3 ETFs Perfect for Robinhood Investors
The world can't stop gawking about what Robinhood users are investing in. While some users walk on the risky side -- be it by scooping up troubled stocks like Hertz and Nokia, or day trading -- what gets ignored is all the boring investing that's happening on Robinhood. Its top 100 stocks currently include tried-and-true blue chips like Visa, Johnson and Johnson, and Walmart, to name a few.
Fortunately, there's a middle ground for all the Robinhood investors out there seeking high growth who want to mitigate the risks. By
These three ETFs are perfect for Robinhood investors because they offer aggressive growth potential. In fact, some of their top holdings are among Robinhood's most popular stocks. A bonus: The management fees are low, which will no doubt appeal to users of the commission-free platform.
1. Invesco QQQ Trust
Buying shares of the Invesco QQQ Trust (NASDAQ: QQQ) will automatically make you an investor in the 100 largest stocks on the tech-heavy
The QQQ has delivered impressive year-to-date results of about 34%. By comparison, the
Aggressive growth funds like the QQQ aren't a prime choice for those seeking
2. Schwab Emerging Markets Equity ETF
Investing across U.S.
The fund's benchmark is the FTSE Emerging Index, which tracks mid- and large-cap stocks across more than 20 countries and has an expense ratio of just 0.11%. The fund has more than 1,500 holdings, the three largest of which are Chinese e-commerce behemoths Alibaba and Tencent Holdings, and Taiwan Semiconductor Manufacturing Co. Ltd.
Emerging markets tend to be volatile, though, due to political instability, a lack of regulations, and currency risk. Most investors should limit their exposure to no more than 10% to 15%. Year to date, the fund is only up by about 4%, as the coronavirus pandemic has ravaged the economies of many emerging-market countries. But investing in an emerging-market ETF now could position you to capitalize as these economies recover.
3. Vanguard Russell 2000 ETF
The
The fund has underperformed compared to the S&P 500 over the last decade, but it's produced superior one-month and three-month returns. That's mostly due to the fact that small-cap stocks were harder hit when the market crashed in March, giving them more room to recover.
Of its 2,000-plus holdings, VTWO's top 10 stocks account for just 3.9% of its overall assets. Its largest concentrations are in healthcare (20.8%), consumer discretionary (15.7%), and industrials (15.4%), as of Sept. 30, 2020. Given that the S&P 500 is increasingly dominated by a handful of tech giants, investing in this fund could add some much-needed diversification to your portfolio.
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