![]() ![]() If an ETF has a high AUM, it likely means that the ETF is a popular choice for investors. ![]() High assets under management (AUM) : AUM refers to the total amount of money managed by the ETF-in other words, how much money has been invested in that ETF. This can be a good way to diversify and potentially protect your money against inflation.Īmong other factors, here are some of the main criteria that the investment team uses to choose the ETFs we recommend: They’re considered high-yield because these companies pay a higher interest rate on the debt, but they’re also below investment grade-meaning they tend to be higher risk for investors. High-yield corporate bonds : Units of debt that American companies that are considered below investment grade have issued. TIPS are tied to the consumer price index (CPI), which is a figure released by the US Bureau of Labor Statistics that measures how prices for consumer goods have shifted. Treasury inflation-protected securities (TIPS) : Bonds issued by the US government that are designed to help protect your money from inflation over the long term. Investing in bonds can help to balance out the risk of investing in stocks. Bonds are essentially units of debt that you can buy, and that the borrower has to pay back with interest. US bonds : Government and corporate bonds from American companies. International emerging markets stocks : Stocks from companies in emerging markets, which are fast-growing countries that are developing economically. International developed markets stocks : Stocks from companies in developed international (outside of the US) markets, which are more established countries that are more advanced economically. They tend to be more stable long-term investments. Quality stocks : Stocks from American companies that have demonstrated strong profitability and good financials. This increased growth potential generally comes with more risk. Growth stocks : Stocks from American companies that are expected to grow at a higher-than-average rate. Dividends are cash payments that companies regularly pass to shareholders. High dividend stocks : Stocks from American companies that have historically paid out high dividends. Small cap stocks tend to have more growth potential than large cap stocks. US small cap stocks : Stocks from American companies that have a market cap of $250 million to $2 billion. ![]() You can calculate a company’s market cap by multiplying the stock price by the number of shares outstanding (publicly traded shares + restricted shares held by company insiders). These are larger, more established companies that collectively make up the majority of the US stock market. US large cap stocks : Stocks from American companies that generally have a market capitalization (or market cap) of $10 billion or more. Your recommended portfolio may include ETFs that represent these asset classes: Keep in mind that this doesn’t guarantee that your investments will perform well or that you won’t lose money-it’s just one strategy for diversifying your portfolio and potentially reducing risk. It’s generally considered good practice to have a mix of different asset classes in your portfolio so that asset classes that are performing well can help balance out those that are not. An asset class is basically a category of investments that tend to behave similarly, and the asset classes we chose represent a significant portion of the overall universe of investments. To make sure your recommended portfolio is diversified, our investment team recommends index-based ETFs across a variety of asset classes. ![]()
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