreign small-cap
Vanguard Mid-Cap Value ETF
($56; VOE)
5
7
0.12
Midcap value
Vanguard Mortgage-Backed
($51; VMBS)
6
0
0.15
Ginnie Mae bonds
Vanguard MSCI EAFE
($36; VEA)
5
4
0.12
Foreign large-cap
Vanguard MSCI Emerging Mkts.
($47; VWO)
0
5
0.22
Emerging markets
Vanguard S&P 500
($60; VOO)
5
5
0.06
Large-cap blend
Vanguard Small Cap Value
($70; VBR)
7
8
0.23
Small-cap value
Vanguard Total Bond Market
($82; BND)
10
0
0.11
Inter.-term bonds

The all-ETF portfolios are relative bargains — the Conservative portfolio has an annual expense ratio of 0.22%, while the Growth portfolio's yearly fee is 0.24%. Note that brokerage commissions usually apply to ETF trades.

If you don't need to assemble a portfolio for the first time but want to fine-tune current holdings, consider the following top ETF picks:

Rydex S&P 500 Pure Growth ($48; RPG) ranks among the top 10% of large-cap growth funds for one-, three-, and five-year returns. The fund, with a weighted-average Quadrix Overall score of 72, has an expense ratio of 0.35%.


SPDR Barclays Capital High Yield ($40; JNK) offers an attractive yield of 8.2%, reflecting its holdings in low-quality corporate (junk) bonds. The fund, among the top 1% of its category for one- and three-year performance, has a 0.40% expense ratio.


SPDR S&P International Dividend ($56; DWX) holds more than 120 high-yielding stocks from around the world. Major country weightings are Spain (17% of assets) and Australia (16%). The fund yields 4.9%.


Vanguard Dividend Appreciation ($56; VIG) earns a weighted-average Overall score of 74, and 42% of assets are in stocks with Overall scores above 80. The fund, which charges only 0.18%, yields 2.0% and is up 7.8% so far in 2011.

FORECASTS FUND RECOMMENDATIONS
Through July 12, our recommended Growth Portfolio has returned 5.0% for the year, versus 4.7% for its benchmark portfolio. The Conservative Portfolio has returned 5.0%, versus 4.2% for its benchmark.
Year-to-Date
% of Portfolio
Fund (Price; Ticker)
Return
(%)
Rank
Conser-
vative
(%)
Growth
(%)
Fund
Rating
American Century Heritage
($22; TWHIX)
8.3
C
7
8
63
Buffalo Growth
($26; BUFGX)
5.6
C
11
12
94
Dreyfus MidCap Index
($29; PESPX)
8.5
B
0
0
87
Dreyfus Small Cap Stock Index
($21; DISSX)
8.1
B
0
0
62
Heartland Select Value
($30; HRSVX)
3.7
D
5
7
70
Heartland Value Plus
($30; HRVIX)
5.7
B
7
8
92
Manning & Napier International
($10; EXITX)
4.3
A
8
8
98
T. Rowe Price New Horizons
($36; PRNHX)
12.7
A
10
10
97
Vanguard 500 Index
($119; VFINX)
5.5
B
5
5
65
Vanguard Dividend Growth
($15; VDIGX)
8.0
A
11
12
98
Vanguard Emerging Mkts.
Stock Indx. ($30; VEIEX)
(1.5)
B
0
5
96
Vanguard GNMA ($11; VFIIX)
3.8
B
6
0
94
Vanguard Inter.-Term Tax
Exempt ($14; VWITX)
4.6
B
0
0
76
Vanguard Short-Term Invest.
Grade ($11; VFSTX)
2.0
B
0
0
78
Vanguard Total Bond Mkt. Index ($11; VBMFX)
3.6
C
10
0
53
Vanguard Total Int'l Stock
Index ($16; VGTSX)
0.5
D
5
4
85
Vanguard Wellesley Income
($23; VWINX)
5.8
A
0
0
98
Vanguard Wellington
($32; VWELX)
4.7
B
6
9
89
Wasatch International Growth
($21; WAIGX)
3.3
A
5
7
95
Wells Fargo Advantage High
Income ($8; STHYX)
5.1
B
4
5
73
* Year-to-date ranks through July 12 from Morningstar, comparing performance among funds with same objectives. A = top 20%; B = next 20%; C= middle 20%; D = next 20%; E = bottom 20%. Fund ratings are percentile ranks based on our fund-rating system.

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