The 20 best commission-free etfs for new investors

Exchange-traded funds (ETFs) are an excellent investment option for an investor who wants to create a well-diversified portfolio. Msci acwi ex us index performance Choosing individual stocks and bonds is not only time consuming – it’s expensive. Msci world energy index ETFs, like mutual funds, combine assets into a pool to construct a specific investment objective, usually to track a particular market index.


Unlike mutual funds, however, ETFs trade like common stock. Msci emerging markets index components They’re bought and sold on a stock exchange. Msci world index definition That means you don’t need $2,000 or $3,000 — the minimum required balance for many mutual funds — to buy a diversified bundle of investments.

An investor with a well-diversified ETF portfolio may own eight or more ETFs. Msci world data That’s small potatoes compared to the number of investment vehicles you’d need to diversify with individual stocks or bonds; even so, the commissions paid to buy those ETFs can add up, particularly for those who systematically purchase shares over time (like at each pay check) or those who rebalance their portfolios periodically. Msci world index performance Commission-free ETFs

The good news is that there are hundreds of commission-free ETFs available on a number of platforms including Vanguard, Fidelity, TD Ameritrade. Msci world definition These commission-free ETFs are excellent options for investors who want to invest a little bit each week, month, or quarter.

Most investment companies allow for free trades if done within their own platform. Msci world kursindex If you’re a Vanguard client, you most likely won’t pay to trade Vanguard ETFs, for example. Msci world kaufen To be considered commission-free for the purposes of this round-up, ETFs must be available commission-free on at least two different platforms.

What else makes for an attractive ETF? In a word: fees. Msci world hedged The primary investment objective of most ETFs is to track an index, which means it’s not seeking to beat the market or reduce risk. Msci world index performance 2015 An ETF’s goal is simple: to trade when changes are made to the tracked index.

I like the model portfolios available from the American Association of Individual Investors (AAII), which are broken out for aggressive, moderate, or conservative investors. Msci index performance In fact, I considered the categories from their model portfolios to identify the best commission-free ETFs for new investors, with a few changes. Msci indizes I grouped fixed income and international holdings into one category each.

I also considered adding an additional category for aggressive investors: alternatives/commodities/real estate, but no ETFs met my criteria. Db x trackers msci world Large-Cap Stock ETFs Fund

IVV tracks the S&P 500 Index, a benchmark of the 500 largest firms in the US. Msci index historical data The S&P 500 is one of the world’s best-known and most widely followed stock indexes.

VEU tracks the FTSE All-World ex US Index, which includes approximately 2,000 stocks from 46 countries around the world. Msci world natural resources index Stocks from currently emerging markets account for 13 percent of its holdings.

VSS tracks the FTSE Global Small Cap ex US Index, which includes approximately 3,300 stocks from 46 countries around the world. Stocks from currently emerging markets account for 12 percent of its holdings.

BSV tracks the Barclays US 1-5 Year Government/Credit Float Adjusted Index, which includes all medium- and larger-sized US government issues, investment-grade corporate bonds, and investment-grade dollar-denominated bonds that have a maturity length between one and five years.

BIV tracks the Barclays U.S. Msci world developed markets index 5, which includes all publicly-issued medium- and larger-sized US government issues, investment-grade corporate bonds, and investment-grade international dollar-denominated bonds that have a maturity length between five and 10 years.

To make the list, ETFs must fit onto one of the categories, maintain a rock-bottom fee structure, and be available commission-free on more than one platform. Msci eafe index symbol Narrow categories like ETFs that invest in only one country or industry sector were excluded.

Portfolios available on more than two platforms were given preferential treatment in that they sometimes appear on a list, despite a higher fee structure than some of the other options. Msci world index etf When this occurs, the less expensive option is also included. Msci world financials index Thought was also given to whether the inclusion of a particular asset class could help round out a diversified portfolio, as with the addition of a small-cap or mid-cap investment option within the international category. Msci world yahoo finance Final thoughts

If you’re thinking about setting up an account with a brokerage firm that will allow commission-free ETF trades within their product family, consider the following firms:

If you don’t want to make the trades yourself, consider an app like Stash, which lets you invest in a select number of ETFs and doesn’t charge you for individual trades. Msci international index Read more: