Best ETFs for 2010 - Kiplinger.com

Kiplinger.com writer Steven Goldberg penned an article recently on his suggestions for ETFs for 2010. At the very beginning of the article he indicates that when looking to ETFs, start with Vanguard because of their low cost. ETF-Newsletter.com is a big fan of Vanguard ETFs as well. Five of the ETFs in our balanced ETF portfolio are from Vanguard.

Here are a couple excerpts from the article:

"Here’s how to assemble an ETF portfolio for 2010. Start by staying with broad-based funds. Invest 55% of your stock money in Vanguard Total Stock Market ETF (symbol VTI). This fund tracks the MSCI Broad Market index, which reflects the entire U.S. stock market. Over the past 12 months through January 8, it returned 31%."

"Boost your allocation to big-cap growth stocks by investing 10% of your stock money in Vanguard Mega Cap 300 Growth ETF (MGK). It tracks the MSCI U.S. Large-Cap Growth index, which is made up of the nation’s biggest growth stocks -- behemoths such as Microsoft, Wal-Mart Stores and Johnson & Johnson. Despite its name, the ETF recently held just 178 stocks. Its expense ratio is 0.13%. The fund surged 36% over the past 12 months.

Foreign stocks make up more than half the world’s total stock-market value. You don’t want to overlook them. Invest 20% of your stock money in Vanguard Europe Pacific ETF (VEA), which mirrors the MSCI EAFE index, the most popular index of foreign stocks of developed nations. Expenses are just 0.16 %. It returned 32% over the past 12 months, trailing U.S. stocks because advanced foreign economies lagged the U.S. in recovering from the recession."

"Put 10% of your stock money into emerging markets. Again, a Vanguard fund, Vanguard Emerging Markets Stock ETF (VWO), comes out on top, largely because it charges just 0.27% annually. It follows the MSCI Emerging Markets index. While the developed world slowly climbs out of the Great Recession, many emerging markets are growing like gangbusters. Low labor costs in emerging markets make it difficult for developed nations to compete in many arenas. Over the past 12 months, the fund soared 79%.

To complete your stock portfolio, invest 5% in real estate investment trusts, high-yielding companies that own property. Vanguard REIT Index ETF (VNQ), which charges 0.15% to mirror the MSCI U.S. REIT Index, returned 35% over the past 12 months. Unlike some real estate ETFs, this one invests solely in stock REITs (it doesn’t own REITs that invest in mortgages)."

I like this ETF portfolio. It's made of of Vanguard funds and would be pretty simple to manage. Read the complete article here:
www.kiplinger.com/columns/value/archive/the-best-etfs-for-2010.html