For investors seeking a straightforward, long-term portfolio strategy, a diversified ETF approach can yield strong performance with minimal management. A proposed five-holding ETF portfolio, starting with the Vanguard S&P 500 ETF (VOO), provides exposure to over 80% of the U.S. economy, benefiting from a historical average annual return of 10%. Complementing this, the iShares Russell 2000 ETF (IWM) adds small-cap exposure, which can perform well in different market cycles, despite recent underperformance.
Additionally, the iShares Core MSCI Total International Stock ETF (IXUS) and Vanguard FTSE Emerging Markets ETF (VWO) offer critical diversification into foreign and emerging markets, which may outpace U.S. equities in the coming years. Finally, the iShares Core U.S. Aggregate Bond ETF (AGG) rounds out the portfolio, providing stability and income, allowing investors to weather market fluctuations.
This ETF portfolio strategy emphasizes a balanced approach, enabling investors to capitalize on various market segments while minimizing active management.
Source: fool.com