InvestLane logo

Newsletters

LOG IN
SIGN UP

Category: Investing

VT vs. VTI & VXUS: The Best Way to Own the Whole World Market

Professional woman using a tablet in a high-rise office, comparing VT vs. VTI and VXUS for investing in the total world stock market

What Is VT? Can one ticker really buy you the whole stock market? That is the promise behind the Vanguard Total World Stock ETF (VT). Buy VT and you hold a long position in stocks across North America, Europe, the Pacific and emerging markets, in one line. Two funds reach substantially the same stocks, so the question is the packaging cost. Start with the case for owning a single ETF. What’s Inside VT: Holdings and Index The Vanguard Total World Stock ETF is a world stock index fund wrapped as an ETF, and Vanguard tracks the index rather than picking stocks. This ETF owns 10,088 common stocks and has $102 billion in net assets.1 Its sixth-largest holding is Taiwan Semiconductor Manufacturing, at 1.52%. Inside the FTSE Global All Cap Index The idea behind the fund is to track the FTSE Global All Cap Index, a market index reaching large-, mid- and small-cap stocks across developed and emerging countries. Breadth is the point: a world stock index fund built from big names alone skips thousands of smaller stocks. Because it is designed to track the performance of the FTSE Global All Cap Index rather than beat it, your investment return is that minus costs. Why Market Capitalization Sets the Weights Market capitalization decides where your money goes. Bigger company, bigger slice, and nobody at Vanguard votes on it. VT’s median market cap ran $159 billion as of August 31, 2026, so the middle of the fund is large even though the index reaches down the size scale. The U.S. dominates by market cap, not by anyone’s choice. » Holding other funds too? You may want to check how much two funds actually overlap. Expense Ratios Compared The table you see above does the work. VT charges 0.06%, VTI 0.03%, VXUS 0.05%, and the net assets column shows where the market has voted. » Want the U.S. comparison? See how VTI compares with an S&P 500 fund. What the Expense Ratio Costs You On $10,000, a 0.06% expense ratio costs you just $6 a year. VTI’s 0.03% costs $3. Build the two-fund version at roughly 63% U.S. and 37% international and your blended expense ratio comes in near 0.037%, saving about $2 a year. Real, but small. The fund you hold through a rough decade counts for a lot more. How Much International and Emerging Markets Exposure You Get “International” covers several very different markets, and the Vanguard Total International Stock ETF (VXUS) shows it: Europe 36.38%, Pacific 28.46%, emerging markets 26.21%, as of August 31, 2026.2 VT bundles those same stocks of companies into one equity holding at 37.7% foreign. Owning the second fund is what puts that split under your control. Most of it is boring in the best way: the companies located in Europe and the Pacific are household names that behave like U.S. large-cap stocks. How Much of the World Is Emerging Markets Emerging markets are 9.96% of VT and 26.21% of VXUS. Both are correct: VT dilutes emerging markets with its U.S. allocation, while VXUS is built ex-U.S. Want more than 10%? The two-fund build lets you dial it directly, and with VT you would bolt a separate emerging markets fund on top. See other international ETFs worth knowing. » Start investing today: Explore top brokerage accounts with our detailed review What Is VTI? (Vanguard Morningstar Total Stock Market ETF) On July 29, 2026, Vanguard renamed VTI, formerly the Vanguard Total Stock Market ETF, to the Vanguard Morningstar Total Stock Market ETF. It tracks the Morningstar U.S. Total Market Index, previously called the CRSP U.S. Total Market Index.3 Morningstar rebranded the index family and Vanguard followed, saying the changes “will not affect the funds’ investment objectives or how they are managed.”4 VTI holds 3,507 stocks at 0.03% with $2.3 trillion in net assets, close to the whole U.S. stock market in a ticker. Curious how many ETFs a portfolio really needs? How the VTI + VXUS Two-Fund Portfolio Works You buy a U.S. market ETF (VTI) and an international one (VXUS) and set the ratio. VT fixes it at whatever global market capitalization says today. Run VTI and VXUS side by side and you control it, at the cost of rebalancing by hand once a year, which can add to your return or cut it. Add a bond fund for the three-fund build. Where VTI Fits VTI is the U.S. leg and does the heavy lifting: 3,507 stocks, 0.2% foreign holdings, a $348.3 billion median market cap. Pair VTI with VXUS at roughly 63/37 and your combined holdings number about 12,300, against VT’s 10,088. The two track different index universes, which is where the difference comes from. » Ready to invest for retirement? Check out our review on the top IRA accounts Where Each Build Belongs at Tax Time Here the two builds stop being identical. Foreign governments withhold tax on the dividends these funds receive, and the IRS says that if you “paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income,” you may be able to claim a credit or a deduction.5 Being subject to U.S. tax on the same income is why the credit reaches you in a taxable account and not inside an IRA. A second condition decides which fund can hand it to you: the credit passes through only when “more than 50% of the value of the Fund’s assets consists of securities of foreign corporations” at year end.6 VXUS, at 99.0% foreign, clears it. VT, at 37.7%, does not, so a VT holder never sees the credit in any account. That puts a long position in VXUS in the taxable account, where it can lift your net investment return. See a momentum-tilted international fund. Pros and Cons of Owning Only VT Both columns are real. What you get What you give up One holding, no rebalancing Control of the U.S. and international split Automatic reweighting as markets move Tax

The 5 Best Gold ETFs of 2026 (My #1 Pick and Why)

Businessman working at his desk in a nighttime office, researching the best gold ETFs to invest in

Why Gold ETFs Belong in a Portfolio Owning gold used to mean owning the metal. You buy coins or bars, then you deal with storage. Insurance costs money every year. Selling later means finding a dealer and taking whatever price they quote that day. Gold ETFs trade all of that for convenience. You buy shares in a normal brokerage account or an IRA, the fund tracks bullion, and shares are traded whenever the stock exchanges are open. Many investors use gold to protect a portfolio against inflation and the kind of market stress where stocks and bonds fall together. That is the whole case. You never hold a single ounce yourself. And if you are deciding where a specific $1,000 should go, we answered that question on its own page. » Start investing today: Explore top brokerage accounts with our detailed review How Physical Gold Funds Work A share of a physically backed gold ETF is structured as a claim on real metal in a vault. It is not a futures contract or a debt security, which is where confusion about precious metals funds starts. The trust buys physical gold, stores it, and issues shares against what it holds. Price tracks the metal closely after fees. Nothing about the structure is complex, so cost ends up being the main thing separating one gold ETF from another. Two gold ETFs holding the same physical gold differ mostly by what they charge. » New to the structure? Our guide on how to invest in ETFs covers the mechanics. What Gold Bullion Backing Means Gold bullion backing has one wrinkle worth understanding before investors buy shares. The trust pays its expenses by selling a small amount of the metal it holds, month after month. So the gold bullion behind each share slowly declines, even on a day when the price does nothing. Nothing is hidden about the process. It is the honest version of the line that gold pays no dividends, so there is no income to tax while you hold. The 5 Best Gold ETFs of 2026 Here are the five, in order of size. Four of them hold physical gold and one holds miners. For a sense of how these funds rank across the whole market, see the largest ETFs in the market by assets. SPDR Gold Shares (GLD): Best for Active Traders GLD launched on November 18, 2004, the first US gold ETF and still by far the largest, with $145.98 billion in assets under management as of August 12, 2026.1 Size is the product here. It carries a large listed options market for investors who trade around a position. Its own 30-day median bid/ask spread is 0.01%. You pay 0.40% a year for that, the highest expense ratio of the four physically backed funds. On $10,000, for example, that is $40 annually. For a trader moving in and out, $40 is noise against execution quality. Investors holding twenty years see that $40 compound against them, even when the returns underneath are compounding too. That is why the rest of this list exists. iShares Gold Trust (IAU): The Lower-Cost Alternative IAU arrived two months after GLD, on January 21, 2005, second largest here at $65.01 billion in total assets. The sponsor fee is 0.25% against GLD’s 0.40%.2 Same $10,000, and now the cost is $25 a year instead of $40. Its own 30-day median bid/ask spread is 0.01%. For most investors that combination of a lower expense ratio and heavy trading has been enough. IAU was the default answer among gold ETFs for years. Then the newer minis showed up and undercut it. SPDR Gold MiniShares (GLDM): Best for Long-Term Investors State Street runs GLDM alongside GLD, holding the same metal under the same structure, at a gross expense ratio of 0.10%.3 That is a quarter of GLD’s fee. On $10,000 you pay $10 a year. GLDM launched June 25, 2018 and now holds $30.39 billion, so the cheap option stopped being the small option a while ago. Its own 30-day median bid/ask spread is 0.01%. Run that fee difference against GLD across thirty years and the advantage stops looking cosmetic. This is the fund I point investors toward when they are buying gold and have no plans to touch it. VanEck Gold Miners (GDX): Mining Company Exposure GDX is a different animal. Buying it buys 66 gold mining companies, not gold.4 Miners carry operating costs, debt, country risk and management decisions that a bar of metal never has. When gold prices run, good miners tend to run harder. A company with a bad quarter can still fall while the metal holds steady. The fee is 0.51%, highest in this lineup, on $27.99 billion in total net assets. The top 10 holdings are 61.53% of the fund, so this is a concentrated stock position wearing a commodity label. It pays a small distribution too, which no physical gold fund does. Read it alongside how many ETFs you actually need first. iShares Gold Trust Micro (IAUM): The Lowest Expense Ratio IAUM carries the lowest expense ratio on this page at 0.09%, one basis point under GLDM.5 On $10,000 that works out to $9 a year against GLDM’s $10. The saving is real. It is also one dollar. IAUM launched June 15, 2021, the newest of these top gold ETFs, and at $7.47 billion the smallest. Its own 30-day median bid/ask spread is 0.02%. None of that is a warning to investors. It is a shorter record with less size behind it. If the cheapest possible number is what you want, this is the one. How the Top Gold ETFs Compare Fund Issuer Expense Ratio Net Assets Inception SPDR Gold Shares (GLD) State Street 0.40% $146B November 18, 2004 iShares Gold Trust (IAU) iShares 0.25% $65B January 21, 2005 SPDR Gold MiniShares (GLDM) State Street 0.10% $30B June 25, 2018 VanEck Gold Miners (GDX) VanEck 0.51% $28B May 16, 2006 iShares Gold Trust Micro (IAUM) iShares 0.09% $7B June 15, 2021 Net assets as of

6 Best Small-Cap ETFs to Buy in 2026

Business team meeting in a loft office, reviewing the best small-cap ETFs to invest in

Why Small Cap Stocks Earn a Place Beside Your US Equities You already own the big companies. If your portfolio holds an S&P 500 index fund, the bottom rung of American business is missing or weighted so lightly it rounds to nothing. Start with the arithmetic. On a $100,000 portfolio a 5% small cap sleeve is $5,000. Enough to move your return in a year when small cap stocks run, small enough that a 30% drawdown is minimal and can be recovered. All six funds below returned more than 32% over the trailing twelve months ended June 30, 2026. The appeal is diversification with an economic basis under it. Investors who own only an S&P 500 fund miss small cap stocks entirely, and the risk profile is why many hesitate. Small cap stocks can earn revenue differently than mega cap stocks, carry more debt sensitivity, and respond to domestic demand rather than a global sales mix, which your US equities capture. Size the sleeve for the drawdown, not the rally. Volatility cuts both ways, and the same volatile swing that lifts these stocks 40% takes it back. Before you invest a dollar, settle how many ETFs you need. » Start investing today: Explore top brokerage accounts with our detailed review What Counts as a Small Cap Stock Ask three index providers what a small cap stock is and you get three different answers. That settles which stocks end up in your small cap ETF. The cleanest answer comes from the Russell 2000. At the April 30, 2026 rank day, the market cap breakpoint separating large caps from small caps rose 24% to $5.7 billion, and its smallest company carried a market cap of $146.4 million.1 So within the Russell 2000 the market cap range representing small cap stocks runs from roughly $146 million to $5.7 billion. Any fixed dollar cutoff ages badly. A rule of thumb you learned as “under $2 billion” was true against a different market cap range and stopped being true. Total market capitalization drifts upward and the small cap index redraws its boundary. FTSE Russell now reconstitutes the Russell US indexes semi-annually, changed from annual effective 2026. Set that beside what the S&P 500 actually holds and the contrast drives everything below. The 6 Best Small Cap ETFs, Compared The six best small cap ETFs on one page, with the metrics that decide most choices. ETF iShares Core S&P Small-Cap ETF (IJR) iShares Russell 2000 ETF (IWM) Avantis US Small Cap Value ETF (AVUV) Vanguard Morningstar Small Cap Growth ETF (VBK) Avantis International Small Cap Value ETF (AVDV) Invesco S and P SmallCap Momentum ETF (XSMO) Index S&P SmallCap 600 Russell 2000 Actively managed Morningstar US Small Cap Growth Actively managed S&P SmallCap 600 Momentum Inception 5/22/2000 5/22/2000 9/24/2019 1/26/2004 9/24/2019 3/3/2005 Net Assets $112B $82B $29B $25B $19B $3B Expense Ratio 0.06% 0.19% 0.25% 0.05% 0.36% 0.36% Holdings 671 1,965 792 544 1,717 108 Top Ten % 7.32% (6/30) 3.42% 8.54% 9.3% 8.15% 24.28% 30-day SEC Yield 1.48% (7/31) 1.14% 1.21% 0.39% 2.64% 0.69% Past Year 37.42% 40.59% 39.00% 32.73% 34.63% 38.60% 3 year Avg. 15.98% 18.44% 19.06% 17.46% 26.06% 25.41% 5 year Avg. 7.30% 6.86% 12.29% 5.37% 13.81% 12.30% 10 year Avg. 11.47% 11.53% Not applicable 12.16% Not applicable 15.50% All returns are NAV basis, standardized, average annual, for periods ended June 30, 2026. Now the part comparison tables get wrong: more holdings is not automatically more diversification. IWM holds 1,965 stocks against IJR’s 671, and the two are not nested sets. Different indexes, different breakpoints, different entry rules, and IWM’s holdings reach further down the size and liquidity scale, where trading costs run higher. The bigger number is a poor guide to risk. Core Exposure: The Cheapest Core Small Cap ETF on the List IJR is the plain core small cap ETF here. It tracks the S&P SmallCap 600, held 671 stocks on August 12, 2026, and charges 0.06%.2 Investors underrate this. On $10,000, 0.06% costs $6 a year against $19 for IWM. Compounding can work on your returns or on your costs, so across thirty years the cheaper small cap ETF keeps more of whatever its index delivers. The top ten holdings account for 7.32% of assets on June 30, 2026, unconcentrated by any normal standard, though IWM’s wider net puts its top ten at 3.42%. One caution: the largest is a BlackRock cash fund at 1.96%, so these are the ten largest holdings, not the ten largest companies. IJR’s 30-day SEC yield was 1.48% on July 31, highest of the four that print one. Small cap dividends are not the reason to own this category, though a fraction of your return arriving as cash makes volatile years easier. Start with how to invest in ETFs. Broad Exposure: Every Small Cap the Russell Can Hold IWM is the small cap ETF most investors picture and owns more stocks than anything else here, holding 1,965 positions on August 12, 2026, tracking the Russell 2000.3 So does owning 1,965 companies buy anything the 671 do not? Some, and less than the count suggests. The Russell 2000 takes approximately the 2,000 smallest securities by market cap and index membership, with no profitability screen, so IWM owns companies that would fail the S&P SmallCap 600 screen at the point of addition. That widens the range of outcomes rather than raising the return you should expect. IWM led these funds at 40.59% over one year and trailed IJR over the five-year performance window, 6.86% against 7.30%, on the same inclusion policy. The fee is 0.19%, three times IJR’s, for a small cap ETF that tracks a looser small cap index. Those costs can compound the way returns do, only against you. Value: Where Profitability Meets Price AVUV is actively managed and does not seek to replicate an index.4 That sentence makes some investors close the tab. Active does not have to mean a hunch. Avantis emphasizes smaller stocks trading at low prices relative to book value, weighted

Best Bitcoin ETFs in 2026: Which Fund Is Right for You?

Bitcoin coins in front of a falling candlestick chart, illustrating how to choose the best Bitcoin ETFs to invest in

We selected the five largest Bitcoin ETFs that hold Bitcoin directly and have competitive expense ratios, using fund data available in August 2026. The Five Leading Bitcoin ETFs, Compared Fund (ticker) Sponsor fee Net assets 30-day median spread Bitcoin custodian iShares Bitcoin Trust ETF (IBIT) 0.25% $48.4B 0.03% (Aug 7) Coinbase Custody Trust Company, LLC* Fidelity Wise Origin Bitcoin Fund (FBTC) 0.25% $10.8B 0.04% (Aug 6) Fidelity Digital Assets, National Association Grayscale Bitcoin Mini Trust ETF (BTC) 0.15% $3.8B 0.04% (Aug 7) Coinbase Custody Trust Company, LLC* Bitwise Bitcoin ETF (BITB) 0.20% $2.4B 0.03% (Aug 6) Coinbase Custody Trust Co., LLC ARK 21Shares Bitcoin ETF (ARKB) 0.21% $2.2B 0.05% (Aug 6) Coinbase Custody Trust Company, LLC; BitGo Bank & Trust, N.A.; BitGo New York Trust Company, LLC; Anchorage Digital Bank N.A. *IBIT and BTC each name Anchorage Digital Bank N.A. as an additional bitcoin custodian. IBIT’s prospectus describes it as an available alternative rather than a concurrent one. What a Spot Bitcoin ETF Actually Is For simplicity, many call these products Bitcoin ETFs. They hold Bitcoin directly, giving investors exposure to Bitcoin without having to buy or store it themselves. Technically, these products are structured as commodity trusts, not traditional ETFs. They are regulated by the SEC and must meet federal securities laws, but they do not follow all of the rules that apply to conventional ETFs and mutual funds under the Investment Company Act of 1940. That means they have different requirements around areas such as custody and valuation.1 The SEC approved spot Bitcoin ETFs in January 2024 but made clear that the approval did not endorse Bitcoin itself. No share is insured by the Federal Deposit Insurance Corporation or any other governmental agency. Bitcoin itself is a commodity under the Commodity Exchange Act, and the CFTC keeps general anti-fraud and manipulation authority over virtual currency cash markets, while saying its oversight of those cash markets is limited.2 Share Price and Net Asset Value Are Two Numbers Net asset value is struck once each business day against a reference index, and that index price is the official mark. The price of bitcoin moves overnight and at weekends while the shares do not, because, as we mentioned previously, these funds trade during exchange hours and bitcoin trades 24/7. Authorized participants create new shares when demand rises, redeeming them in blocks called Baskets, and that arbitrage keeps the market price close to net asset value.3 It’s worth noting that discrepancies still appear. In secondary markets the market price is whatever the last buyer paid, so a premium raises what you pay and a discount cuts what you receive. What counts is the change between the premium or discount you buy at, and the one you sell at. Share prices stay closely tied to the price of bitcoin. Closely tied, but not identical. Why Spot Funds Replaced Bitcoin Futures Futures bitcoin ETFs track derivative futures contracts instead of holding real bitcoin. Those futures contracts expire and roll forward, which creates tracking differences and can cut returns when later-dated contracts trade above spot bitcoin. Spot funds hold bitcoin itself in secure regulated storage and track bitcoin more cleanly than bitcoin futures did. Mutual funds transact at the next calculated net asset value once a day; unlike mutual funds, a Bitcoin ETF trades all session on its listing exchange, which for these five means the Nasdaq, NYSE, or Cboe. The 2x Bitcoin Strategy ETF uses futures to target twice a daily return, resets that target every day, and is not a spot fund. » Start investing today: Explore top brokerage accounts with our detailed review Picking the Best Bitcoin ETF for How You Invest Three questions can easily sort a Bitcoin ETF shortlist: how long you hold, how much you move, and who holds the bitcoin. The best Bitcoin ETF for a trader is rarely the best Bitcoin ETF for a buy-and-hold type investor. iShares Bitcoin Trust ETF: Built for Size The most traded Bitcoin ETF is the iShares Bitcoin Trust ETF, which held $48.42 billion on August 7 at a 0.03% median bid/ask spread, with 30-day average volume of 35,697,747 shares.4 It alone publishes a standardized volume figure, so the group runs on median spreads, and it ranks among the largest ETFs in the market. Strength: by far the largest fund here, and the only one publishing average volume, so you can size an order against real data. Limitation: 0.25% ties it for priciest, and BITB matches its spread for less. BTC and BITB: Cheapest to Hold Grayscale’s Mini Trust charges 0.15% against $3.83 billion at a 0.04% median spread.5 Bitwise charges 0.20% against $2.41 billion at 0.03%. It publishes the bitcoin represented by each share an a daily basis and commissions independent proof-of-reserve examinations.6 Strength: BTC’s management fees cost $15 a year on $10,000 against IBIT’s $25, and BITB matches IBIT’s spread for less. Limitation: both are smaller than IBIT, so check live spreads and book depth and use a limit order for size. FBTC and ARKB: Who Holds the Coins Fidelity charges 0.25% and held $10.81 billion as of July 31, 2026 at a 0.04% median spread.7 Its bitcoin is held by Fidelity Digital Assets, a sponsor affiliate rather than an outside firm. ARK 21Shares charges 0.21% against $2.23 billion at 0.05%, the widest here.8 Its latest 10-Q names four custodians across three organizations.9 Four of the five use Coinbase Custody, and three of those four also name Anchorage Digital Bank. Only FBTC uses neither. ARKB lists the longest roster and does not disclose how its bitcoin is allocated among them, so a longer list of custodians tells you less than it appears to do. Fees Against Spreads, and Why Holding Period Decides This is where most Bitcoin ETF comparisons go south. Management fees recur every year you hold; the spread is a one-time trading cost. Which dominates depends on time. On $10,000, IBIT’s 0.25% costs $25 a year against BTC’s $15. BTC’s spread is one basis point wider, roughly $1 per

The Best Gold ETF to Invest $1,000 in Right Now

Shiny gold bars stacked on a black surface, representing the best gold ETF to invest $1,000 in right now

Gold as a Safe Haven Asset Something rattles the market. The dollar slips, inflation headlines stack up, and the cash in your savings account feels less like security than a slow leak. Gold earns its safe haven label by answering to different pressures than stocks and bonds. Governments issue debt, central banks move rates, currencies adjust against each other. Gold sits outside all of that, priced by a global market trading around the world every day. Here’s the honest version. Gold pays you nothing while you hold it, so investing in it works as diversification and as an inflation hedge rather than as the engine of your returns. That stability carries a quiet upside in a taxable account. A dividend fund gives you income every quarter, with a tax bill to match, whether you want it or not. Gold ETFs on the other hand, throw off no dividends, so year to year there is almost nothing to report. The trusts do sell a sliver of metal each month to cover expenses, which passes through as a small reportable amount, and the rest of the bill waits until you sell. That is why most investors reach for gold to protect what they already have. Before adding another position, look at how many funds a portfolio actually needs. » Start investing today: Explore top brokerage accounts with our detailed review How Gold ETFs Work Buying gold ETFs is not going to put bars in your hands. You buy shares that trade on an exchange, and a trust holds the metal for everyone who owns those ETF shares. The mechanics match how to buy your first ETF. Your account shows a ticker, not a safe. Funds That Hold Physical Gold Bullion The largest gold ETFs are trusts that own physical gold bullion, nothing else. The trust buys bars, stores them in a vault, and issues shares against those holdings. A custodian verifies the bars exist, which separates these ETFs from a promise. That structure hands you direct exposure to the actual metal. When gold rises 10%, these gold ETFs tend to track it closely, minus the annual fee. Their share price should track the metal in the vault rather than a manager’s bets on stocks. You never take delivery of physical metal, and never insure a safe. What you own is a claim on the trust’s holdings, priced live on the exchange at a market price anyone can keep an eye on. The Best Gold ETF for $1,000 Three bullion ETFs dominate, all from issuers you’ve heard of, all with identical holdings. Choosing the best gold etf for a $1,000 investment comes down to two numbers, what the trust takes each year and how heavily the fund trades. Here is where the major precious metals funds stand. The Best Gold ETF for $1,000 Issuer Fund Ticker Net assets Expense ratio Avg daily volume State Street SPDR Gold MiniShares GLDM $28.5B 0.10% 3,237,047 BlackRock iShares Gold Trust IAU $59.4B 0.25% 4,304,350 State Street SPDR Gold Shares GLD $130.3B 0.40% 4,942,316 BlackRock iShares Silver Trust SLV $28.5B 0.50% 11,490,049 VanEck Gold Miners GDX $22.6B 0.51% 13,788,568 Expense ratios and net assets come from each issuer’s fund page, as of late July 2026, and the GLDM figures are as of June 2026, the most recent State Street publishes. Volume figures are average daily share counts from the ETF data provider Stock Analysis, pulled August 4, 2026 so the whole column measures the same window of time.1 One warning on that last column. Share counts are not like-for-like, since a GLD share carries several times the dollar value of a GLDM share. Read volume as a rough signal of how crowded the exchange is around a fund. SPDR Gold Shares and the Cheaper SPDR Gold MiniShares SPDR Gold Shares is the original and still the giant among gold ETFs. It launched back in November 2004 and carries a 0.40% gross expense ratio against roughly $130.3 billion in net assets.2 That size buys enormous liquidity, and the fund shows up on every list of the largest ETFs by assets. State Street also runs a second fund on the same bullion. SPDR Gold MiniShares (GLDM) started in June 2018 and charges 0.10%. Same issuer, same metal, one quarter of the fee. For buy-and-hold money, MiniShares is the SPDR gold product to own. So a fair question is; why would anyone pay four times as much? Size does something at the trading screen that a low fee never will. The larger fund carries a heavily traded listed options market, which lets a trader write covered calls against a gold position or buy protection without hunting for a counterparty. Big orders also fill closer to the quoted price at that kind of volume. Both State Street funds post a 30 day median bid/ask spread of 0.01%, so a typical retail trade sees the same friction either way. The advantage arrives when your order is large, your timing is short, or an options chain is part of the plan. iShares Gold Trust and Its Lower Expense Ratio iShares Gold Trust sits between the two SPDR gold ETFs. IAU has run since January 2005, holds about $59.4 billion in net assets, and charges a 0.25% sponsor’s fee.3 That’s a cheaper annual charge than the original by a wide margin. IAU deserves a look when your broker offers it commission-free and leaves GLDM off the list. Check the fund page at iShares, then the page for GLDM. Comparing Expense Ratios Expense ratios look harmless on $1,000. A 0.40% fee is a cost of about $4 a year. GLDM’s 0.10% runs about $1.4 Three dollars. Who cares? You should, and here’s why. That cost happens whether the gold price rises or falls, and it repeats every year you hold the fund. On a flat $1,000 balance, the cheaper fee structure keeps roughly $30 in your account across a decade. Scale the position to $10,000 and it’s $300. The management cost is the one number you control

The 5 Best Bond ETFs to Buy in 2026

Magnifying glass examining financial bond documents, representing how to choose the best bond ETFs to buy

What Fixed Income Really Buys You Ask anyone who held only stocks through the last crash what they wish they’d owned alongside them. Fixed income, every time. Bonds and stocks rarely fall together. Bonds pay you to lend. You hand over principal, the borrower sends interest payments on schedule, and bond ETFs pass that income to your account. Predictable payments separate fixed income securities from stocks. Fixed income investments are why investing through a drawdown stays survivable, and bond ETFs are how most people own bonds. The bond market has grown fast. Back in May 2022, BlackRock projected that global bond ETF assets would triple to $5 trillion by 2030, from $1.7 trillion at the time, after five years in which bond ETFs grew 23.4% a year through December 2021 against 9.5% for open-end mutual funds.1 So bond ETFs can help twice over: smooth out the ride, and the bonds keep earning income while doing it. Before buying more ETFs, you might want to check how many ETFs you actually need. How Bond ETFs and Bond Mutual Funds Differ Bond ETFs and bond mutual funds both pool cash and buy bonds. The difference is how you trade those bonds. Exchange traded funds (ETFs) price all day on an exchange, so you watch the price move. Most bond funds built as mutual funds settle once, at the closing net asset value. Bond ETFs, though, settle on the exchange in seconds, and that liquidity is the edge exchange traded funds hold over mutual funds. Here’s how to invest in ETFs if you’re new. Turnover is where the tax difference shows up. Mutual funds can distribute capital gains when managers sell securities inside the fund, creating a tax bill for investors even if they never sold their shares. The ETF structure absorbs most of that, which is why ETFs beat mutual funds on tax efficiency in a taxable account. Holdings are reported daily too, so you know exactly what you own. The Low Cost Advantage of Index Bond ETFs Cost is where low cost index bond ETFs really come out ahead. Most charge between 0.03% and 0.06% a year, which is roughly what index investing in bonds costs once a computer does the picking. Morningstar’s 2026 fee study put the asset-weighted average expense ratio across US funds and ETFs at 0.32% for 2025, roughly ten times what a low cost index bond ETF charges, and expenses like that come out of your return every year, in every market.2 Active managers earn their fee by responding to market changes, and active bond ETFs can adapt to market dislocations in real time in a way an index tracker never will. Passive index ETFs hand you thousands of bonds for almost nothing. Core-plus bond ETFs sit between the two, holding an investment grade core plus a slice of high-yield and emerging market debt. Why Bond Funds and ETFs Have No Maturity Date Here’s the misconception worth clearing up: that a bond fund matures the way a single bond does. Individual bonds do carry a maturity date and real default risk, and unless there is a default, you get your principal back on that day. Unlike individual bonds however, bond ETFs keep rolling, since the fund sells underlying securities as those bonds approach maturity and buys new bonds. The maturity date never arrives, so the net asset value and the share price float with interest rates instead. » Looking for a guaranteed income? Explore today’s top CD rates How to Match the Best Bond ETFs to One Job So which job is open in your portfolio right now? Many investors scan a list of the best bond ETFs, buy the top name, and hold bonds for a job they never really had. Investing in fixed income works when every fund has an assignment, a purpose. Five jobs, five ETFs. You don’t need all five, but understanding each role helps you choose the right bond ETF for your portfolio. Read the summary prospectus first. It tells you the fund’s investment objectives, which bonds and securities it holds, its expenses, and its risk. Ticker Job Index tracked Holdings Expense ratio Yield (30-day SEC) Duration BND Core allocation Bloomberg U.S. Aggregate 11,476 0.03% 4.61% Intermediate SGOV Parked cash ICE 0-3 Month T-Bill 23 0.09% 3.57% 0.11 years VTEB Tax-free income S&P AMT-Free Muni 10,570 0.03% 3.56% Intermediate VGIT Drawdown ballast Bloomberg Treasury 3-10 Yr 105 0.03% 4.36% 3 to 10 years VTIP Inflation protection Bloomberg TIPS 0-5 Yr 25 0.03% 2.02% 0 to 5 years All yields shown are 30-day SEC yields. Vanguard yields as of July 23 and July 24, 2026. BND and VTIP holdings as of June 30, 2026, BND net assets as of June 30, 2026. SGOV yield as of July 24, 2026, with holdings, net assets, and duration as of July 27, 2026. Expense ratios as reported on each fund’s issuer profile, most recent prospectus dates December 2025 through April 2026. » Saving for the short-term? Start with the best places to park short term cash instead. BND: The Core of a Bond Portfolio Best for: a core U.S. bond allocation. BND is the default answer for the middle of a bond portfolio. The fund tracks the Bloomberg U.S. Aggregate Float Adjusted Index, so Treasury bonds, agency bonds, and investment grade corporate bonds arrive in one ticker. Net assets sat at $159.8 billion as of June 30, 2026, the largest fund in this lineup by a wide margin.3 Cost is what investors underestimate when investing in bonds. At a 0.03% expense ratio, a $10,000 position costs $3 a year. Just three dollars. On the other hand, an actively managed bond fund charging 0.45% takes $45 annually whether the bond market rises or falls, and those expenses compound against your other investments. Pair these bond ETFs with a stock index fund and you have the simplest 3-fund portfolio. » Start investing today: Explore top brokerage accounts with our detailed review What 11,476 Holdings Actually Get You

How to Build an ETF Portfolio That Can Last a Lifetime

Wooden figures of a senior couple beside growing stacks of coins, representing a long-term ETF portfolio built to last a lifetime

How to Build an ETF Portfolio That Lasts a Lifetime Imagine there is an account you open in your twenties and still trust into your sixties. That’s the goal. A portfolio you can hold on to through booms, crashes, job changes, and every headline in between, without tearing it apart each year or losing sleep over performance. Exchange traded funds (ETFs) make that staying power possible. One fund can hold hundreds or even thousands of companies, trades like a stock, and costs almost nothing to own. You get broad exposure, low fees, and a structure built for decades of growth. A good ETF portfolio holds the right mix of funds, and the right mix beats a crowded lineup every time. Plenty of experienced investors overbuild, stacking funds on top of funds. Many investors would do better with less. New to this? Our guide on how to invest in ETFs covers the mechanics. This one covers the plan. Seven steps: set your goal, choose your allocation, pick low cost core funds, add diversification where it helps, cut overlap, match your risk, and rebalance. » Start investing today: Explore top brokerage accounts with our detailed review Start With Your Financial Goals Before you buy a single fund, answer one question. What is this money actually for? Your financial goals decide everything that follows. For example, money you’ll need within a year or two has no business in the stock market. But cash you won’t touch for thirty years can ride out almost anything. For retirement, a house down the road, income later in life, or long-term growth, each goal points to a different setup. Your investment objectives set the time horizon, and the time horizon sets how much risk you can carry. Match the funds to those investment objectives. A lot of poor investment decisions start with a mismatch between goal and account. Good investment decisions begin with a clear goal. Someone saving for a wedding shouldn’t run the same investment strategy as someone forty years out. The best investing strategy is the one you stick with, and serves your end goal.. If your objective is retirement, the mix will evolve as you age. Our breakdown of the right allocation at every age shows how that glide works. Once your investment goals are clear, the rest gets much easier. » Ready to invest for retirement? Check out our review on the top IRA accounts Choose Your Asset Allocation Your asset allocation is the split between stocks, bonds, and other asset classes. It determines how your portfolio behaves more than any single fund you pick. Nail the asset allocation and the rest is just details. Stocks give you growth, and with it, volatility. Bonds on the other hand, bring stability and income. A strategy for a young investor might be to hold 90% stocks and 10% bonds. For someone near retirement, that might flip closer to 50/50. Your investment portfolio should reflect the risk you can live with, not the one that looks good on paper. Spreading across different asset classes smooths the ride. Balancing Stocks, Bonds, and Other Asset Classes Most portfolios are built from a few asset classes: US stocks, international stocks, and bonds. Some also add small slices of other asset classes like real estate or commodities. The bond side is where people get lazy. A single fund like Vanguard’s Total Bond Market ETF (BND) holds thousands of US bonds in one ticker, and its expense ratio is just 0.03%, against 0.53% for the average similar fund.1 That’s your stability sleeve, sorted. Whatever your stock allocation, a clean starting point like a simple three-fund portfolio is hard to beat. Pick Low-Cost Core ETFs With your asset allocation set, you fill it with low cost core funds. A broad index ETF is the workhorse here. Rather than pay professional managers to pick winners, you can buy the whole market for a rock-bottom fee. An index ETF just mirrors its market. Cost is the one variable you have 100% control over. Vanguard’s Total Stock Market ETF (VTI) holds the entire US market and carries an expense ratio of 0.03%, compared to 0.72% for the average similar fund.2 One holding and you own US stocks top to bottom. That fee difference looks tiny, but over a lifetime, it isn’t. How the Expense Ratio Shapes Your Net Return The expense ratio is the yearly fee a fund charges, taken straight from your return. On a $100,000 balance, a 0.03% expense ratio costs $30 a year. A 0.72% fund costs $720 for the same holding. Run that across thirty years of compounding and you’re leaving tens of thousands on the table. Index funds keep costs low, and that’s the advantage. They usually undercut actively managed mutual funds on price. Actively managed ETFs and traditional mutual funds carry higher management fees, and those fees don’t buy better results for most investors. ETFs also win on tax efficiency over comparable mutual funds, handy in a taxable account, especially for high turnover funds. Want the full comparison? See how ETFs compare to mutual funds. How to Find ETFs Worth Holding for Life To find ETFs you can hold forever, keep the checklist short. You want broad exposure, a low expense ratio, healthy volume, and an index you understand. ETFs trade all day on major stock exchanges, and a fund’s price tracks the net asset value of its holdings. Good ETFs track their index closely and stay cheap. A total-market fund built on US large cap stocks and the rest of the market covers most of it. Want the numbers in one place? Grab our free index fund cheat sheet and run any fund past it before you buy. Past performance never guarantees future results, so you may want to focus on low cost ETFs and let time do the work. Building a Diversified ETF Portfolio A diversified ETF portfolio spreads your money so no single company, sector, or country can sink you. Diversification reduces the risk of major

ETF Overlap Explained: Is It Hurting Your Portfolio?

Overlapping puzzle pieces with finance and economy symbols, illustrating ETF overlap and how duplicate holdings affect a portfolio

What ETF Overlap Really Means More funds should mean more diversification, right? That’s the instinct, anyway. You buy a handful of equity ETFs, spread your investment around, and figure you’ve covered your bases. Then you look under the hood only to find out you are not as diversified as you thought. Exchange traded funds (ETFs) are a basket of different investments, and the popular ETFs hold the same underlying securities at the top of the list. So when you hold multiple ETFs, you often buy the same companies again and again. One fund calls itself large-cap. Another calls itself growth. Pull their holdings, and the top names look strangely familiar, the same giants people refer to on any large-cap list. Even a single security like Nvidia can lead the number-one spot in several funds at once, and that one security drives more of your return than you’d think. That’s the point worth checking before you buy the next fund. And if you’re deciding between ETFs and mutual funds, the same trap applies to both. After all, one ETF can provide access to hundreds of stocks, which is great, right up until the next fund you buy holds the very same ones. Why It Happens in Mutual Funds and ETFs Alike This isn’t an ETF thing, by the way. Mutual funds do exactly the same thing. Most index funds, whether they trade as a mutual fund or an ETF, weight their holdings by company size, so the biggest companies are always going to be the ones at the top of just about every broad fund. And that means, if you buy an S&P 500 index mutual fund and an S&P 500 ETF, you’re basically buying the same thing, just with different labels. In a real sense, only the ticker changes. » Start investing today: Explore top brokerage accounts with our detailed review VOO vs VTI: Two Funds, One Portfolio Take the two most popular index ETFs around and compare VOO vs VTI directly. On paper they look like different funds with different jobs. VOO tracks the S&P 500, the 500 largest U.S. companies. VTI tracks the total U.S. market and holds 3,448 stocks, nearly seven times as many. Two mandates on paper. You’d expect two portfolios. But the reality isn’t quite so exciting. If you compare VOO and VTI at the top holdings, you’ll find they’re basically twins. And that’s because the biggest companies dominate both. Those giant names have so much weight that all the extra small caps in VTI barely even show up on the radar. The number backs it up. According to ETF Research Center, the two have an 88% overlap by total weight.1 Comparing the Top Holdings of Each Fund Here’s where it gets interesting. In VOO, the ten largest holdings make up roughly 36% of the fund, led by Nvidia at 7.89%.2 Apple sits right behind at 7.05%, then Microsoft, Amazon, and Alphabet. For example, VTI holds 3,448 stocks, yet its top ten holdings mirror VOO’s and have roughly 32% of the fund concentrated in the top ten.3 VOO vs VTI: Overlap Comparison Holdings data as of 05/31/2026. Expense ratio as of 04/28/2026. Returns/price as of 06/30/2026. Data point VOO VTI Tracks S&P 500 Index CRSP US Total Market Index Stocks held 503 3,448 Expense ratio 0.03% 0.03% Largest holding Nvidia Nvidia Largest holding weight (%) 7.89% 6.70% Top ten holdings weight (%) 36.41% 31.87% Past year return 22.34% 23.18% Past 10 year average return 15.47% 15.03% Overlap by total weight 88% 88% The stocks line up in the same order, with the weights only slightly lower in VTI due to increased holdings. The overlapping holdings at the top are what you’re really buying when you own both funds. Owning VTI on top of VOO doesn’t hand you thousands of fresh companies to spread your risk. It hands you a slightly longer tail of tiny positions, while the mega-caps you already held through VOO get another touch. For most investors chasing broad exposure, one fund tracks that market just fine. » Stay ahead of your finances: Join our free newsletters today How Overlapping Holdings Stack Up A fund holding one security, Nvidia, at 8% is fine. The trouble starts when you stack funds that all lean on the same names. Say you like growth, so you pair VOO with a growth fund and a tech fund. Now look at the overlapping holdings you own across those multiple ETFs. In VUG, the Vanguard growth ETF, Nvidia is 13.10% and Apple 12.32%, the same names that top VOO and VTI, only carrying more weight.4 VGT, the Vanguard information technology fund, goes further and puts about 42% of the fund in Nvidia, Apple, and Microsoft alone, with Nvidia at 16.78%.5 Hold multiple funds like these, and the same three companies keep leading every single one. If you want the fund-level detail, growth funds like VUG and QQQM break down cleanly, and our roundup of the best growth ETFs covers the field in a more diverse way. When Growth and Tech Funds Track the Same Giants Here’s the part that counts and you don’t want to miss. Give each of those four funds an equal 25% slice, then blend their Nvidia weights together. Nvidia’s weight alone lands at about 11% of your whole portfolio. With the second holding, apple included, it works out to be another 10% roughly. Two companies, a fifth of everything, from a portfolio you built to be diversified. No single security should run your whole portfolio like that. That’s really high overlap, and most investors don’t realize it until they add up the company weight themselves. With QQQ, the overlap barely changes, since QQQ tracks the Nasdaq-100 and tends to focus on the same mega-cap technology names. When one security tops four funds, its swings become yours. Certain stocks simply dominate every technology-heavy fund, and the same handful leads across sectors. Hold multiple ETFs that all focus on tech, and the diversification you expected turns into

Best AI ETFs for 2026: How to Invest in Artificial Intelligence

Person typing on a laptop with artificial intelligence graphics, representing investing in AI through ETFs

You want a piece of the AI boom without betting everything on one chipmaker. The good news is, you can. An AI ETF holds a collection of companies tied to AI, and one share buys the whole group. You get six funds across the AI supply chain to choose from, plus some tips and tricks for comparing and choosing. These funds are geared towards long-term investors who want AI exposure but don’t want to pick single stocks. The thing is, if you get it wrong and pick the wrong fund, you’ll be paying a premium for companies you already own. The AI market has moved fast over the past few years, and the AI ETF space is getting crowded with new funds popping up all the time, from chips to AI tech in software. » Start investing today: Explore top brokerage accounts with our detailed review What Is an AI ETF? An AI ETF is an exchange-traded fund that owns shares in technology companies that are working on artificial intelligence. Think of it as getting pre-built AI stock exposure. Chipmakers, cloud providers, and generative AI developers, all in one neat package. Like other ETFs, it trades on the secondary market at a price that changes throughout the day, unlike mutual funds. New to the structure? Here is how ETFs work. Artificial intelligence ETFs give you the theme without researching the companies involved in AI development. AI ETF vs Technology ETF Here is where people slip up. A broad technology ETF and an AI ETF sound like twins. They hold the same tech stocks but aim at different things. A technology ETF targets companies across the whole tech sector. The iShares U.S. Technology ETF charges 0.38% and holds the broad U.S. tech sector, not an AI slice.1 An AI ETF narrows the lens to AI. Both own technology companies; the difference is focus. Want broad growth instead? Compare these with growth ETFs. How AI Stocks Compare to Funds Why not just buy the AI stocks directly? You can, but a fund can offer some upsides. For one thing, it can spread your risk across many AI stocks, which can cushion a single stumble. For most people building wealth over time, the fund means fewer decisions and fewer bad picks. AI ETFs and Mutual Funds You’ll also see AI mutual funds out there. The holdings can look similar, but the wrapper behaves differently. Exchange traded funds trade all day and usually cost less; mutual funds price once after the close and often charge higher fees. For a full head-to-head comparison, take a look at ETFs versus mutual funds. The bigger point though is taxes. When a fund manager trades in and out of positions often, those sales can trigger capital gains that get handed to shareholders, including people who never sold a single share. In a mutual fund, that leaves you owing tax on gains you didn’t cash out. The ETF structure sidesteps most of that, so those surprise capital gains distributions are far less likely to reach you. Chasing an actively managed or high-turnover AI fund? The ETF is the favored wrapper for it. In a taxable account, that edge adds up over time. The Types of AI Exposure Not every AI holding is a pure play. Some companies are directly exposed to demand for AI tech, like a model builder selling AI software. Others get only a little bit of exposure, a utility selling power to a data center will benefit some, even though AI isn’t its core business. A chipmaker, on the other hand, is right at the center of it, with a lot more direct exposure than that utility. When you scan an AI ETF, ask yourself what kind of exposure are you buying: pure play exposure or broader AI stock exposure? AI funds fall into a few different buckets. Some are all about the hardware: chips, memory, and the data centers that run the models. Others act like a next gen software ETF, holding the generative AI and application layer. A few even try to own the entire AI theme at once. Each bucket bets on capturing emerging growth opportunities inside AI technology as the buildout continues. 1. Semiconductors and AI Technology: SMH Chips are the foundation of AI technology, that’s why many investors start here. The VanEck Semiconductor ETF (SMH) holds 26 U.S.-listed chip names and charges 0.35%.2 Its top holdings are no surprise: Nvidia at 18.41% of the fund. The fund invests to correspond generally to a semiconductor index, tracking its price and yield performance, which sets the fund’s market price. Its 1-year return hit 150.62% as of 5/31/2026, an endpoint that flatters it, so do not bank on a repeat. See our best semiconductor ETFs. For further data on each ETF, scroll below. 2. Memory Chips: DRAM Memory is the next layer. AI models eat enormous amounts of it, and the Roundhill Memory ETF (DRAM) is pure play exposure to the memory makers that supply it.3 Its strategy is intensely concentrated, with Micron at 25.96%, and the fund’s active management gets to pick the names. The basket holds very few stocks, so expect significant volatility. Lean on a handful of names and one rough quarter from any single one can jolt the whole fund, which is the risk to keep in mind here. One catch: DRAM launched on April 2, 2026, so its record is thin. Its since-inception return of 161.51% is cumulative over roughly one quarter, not annualized, and there is no 1, 3, or 5-year data yet. With that said, the fund has currently broke the record to becoming the fastest-growing ETF to reach $20B in AUM. 3. Data Centers and Infrastructure: DTCR All that spending on AI has to live somewhere, that’s where data centers come in. The Global X Data Center and Digital Infrastructure ETF (DTCR) owns the REITs and infrastructure behind the AI technology buildout, led by Equinix at 12.30%, for 0.50% a year.4 Data centers take years to

Best ETFs for Monthly Income in a Taxable Account: SPYI & QQQI

Senior couple managing their finances at home, planning monthly income from ETFs like SPYI and QQQI in a taxable account

SPYI and QQQI in a Taxable Brokerage Account Most of your retirement money probably sits in a 401(k) or IRA, and you can’t touch it without a penalty until 59½. So what do you do if you want a paycheck from your investments right now? That’s where a taxable account comes in handy. There’s no age restriction and no withdrawal penalty, so you can just pull income even in the same month you earn it. SPYI and QQQI are built for exactly that situation. Both are ETFs that throw off large distributions every month, and both can be traded in any standard brokerage account. Income focused investors can use these ETFs to generate extra income on top of a salary, while retirees can fold them into a portfolio that covers living expenses without having to sell any shares. As a yield strategy, both fit in nicely into a wider mix of investments without you having to time the market or rethink your investing plan. Here’s the appeal in plain terms. You hold the ETFs, the distributions go into your account, and you can decide whether to spend the cash or reinvest it. For someone who wants extra yield from the market today instead of decades from now, that flexibility is the whole point. But, there are some real trade-offs, and we’ll get to them. How They Pay High Monthly Income How do these ETFs deliver double-digit yields when the S&P 500 itself yields barely over 1%? The short answer is covered calls. Each fund keeps full exposure to the index it tracks, then sells covered calls against those holdings and collects option premiums in return. Picture renting out the upside on individual stocks you already own. Tenants cover the rent; option buyers cover the premium. NEOS runs a data driven options strategy, it is done by selling call options that respond to market conditions and volatility instead of writing the same call options every month. Those premiums then become the bulk of what you receive. That’s how these funds generate high monthly income that typical monthly dividend ETFs can’t match on yield alone. They deliver far more than ordinary stock dividends. So what do you give up? Selling covered calls caps your upside, which is the real risk for an investor who is growth-minded. When the index runs past the strike price, the fund keeps the premium but forfeits the gain above it. That’s basically the trade for the yield. JEPI and JEPQ made this options strategy popular, and SPYI and QQQI pushed covered calls toward even higher distributions, but more importantly, a more convenient tax structure. One tax detail is built in from the start. Because both ETFs write broad-based index options, those contracts qualify as Section 1256 contracts, which the IRS taxes as 60% long-term and 40% short-term regardless of how long the fund holds them, but that’s not even the key to their efficiency.1 Inside the NEOS S&P 500 High Income ETF (SPYI) SPYI, known as the NEOS S&P 500 High Income ETF, is the older of the two funds. It launched in August 2022 and holds around $10.1 billion today. If you are looking for S&P 500 stocks with a nice monthly check, this is the fund for that. The NEOS S&P 500 High Income ETF (SPYI) tracks the S&P 500 while writing index call options on top, so the fund holds the same 500 large-cap stocks as a conventional index fund. Its underlying exposure shows up in the top holdings, a big-tech roster: NVDA at 7.64%, AAPL at 6.77%, MSFT at 4.29%, AMZN at 3.64%, and GOOGL at 3.22% as of late June 2026. Now let’s look at income. SPYI comes with a 12.08% distribution rate, with a 12-month trailing distribution rate of 11.78%, paid monthly at a 0.68% expense ratio.2 At a share price near $52, that’s roughly $0.53 a share every month. Shares trade right at NAV, with the market price and net asset value at $52.17 and $52.16 in late June, which keeps liquidity tight and day-to-day performance nice and smooth. Performance has held up well. Since it was launched back in August 2022, the NEOS S&P 500 High Income ETF has returned about 15.33% annualized, with a one-year total return of 23.88% and a three-year mark of 17.12%. Income investors tend to hold ETFs like this in a portfolio for the cash flow, knowing past performance can’t guarantee future results and that the call-writing trades away some of that capital appreciation. » Start investing today: Explore top brokerage accounts with our detailed review Inside the NEOS Nasdaq 100 High Income ETF (QQQI) QQQI is the younger sibling and, somehow, it has already managed to become the bigger fund. The NEOS Nasdaq 100 High Income ETF launched in January 2024 and has pulled in roughly $12.6 billion in net assets, outgrowing SPYI to rank among the largest option-income funds around. Same playbook, heavier on tech. If SPYI is the steady one, then QQQI is the high-octane version. QQQI also runs the covered call strategy but this time on the Nasdaq 100 index instead of the S&P 500 index, so its underlying exposure leans harder toward technology and communication services. Top holdings as of late June 2026: NVDA at 7.86%, AAPL at 6.94%, MU at 5.27%, MSFT at 4.43%, and AMZN at 4.11%. That’s a heavier semiconductor weighting than Invesco QQQ holders might expect, and it’s the reason why QQQI carries higher volatility than its S&P 500 cousin. The income runs hotter too. QQQI posts a 14.11% distribution rate, with a 12-month trailing distribution rate of 13.56%, paid monthly at the same 0.68% expense ratio.3 The share price right now is at $55, with the market price and NAV both at $54.94 in late June, giving you deep liquidity at a clean entry point. Performance since the January 2024 inception date has been strong: about 22.16% annualized, with a one-year return of 30.99%. The NEOS Nasdaq 100 High Income ETF is too young for a

Are Fidelity ZERO Index Funds Worth It? (The Catch)

White square block with the word ZERO, representing Fidelity ZERO index funds with no expense ratio

What Are Fidelity Zero Funds? What does a 0% expense ratio actually cost you? Nothing, and that’s the whole point. Most index fund investments lose a portion of their gains to fees every year, usually a few hundredths of a percent. The Fidelity Zero lineup drops that to nothing. The four funds (FNILX, FZIPX, FZROX, and FZILX) carry a 0% expense ratio with no minimum investment, and they’re available to retail investors only through a Fidelity account.1 So what do you actually keep? Every dollar these investments earn, minus taxes, will stay in your account and keep compounding. We’ve broken down the rest of these low cost investments in our guide to the best Fidelity index funds to own for life, but the Zero funds are in a tier of their own. A price of zero always has a story behind it though, and these Fidelity funds are no exception. Meet the Four Fidelity Funds Four funds, four slices of the market. Each one tracks a different proprietary Fidelity index, and each holds its own basket of securities. Here’s what you’ll find inside. This is the lineup at a glance, sorted biggest to smallest by assets under management: Fund What it tracks (and resembles) Net assets 5-Yr average annual return Holdings FZROX (ZERO Total Market) The entire U.S. stock market: large, mid, and small cap. Acts like VTSAX or FSKAX. ~$38.6B (largest) 13.12% 2,668 FNILX (ZERO Large Cap) The biggest U.S. companies. A stand-in for the S&P 500. ~$18.6B 13.92% 506 FZILX (ZERO International) Developed and emerging markets outside the U.S. ~$11.6B 9.28% 2,239 FZIPX (ZERO Extended Market) U.S. mid- and small-caps, the market minus the ~500 largest names. ~$2.5B (smallest) 7.68% 2,086 Every fund here charges a 0.00% expense ratio with no minimum. Net assets, holdings counts, and 1-year average annual returns are as of May 31, 2026, per each fund’s Fidelity page. FZROX: The Total Market Index Fund FZROX is the total market index fund of the group. It tracks Fidelity’s proprietary U.S. total-market benchmark and holds roughly 2,700 stocks, thousands of underlying securities across large, mid, and small caps.2 Picture the entire U.S. stock market squeezed into a single ticker, the same job a fund like VTSAX or FSKAX does. It’s also the largest of the four ZERO funds by a wide margin, with about $38.6 billion in net assets as of May 31, 2026, a subtle signal indicating that when investors buy just one, this is usually the one they pick.  As of May 2026, the top holdings are a roll call of American business: NVIDIA near 7% of assets, Apple around 6.2%, then Microsoft, Amazon, and Alphabet. One share buys a sliver of nearly the entire U.S. equity market. For plenty of investors, this one total market index fund is the whole stock sleeve of their portfolio. Its total assets keep climbing as money flows in. The fund pays dividends once a year, and the investments inside it change only when the index does. FNILX: The Zero Large Cap Index Fund FNILX is the large cap index fund, the closest thing here to an S&P 500 substitute. It tracks the Fidelity U.S. Large Cap Index, a proprietary benchmark of the biggest U.S. companies, much like the S&P 500 without licensing that name. On size, it is second only to FZROX, holding roughly $18.6 billion in assets, the most popular ZERO fund after the total-market pick.  This large cap index fund holds the same mega-cap securities that dominate FZROX, minus the mid and small caps. Want broad blue-chip exposure at a true zero cost? The Zero Large Cap Index Fund (FNILX) delivers exactly that. For a side-by-side with the usual names, see our roundup of the best S&P 500 index funds. Plenty of investors park their core equity investments in this large cap index fund and never look back. FZILX: The International Index Fund FZILX is the international index fund of the lineup, holding securities from developed and emerging markets outside the US. Treat it as a one-ticker way to own the rest of the world’s stock market, from Europe and Japan through to emerging names across Asia and Latin America. By assets it’s the third-largest of the four at about $11.6 billion, the biggest ZERO fund that invests beyond U.S. borders.  Add it to the two domestic funds and you’ve got global coverage for a grand total of zero in fund costs. International returns have trailed U.S. stocks for years, but spreading your assets worldwide cuts single-country risk. Want the full case for owning foreign equities? Here’s our take on the best international funds for global exposure. This international index fund is the simplest way to get that exposure inside Fidelity. FZIPX: The Extended Market Index Fund FZIPX is the extended market index fund, covering the part FNILX skips: the mid- and small-cap companies outside the largest names. Pair it with FNILX and you rebuild something close to FZROX’s total-market exposure across two funds. The extended market index fund tracks the Fidelity U.S. Extended Investable Market Index, the smaller and faster-moving slice of the market. That’s where tomorrow’s large caps hide today, and where these investments add a little growth. It’s also the smallest of the four by assets, around $2.5 billion, which fits its job: most investors bolt FZIPX on for completeness rather than build a portfolio around it. How a Zero Expense Ratio Index Fund Works A zero expense ratio index fund sounds like a typo. How does any firm run one for free? Fidelity isn’t doing charity here. It’s running a loss leader, plain and simple. Here’s the mechanism. A traditional fund passes its operating expenses to you through an expense ratio: the management fees, the record-keeping expenses, the licensing. Fidelity eats those expenses on the Zero funds instead. The net expense ratio ends up at 0.00% because Fidelity built its own proprietary indexes rather than licensing the S&P or CRSP benchmarks, which erases the biggest cost and slashes what you’d normally

This AI ETF Hit $10 Billion Faster Than Any ETF Ever (DRAM)

Artificial intelligence brain graphic on a tablet with data, representing the Roundhill Memory ETF (DRAM) and AI memory chip stocks

What Is the DRAM ETF? A fund that launched in April 2026 has already pulled in more money, faster, than any ETF in history. That fund is the DRAM ETF, and its story is centered around the chips that make AI run. So what is it? The DRAM ETF is the Roundhill Memory ETF, the first U.S.-listed ETF offering targeted exposure to global memory companies at the center of AI infrastructure demand.1 Roundhill built it as a pure play on the chips that store and move data. Most funds spread your investments across a broad market, this one zeroes in on a single corner of the chip industry. DRAM is an actively managed fund with quarterly rebalancing, and funds like it generally seek exposure to firms that earn most of their revenue from memory products. It currently holds 9 companies, so every name carries weight. For anyone investing in the AI space, the speed here is the story. Investors who watched the largest ETFs by AUM build up over decades do a double take. DRAM charges a 0.65% gross expense ratio and has just past $20 billion in total assets since launch.2 Its performance since the debut has been nothing short of remarkable. These are aggressive investments, poured in by the billion, and you’ll want to balance these holdings against your other investments. Inside the Roundhill Memory ETF The structure of the Roundhill Memory ETF is where it gets interesting. Under normal circumstances, the fund will invest primarily in equity securities of memory companies, or in swap agreements and forward contracts that provide exposure to those same firms. Filings say it puts at least 80% of net assets, plus borrowings for investment purposes, into securities of memory companies or instruments tied to them.3 The issuer counts a firm as a memory company when at least half its revenues or profits come from memory products. Here’s the catch. Many big makers trade overseas, so buying their common stocks directly is hard for a U.S. brokerage. To get around that, the issuer uses derivative instruments, mainly total return swaps, which are contracts with a bank that track a stock’s return rather than holding the share. Each weight is calculated by combining the direct stock with any swap, and the underlying securities can be tricky to value abroad. That setup keeps the fund inside the rules that let it qualify as a regulated investment company for tax purposes. Beyond stocks, the fund can hold preferred securities and a little debt securities, which sit between stocks and bonds. A government money market position, around 15% of assets, holds cash and short Treasuries as collateral behind the swaps. Its operating expenses run 0.65% a year, and those expenses come straight out of returns. The distribution arrives once annually, and that distribution is tiny because the 30-day SEC yield stays low. These are growth investments, not income payers, so the yield barely registers. The investment objectives center around memory. Active management means quarterly rebalancing, so the lineup is subject to change. You can pull the summary prospectus and other information from the fund’s website, an actively managed ETF at its core. Why Memory Powers AI Why has so much money rushed into one fund? The answer is found inside every AI data center. Large models chew through enormous amounts of data, and that data has to move fast from storage to the processor and back. The memory chips that shuttle it have become the choke point of the buildout. Roundhill’s pitch, paraphrased from its launch materials, is that investors had underrated this slice of AI infrastructure and that owning it is the opportunity. Model training is only part of the demand. Cloud platforms and the broader storage stack run on the same memory, which keeps AI hardware money flowing toward the category. How High Bandwidth Memory Feeds AI Chips High bandwidth memory, or HBM, is a stacked, ultra-fast chip that sits next to an AI processor and feeds it data fast enough to keep it working. Without enough HBM, even the strongest chip stalls. That’s the bottleneck. Demand from the AI sector has outrun what memory companies can produce, and their stocks have run hot. A limited number of manufacturers can build HBM at scale, because the technology takes years of research and heavy capital. Want a good look at the wider chip space? Our roundup of semiconductor ETFs covers it. Where DRAM and NAND Fit DRAM, short for dynamic random-access memory, is the working memory a computer uses moment to moment. NAND flash is storage, where data sits when idle. The DRAM ETF covers both, plus solid-state drives. Micron Technology is one of the few U.S. firms here, and investing in it bets that memory companies keep pricing power. The fund’s performance rides on demand, and the data on AI spending says it stays strong. That’s where your investments sit. DRAM ETF Top Holdings The DRAM ETF top holdings pack most of the fund into a few names. Roundhill reports each company’s weight by combining its directly held shares with its total return swap positions, and on that basis Micron Technology is the largest at roughly 29%. SK Hynix sits close behind near 25%, with Samsung Electronics around 18%. Add those up and three companies account for about 71% of the portfolio. Below the leaders the weights thin out fast: Kioxia near 8%, SanDisk close to 6%, Seagate and Western Digital around 4% apiece, then Nanya and Winbond rounding out the memory names. Micron is the one to look at twice. It appears three times in the holdings, once as common stock and twice through swaps, which is how it ends up as the single biggest position. There’s also a sizable cash piece: roughly 15% of assets sits in a government money market fund that backs the swap exposure rather than tracking memory chips directly. Step back from the tickers and the fund’s geographic split is close to even at the top. By region, memory exposure

High-Yield Savings Account vs Brokerage Account

Feet standing on a street with question marks and road markings, representing the choice between a high-yield savings account and a brokerage account

Where Should Your Money Go? So you have some cash set aside, and you’re weighing a high yield savings account vs brokerage account. Which one should hold it? Start with the question behind the question. Where should your money go right now? Most people juggle four goals at once. An emergency fund for worst case scenarios. Short term savings for a near purchase. Money to invest for long-term goals. Where to hold cash while you wait to invest it. Each goal carries its own timeline, and the timeline ultimately should decide the right account. Matching the Account to Your Goal Here’s the test. Need the cash within a few years? Liquidity wins, so keep your money safe and easy to access. Planning to invest for a decade or more? You can take on market risk for higher growth. A down payment due next spring belongs in short term savings. Retirement savings you won’t touch for 30 years can ride the market. The key differences between these accounts come down to the big question: when will you need the cash? Answer that, and your plan almost writes itself. That’s the core of good personal finance. What Is a High Yield Savings Account? A high yield savings account is a savings account that pays much more interest than a standard one. You’ll find the best rates at online banks and credit unions, which skip the cost of branches and pass the savings on to you as higher yields. Open one, move your cash in, and it starts working right away. Want to see what that looks like in dollars? How a High Yield Savings Account Works to Earn Interest The difference in actual dollars is bigger than most people expect. The national average savings account rate sat at just 0.38% APY in May 2026, while a strong high yield savings account paid roughly 4% to 5%.1 Park $10,000 at that 0.38% base rate and you earn about $38 over a year. Move it to a high yield savings account near 4%, and the interest earned jumps to roughly $400. Same cash, ten times the yields and the interest earnings. Banks set a base rate that tracks broader interest rates, so what you earn can change over time. A few tenths of a percent on the APY still add up, so compare the highest APY accounts. FDIC Insurance and Monthly Limits Safety is the other half of the appeal. A high yield savings account at an FDIC insured bank protects your deposit up to $250,000, so even if the bank stumbles your savings stay covered. FDIC insurance kicks in automatically at member banks and credit unions. There’s a tradeoff. These are interest bearing accounts built for saving, so some set a monthly limit, capping withdrawals at a certain number each cycle, and a transfer can sometimes take a couple of business days to clear. Your HYSA interest also counts as taxable income, so expect a tax form once you cross $10 in interest earned for the year. Want the competitive rates without the friction? Compare a few accounts first. Many traditional savings accounts can’t offer higher rates, because those traditional savings accounts pay for branches and tellers, which keeps yields low. What Is a Brokerage Account? A brokerage account is an account you use to buy and sell investments like stocks, bonds, ETFs, or whatever else fits your plan. Before you invest, you fund it with a deposit, then you invest in the stock market whenever you want. It does more than hold stocks, though. Many of these accounts double as a place to keep cash, write checks, and spend with a card. Account Features That Set Brokerage Accounts Apart The account features go well beyond trading. Most brokerage firms now offer check writing, debit cards, and bill pay, which blurs the line between investment accounts and a bank account. You can hold Treasury holdings, money market funds, and individual bonds alongside your stocks. Some investors even run a robo advisor inside the account to automate their transactions. Transfers usually settle within a couple of business days. These are also the accounts behind most retirement accounts, so the same features carry over to your long term investment. How Brokerage Cash Can Earn Interest Here’s the part people sometimes miss. The uninvested cash in a brokerage account doesn’t have to sit there dormant. Most brokers sweep it into a program that pays interest. Cash management options often pay yields close to a strong high yield savings account. Charles Schwab, for one, sweeps uninvested cash to a network of partner banks. A brokerage bank-sweep program spreads your cash across multiple FDIC member banks, which can push total FDIC coverage above the $250,000 single-bank limit.2 So that cash earns a return while you decide where to invest next. Each deposit clears fast, and you can move cash between investments without a separate bank transfer. High-Yield Savings Account vs Brokerage Account How the two accounts compare. Figures as of mid-2026. Feature High-Yield Savings Account Brokerage Account Best for Money you may need within a few years, such as an emergency fund or short term savings Money you can leave invested for the long term, such as retirement or building wealth What you can hold Cash deposits only Stocks, bonds, ETFs, money market funds, brokered CDs, and Treasuries Typical return National average 0.38% APY; top accounts roughly 4% to 5% APY Varies with the market; the S&P 500 has averaged about 10% a year since 1957 Earns interest on cash Yes, on the full balance Yes, on uninvested cash through money market sweeps Insurance FDIC insured up to $250,000 per bank SIPC up to $500,000 per customer (including $250,000 for cash); bank sweeps can extend FDIC across multiple banks Risk of losing money Very low; your principal is protected Yes; investments can fall in value, and no insurance covers market losses Liquidity High; cash is available quickly High for cash; selling some holdings can take a day or

Brokerage Account vs IRA: What’s the Difference?

Wooden figures balancing on a scale, representing the comparison between a brokerage account and an IRA

Two Types of Investment Accounts Most people saving use one of two main investment accounts, and plenty assume they should pick just one. You don’t. A brokerage account and an IRA do different jobs, so your choice depends on your financial goals and your timeline. A brokerage account is built for flexible investing at any age. An IRA, short for individual retirement account, carries tax advantages a brokerage account doesn’t have. IRAs are retirement accounts in the tax code. Taxable brokerage accounts are not. Both are investment accounts, both can hold the same investment funds and stocks, and both can grow your money for decades. They’re two tools in one drawer. One gives you freedom, the other tax advantages for following a few rules. What Is a Brokerage Account? A brokerage account is an investment account you open at a registered brokerage firm to buy and sell stocks, bonds, mutual funds and ETFs.1 Those exchange traded funds (ETFs) and other securities trade right through it. There’s no annual cap on what you add. Your money stays liquid, so you can sell and withdraw anytime. All investing involves risk, since values rise and fall. If you’d like to compare providers, see our list of best brokerage accounts. How an Individual Brokerage Account Works An individual brokerage account is the standard setup, owned by one person. You fund the individual brokerage account from your bank, pick from stocks, bonds, mutual funds and more, and place trades yourself. It’s self directed, so no advisor signs off. You can open an individual brokerage account online in minutes at almost any financial institution, often with no initial investment minimum. Once the cash settles, the individual brokerage account is yours to invest. Want to share ownership? A joint individual brokerage account works the same, two names instead of one. Taxes on a Taxable Brokerage Account Here’s the catch with taxable brokerage accounts: the IRS wants a cut along the way. Sell a stock for a $1,000 gain and that profit can be taxed the year you sell. Dividends and interest income get taxed too. Say you book $1,000 in investment earnings inside a taxable investment account. Depending on your bracket, you might pay taxes of a couple hundred dollars. A brokerage account is fully taxable. Taxable brokerage accounts give no shelter, so plan for the bill accordingly. That yearly drag is the price of the flexibility taxable brokerage accounts offer. What Is an Individual Retirement Account? An individual retirement account, or IRA, is built for retirement savings and comes with real tax benefits, and many traditional contributions are tax deductible. You can put in up to $7,500 a year for 2026. A brokerage account has no such cap. An individual retirement account comes in two types, a traditional IRA and a Roth IRA, taxed in opposite ways. Both are retirement accounts and tax advantaged accounts. The tax benefits are the whole point. Your money grows deferred or tax free, depending on which you pick.  Traditional IRA vs Roth IRA The difference between these two account types is about when you get the tax break. A traditional IRA often gives a tax deduction the year you contribute, so traditional IRA contributions can lower your taxable income now, and you pay income tax later, at withdrawal. A Roth IRA flips that. You fund a Roth IRA account with after tax dollars and claim no deduction today, so it grows deferred or tax free. Tax deductible contributions cut your bill now, while a Roth keeps its tax deductible perk for retirement instead. Younger savers often lean Roth. Want the retirement side first? Here’s our breakdown of Roth IRA vs Traditional IRA. How Tax Deferred Growth Works Inside a traditional IRA, your investments compound with no yearly tax bill, fully tax deferred. That’s tax deferred growth. You don’t report dividends or capital gains each year, so nothing leaks to taxes while you work. Letting the account grow tax deferred for two or three decades can mean tens of thousands more at retirement, because every dollar that would have gone to the IRS stays invested and compounds. The tax comes due only at withdrawal time. You can read more about the top investments to keep in an IRA to maximize your investment opportunities. Tax-Free Withdrawals From a Roth IRA The Roth IRA payoff lands in retirement. You already paid the tax going in, so your money grows tax free and qualified withdrawals come out completely tax free after 59½. Money in a Roth account just keeps building. That tax free growth is why a Roth IRA is so popular with younger investors. Tax free withdrawals also keep reported retirement income lower, and tax free growth rewards waiting. Once you reach retirement, the investments you hold can become just as important as the account itself. Here are some of the best ETFs to hold in an IRA during retirement. IRA Contribution Limits for 2026 For 2026, the total across all your IRAs is $7,500, or $8,600 if you’re 50 or older.2 Those IRA contribution limits cover a traditional IRA and a Roth IRA combined, not each separately. The annual contribution limits set by the IRS tend to rise every few years. Split your Roth IRA contributions and traditional dollars however you like under the cap. You can contribute to a Roth or a traditional account, your call. For the income side, see our guide to Roth IRA contribution limits. These contribution limits usually reset each January. Roth IRA Income Limits for 2026 A Roth IRA also has income limits. For 2026, you can make a full contribution if your income is under $153,000 single or $242,000 married filing jointly. Earn more and the amount you can contribute to a Roth phases down, then stops. A traditional IRA has no income ceiling to contribute, though a workplace retirement plan can limit your tax deduction. These income limits change every year, so check first so you can plan based on those limits. Brokerage

10 ETF Portfolios Backtested: The Results Might Surprise You

Business professionals analyzing data together, representing a backtest comparing the performance of 10 ETF portfolios

What We Tested and Why Portfolio Structure Matters If you had put $100,000 into any of these portfolios back in January 2016, the gap between the best outcome and the worst is an eye-opening $300,000. That’s what portfolio structure can cost or earn you over time. With so many ETFs available today, most people never get a direct side-by-side comparison backed by real data. That’s what we are putting in front of you today. We ran 10 model portfolios through 10 years of proprietary analysis (January 2016 to December 2025) on a $100,000 starting balance. These are the ETF portfolio structures investors debate most online, in books, and across investing communities, each built around different investment objectives, risk profiles, and underlying philosophies. Exchange-traded funds trade throughout the day on national stock exchanges at market prices, which makes them far more flexible than mutual funds for building and adjusting a diversified ETF portfolio.1 For a full comparison of how those structures differ, the ETFs vs. mutual funds article walks through the key differences. Each ETF portfolio below is built from individual securities, uses a unique investment strategy, and can be copied on most platforms. The net asset value of an ETF reflects its underlying holdings, but they trade at their market price throughout the day. The allocation model changes across each setup, and the results are more varied than most expect. If you’re new to exchange-traded funds, check out our guide on How to Invest in ETFs: Step-by-Step for Beginners before building your own portfolio. The 4 Stats That Actually Matter for Any Asset Allocation Decision So what numbers should you actually care about? For this test: 10-year CAGR, end balance on $100,000, standard deviation, and maximum drawdown. The CAGR gives you the annualized return over the full period. The end balance makes percentages tangible. Standard deviation measures year-to-year volatility, how much the annual returns bounced around to produce that CAGR. Lower standard deviation means a smoother ride, while higher means bigger swings in both directions. Max drawdown is the worst peak-to-trough loss during the period, which is tied to risk tolerance, because it tells you whether you could have held through the tough times. These four cover return, scale, volatility, and risk in one run. The Benchmark: Why VT Was Used as the Baseline Instead of the S&P 500, VT (Vanguard Total World Stock ETF) serves as the benchmark for this test. It represents the broadest possible equity exposure in a single fund, covering U.S., developed international, and emerging markets all at once. That makes it the most honest baseline for comparing portfolios with different geographic tilts. Every portfolio below is measured against it. Over the 10-year test period, VT posted an 11.77% CAGR, growing $100,000 to $304,201 with a -25.52% max drawdown and a standard deviation of 14.68%. Just so you know, the S&P 500 (via VOO) returned a 14.79% CAGR over the same period.2 The investment strategies that worked in this window all had a significant U.S. stock market focus, specifically on large-cap growth positions, and kept fixed income light despite climbing interest rates. » Stay ahead of your finances: Join our free newsletters today ETF Portfolio Examples: All 10 Tested Side by Side Here’s how all 10 ETF portfolio examples did from January 2016 through December 2025, starting from $100,000. All results are from proprietary analysis. Mutual funds and actively managed products were excluded. Every position here is a passive index ETF or low-cost fund. VT (Vanguard Total World Stock ETF) is the benchmark.  10 ETF Portfolios Backtested Over 10 Years | January 2016 – December 2025 | $100,000 Starting Balance Portfolio # of ETFs 10-Yr CAGR End Balance ($100K Start) Std Dev Max Drawdown VT — Benchmark 1 11.77% $304,201 14.68% -25.52% Warren Buffett (2-Fund) 2 13.57% $356,866 13.56% -21.98% DS Taxable Growth (2-Fund) 2 16.62% $465,175 16.17% -27.75% Bogleheads (3-Fund) 3 10.79% $278,688 12.42% -23.12% YouTubers (3-Fund) 3 15.63% $427,376 15.04% -24.03% Paul Merriman (4-Fund) 4 11.87% $306,877 16.68% -27.42% Ray Dalio All Weather (5-Fund) 5 6.61% $189,595 8.55% -20.68% David Swensen (6-Fund) 6 7.95% $214,930 10.88% -22.31% Coffeehouse (7-Fund) 7 7.07% $197,996 10.52% -19.70% DS Ultimate (9-Fund) 9 17.36% $495,844 15.65% -26.60% Notes: All results from proprietary Portfolio Visualizer analysis (Jan 2016–Dec 2025). VBR used as small-cap value proxy for Paul Merriman backtest; AVUV recommended going forward. FBTC excluded from DS Ultimate historical data due to BTC early momentum being an outlier. 1. Total World 1-Fund ETF Portfolio (VT): The Benchmark One ETF and done. The world’s simplest portfolio strategy is the Vanguard Total World Stock ETF (VT). It holds close to 10,000 stocks across global markets that consist of the U.S., developed international, and emerging markets. It’s also the benchmark for this entire test, chosen because it gives you the broadest possible equity exposure out there, that you can get with one convenient purchase. If your portfolio can’t beat it, a single 0.06% ETF would have done the job. The results after 10 years: VT returned 11.77% a year, ending up with a balance of $304,201, with a standard deviation of 14.68%, that’s volatile, and a max drawdown of -25.52%, a significant fall. And VT trailed the S&P 500 by around 3 percentage points a year, mostly because international stocks didn’t do nearly as well. The expense ratio is 0.06%, which is low for one ETF covering the entire global market. If you want broad market exposure and zero maintenance then you can’t get much simpler than this. 2. Warren Buffett 2-Fund Portfolio Buffett recommends something here that actually makes a lot of sense; put 90% of your portfolio funds into a low-cost S&P 500 ETF and 10% into a short-term government bond ETF. You can take his word for a lot, he has credibility. His track record at Berkshire Hathaway spans decades and has made him one of the wealthiest people alive.  The results after 10 years: a 13.57% yearly return, with an ending balance of $356,866, standard deviation of 13.56%

How To Invest In Crypto For Beginners (2026)

Young investor using a cryptocurrency exchange app on a smartphone, learning how to buy crypto as a beginner

What Is Cryptocurrency? Bitcoin launched in 2009 as the first cryptocurrency, built on a simple premise: a form of digital money that operates without a central bank, with a decentralized network of computers verifying transactions instead of a bank. The total amount of Bitcoin in circulation is capped at 21 million coins by design, and new Bitcoin enters the market at a decreasing rate. That built-in scarcity works in a similar way to the value of gold, establishing Bitcoin as a store of value and driving the innovation behind all those other digital currencies that followed. These days, cryptocurrency is a recognized asset class with trillions in total value. If you are ready to start investing, doing some research on our best cryptocurrency platforms review is a great place to start. How Blockchain Technology Works Blockchain technology is the underlying technology that makes cryptocurrency possible. A blockchain is a distributed ledger, a record of transactions stored simultaneously across thousands of computers worldwide with no central server holding the data. Each transaction gets grouped into a block. Once verified, that block gets linked to the one before it. Blockchain transactions are extremely difficult to alter because changing any one entry requires changing every block after that across every node, at the same time, which is practically impossible. You don’t need to become a master in blockchain technology to invest in cryptocurrency. The basics are enough for you to understand what you are buying into. How Does Blockchain Work? When you send cryptocurrency, the blockchain technology starts to work right away. The transaction is broadcast to all the nodes on the network, each one of which verifies your ownership of the assets. Once enough nodes have confirmed it, the transaction gets sealed into a new block and is locked in permanently. Blockchain is a much faster and more efficient way of doing things than traditional banking methods. A bank transfer can take days to go through multiple clearing houses, but a crypto transfer settles peer-to-peer in minutes. Blockchain technology also enables decentralized finance (DeFi), which allows financial services like lending and trading to operate without traditional banks using smart contracts. However, most beginners focus on Bitcoin and Ethereum first. Main Types of Crypto Not all cryptocurrency is the same. Here are the four categories that most beginners will come across: Bitcoin (BTC): The original and the biggest by market cap. Primarily thought of as a store of value. New crypto coins tend to follow Bitcoin’s price direction when things get volatile. Altcoins: Cryptocurrencies other than Bitcoin that offer different features like smart contracts or faster transactions. Stablecoins: Cryptocurrency pegged to the US dollar or another stable asset. Used to hold a market position without taking on too much price risk. Exchange Tokens: Coins created by crypto exchanges that give users benefits like lower trading fees and rewards. How Crypto Wallets Work A crypto wallet doesn’t actually hold your cryptocurrency, it holds the private keys that prove you own it and allow you to transfer it. According to the SEC, the actual coins stay on the blockchain, the wallet is just the access point.1 Lose access to your own wallet’s private keys, and there is no recovery. There are basically three custody options to keep your coins safe: custodial wallets managed by a crypto exchange, self-custody hot wallets you control through software, or cold storage hardware wallets that stay offline. Most beginners start with custodial, which is like having a bank account, the security is handled by the platform. How to Buy Crypto To buy crypto, open an account on a platform like Coinbase or Gemini, complete identity verification, and link a bank account or debit card as your payment method. Search for the cryptocurrency you want, put in the amount you want to invest, and confirm. It’s basically that simple. A few things to keep in mind before you make your first trade: the fees on different platforms can vary wildly, and on top of that you need to watch out for other costs like ‘spread charges’ that can really add up if you’re buying in small amounts. Turn on two-factor authentication right away, security is way more important here than it usually is on other financial platforms. Cryptocurrency Trading vs. Crypto Trading Before putting money in, ask yourself: are you planning to actively trade crypto, or are you simply looking for long-term exposure? If you’re thinking of actively trading, that means keeping a close eye on market data every day, reading up on all the latest news, and making trades whenever you see an opportunity, and sometimes using specialized tools like futures contracts to get an edge. The problem is, that kind of trading requires a lot of time and a high tolerance for risk. For most people though, trading crypto just means buying a few coins, holding on, and reviewing every now and then. People who go in without a solid plan tend to do a lot worse than those who are just holding for the long term. If you do want to trade actively though, you will need to be ready to compete with professionals who have real-time market data and are working round the clock. How To Invest in Crypto: Your Crypto Investing Options There are basically three main ways to get into crypto, and which one is best for you will depend on your investment strategy and how much risk you are willing to take on. Buying directly through a crypto exchange is the most straightforward way to start. Set aside an initial amount, even $20 or $50 is enough to get going on most platforms, and buy some fractional coins. Long-term investors who own the coins directly have a lot more control over their investments, and they can also trade at will if the value goes up or down. The catch is that these investments do require some active management to keep them secure. The two options below are for people who want to get some exposure to

How to Open a Taxable Brokerage Account

Financial data on a tablet next to a pen and laptop, representing the steps to open a taxable brokerage account

What Is a Taxable Brokerage Account? A taxable brokerage account is an investment account where you can buy stocks, ETFs, mutual funds, individual stocks, bonds, and other securities. There are no annual caps, and no restrictions on when money can be withdrawn. The “taxable” part of the name describes how your gains in that account are treated. A Roth IRA is funded with after tax dollars, and gains grow tax-free. Traditional 401(k) contributions grow tax-deferred on pre-tax dollars. In a taxable account, capital gains taxes apply in the year a gain is realized, and dividends are taxed in the year they’re paid. That’s a key difference from other investment accounts where taxes are deferred or avoided entirely. Taxable brokerage accounts give you complete flexibility: you can contribute any amount, any time, with no restriction on withdrawals and no retirement savings requirement attached. For those who have maxed out tax-advantaged accounts and want to keep adding to their own investments, a taxable account is the natural next move. Before anyone decides to open a brokerage account, it’s worth knowing that SIPC protection covers brokerage account assets up to $500,000, including a $250,000 limit for cash, if the brokerage firm fails.1 It works similarly to FDIC insurance for a high yield savings account, just structured for investment accounts. Types of Investment Accounts: How Taxable Brokerage Accounts Work When you open a taxable brokerage account, one of the first decisions you’ll make is what kind of account you want. Most brokerage firms will offer you three different options. Cash Account A cash account is the simplest structure if you want to manage your own investments directly. All purchases must be paid for in full, with no borrowing money from the broker allowed. Many investors in cash accounts also hold low-risk, cash-equivalent investments like money market funds, which are commonly used for parking cash while earning interest. For most people opening their first brokerage account, a cash account is the right starting point. Margin Account A margin account is for investors who want to be able to borrow money from the broker to make purchases. This can increase your purchasing power, but losses can also be amplified in the same direction as gains. One thing to look out for is that some brokerage applications will default to a margin account when you open a new account.2 Make sure you know what you’re getting into before you make that final commitment. If options trading is part of your plan, you will also need to review and acknowledge the options disclosure document. Managed Brokerage Account A managed brokerage account is for investors who want to put their portfolio in the hands of a professional or robo-advisor. This means you’ll be guided by the investor’s goals and risk tolerance, and there will be an advisory fee on top of the standard costs of the funds you’re buying. It’s a good option for anyone who wants a hands-off approach to owning mutual funds, ETFs and individual stocks. How to Open a Brokerage Account Step by Step Taxable brokerage accounts can be opened at most major brokerage firms in about 10 to 15 minutes. Here’s what to expect at each stage. Setting Up Your New Account To open a brokerage account, you’ll need to provide the same basic information as you would to open a bank account: name, address, Social Security number, date of birth, and employment status. You’ll also want to be prepared to answer some questions about your investment goals and risk tolerance. Most brokerage firms link to your bank account, savings account or checking account to make it easy to transfer funds. Many platforms have a $0 minimum investment requirement to get started, and your account will usually be ready to use within minutes of funding. Before you finalize the new account, double-check to see if it defaults to a cash or margin structure – some applications will default to margin, which is worth checking before you click through to the final setup steps. What to Look for in a Brokerage Firm For people ready to get started investing and open a brokerage account, the key things to be thinking about are commission free trading, being able to start out with $0 in your account, and having a range of investment options including ETFs, mutual funds and individual stocks. The quality of the mobile app, how easy it is to get help from customer service, and setting up automatic investment contributions all play a part in the comparison. For a side-by-side of the best brokerage accounts available at the moment, InvestLane has put together a detailed rundown to look over before making a decision. Capital Gains Taxes in a Taxable Brokerage Account When you sell investments at a profit in a taxable brokerage account, it triggers a taxable event. You will pay capital gains taxes in the year you actually get the gains, and understanding how capital gains tax rates work can make a real difference in how much you get to keep. Short-Term Capital Gains Short term capital gains apply to investment earnings from assets you hold for one year or less. These gains are taxed as ordinary income at the investor’s standard federal tax rates, which can run as high as 37% for top earners.3 The tax treatment here applies the same way to wages and salary. Investors pay taxes on short-term gains at their top marginal rate, with no special treatment for investment income held less than a year. The Benefit of Long Term Capital Gains Hold onto an investment for longer than a year, and the rules change. You qualify for lower tax rates: 0%, 15%, or 20%, depending on how much taxable income you have. For 2025, if you’re single and your taxable income is $48,350 or less, you pay 0% on long term gains. Most middle income investors fall into the 15% bracket. And just think about how much of a difference that can make. Take a $10,000 gain that

What Is a Taxable Brokerage Account?

Man analyzing financial data while holding cash, illustrating what a taxable brokerage account is and how it works

What Is a Taxable Brokerage Account? Most people start out with some type of retirement account. Maybe a 401(k) through work, or a Roth IRA of their own. Those accounts have some great tax benefits, but they come with rules such as contribution limits, income restrictions, and age requirements for withdrawals. A taxable brokerage account doesn’t have any of those constraints. A taxable brokerage account is just a standard investment account held at a brokerage firm. You can buy and sell stocks, ETFs, bonds, REITs and other securities with no cap on how much you put in, no income phase-out, and no penalty for withdrawing money any time you like. The tradeoff is that the tax treatment is a bit different that that of tax-advantaged accounts. Capital gains, dividends and interest income in a taxable brokerage account get reported to the IRS in the year they’re earned. That’s different from a 401(k), where you get to defer taxes until withdrawal, and from a Roth IRA, where qualified withdrawals are tax-free. Having a good understanding of the tax implications for each account type is key to using a taxable brokerage account effectively. Keep in mind that this is an investment account, not a savings account. The money you put in is still subject to market risk, alongside the potential for long-term growth. Since it’s a taxable account, choosing tax-efficient investments can also help reduce unnecessary tax drag, as discussed in our article 5 Tax-Inefficient Investments to Avoid in Taxable Accounts. » Start investing today: Explore top brokerage accounts with our detailed review Investing Beyond Retirement Accounts There’s a common assumption out there: that once you’ve maxed out your 401(k) and Roth IRA, your investing job is done. That assumption can keep you from some real opportunities to grow your money. Retirement accounts are designed to be capped, by law. A taxable brokerage account has no such ceiling. It’s great for excess retirement savings after you’ve hit those limits, and it’s perfect for goals that fall outside traditional retirement age, like building up a down payment, buying an investment property, or even trying to reach financial independence before 65. Contribution Limits and Income Limits: What a Taxable Brokerage Skips The 401(k) employee contribution limit for 2026 is $24,500, and that’s before any employer match. The Individual Retirement Account (IRA) limit is $7,500 total across all IRA accounts, since IRAs are funded entirely with your own money and not tied to an employer plan.1 A taxable brokerage account, on the other hand, has none of those restrictions. No annual cap. No income limits. No April 15th deadline. For investors who’ve hit their retirement account contribution limits, a taxable brokerage account is where the rest of their capital can go. Stocks, Mutual Funds, and ETFs: What You Can Hold Here Taxable brokerage accounts open up a wide range of investment options for you. Stocks, ETFs, bonds, REITs, and mutual funds are all available, along with most investment options found inside a specific retirement account. One distinction that is important: ETFs tend to be more tax-efficient than mutual funds in a taxable account. Mutual funds can push capital gains distributions to shareholders even when nothing was sold, creating a taxable event the investor didn’t trigger. For anyone trying to manage annual taxes carefully in taxable accounts, tax efficient investments like ETFs are worth prioritizing over mutual fund alternatives. How a Brokerage Account Is Taxed A brokerage account taxed at the standard rates on realized gains works differently from tax deferred accounts where gains accumulate without annual reporting. There are three events that create a tax obligation: selling at a gain, receiving dividends, and earning interest income. The timing of when you sell will determine what you pay taxes on in a given year. Capital Gains Tax Rates: Short-Term vs. Long-Term The capital gains tax rates that you end up paying depend on how long you held the investment. Short term capital gains, on securities held 12 months or under, are taxed as ordinary income, with top rates reaching 37%. Long term capital gains, from investments held more than 12 months, are much lower. Rates start at 0%, then go to 15%, or 20% based on taxable income.2 For 2026, the 0% long term capital gains rate applies up to $48,350 in taxable income for single people and $96,700 if you are married filing jointly. Many middle-income investors fall in that range and pay taxes on short term gains but nothing on long term capital gains. The practical value here is real. Hold a position for 13 months instead of 11 and a $5,000 capital gain moves from being taxed as ordinary income to the long term capital gains rate, and that shows up in real dollars on your tax return. Tax Loss Harvesting to Cut Your Tax Bill Tax loss harvesting is one of the more useful tools available to investors. When an investment has fallen in value to below what you paid for it, selling it locks in a loss that you can use to offset capital gains taxes first. If there’s still a loss after offsetting gains, the remainder can reduce your ordinary income by up to $3,000 per year. Anything left over then carries forward to future years.3 This tax strategy is only available in taxable brokerage accounts though. Gains and losses inside a 401(k) or IRA aren’t tracked annually for tax purposes, so there’s nothing to harvest inside those accounts. Important thing to remember: the wash-sale rule. Selling at a loss and buying back the same or substantially identical security within 30 days before or after the sale cancels the deduction. To keep the benefit, just wait out the 30-day window or replace the position with a similar but distinct holding. Tax Deferred Accounts vs. Taxable Accounts Traditional retirement accounts work on a tax deferred model: you get a tax deduction when you make a contribution, which lowers your income for the year. The money then compounds tax free until

Spot Bitcoin and Ethereum ETF Buyer’s Guide for 2026

Various cryptocurrency coins including Bitcoin and Ethereum on display, representing a buyer's guide to spot Bitcoin and Ethereum ETFs

What Is a Bitcoin ETF? (and How Spot ETFs Work) A spot Bitcoin fund holds actual bitcoin and issues shares you can buy and sell on a normal stock exchange. Spot Ethereum funds work the same way with ether. So you skip the wallets, exchanges, and private keys, and you get to invest in cryptocurrency  through a brokerage account you probably already have. This fits the same core principles of ETF investing you already use for index funds. The fund handles custody, security, and the operational work of holding crypto. You hold shares, and the shares track the price of the underlying asset. Investment Objective: Tracking the Underlying Asset Every spot crypto fund in this guide shares the same goal. The fund objective is to reflect the performance of the underlying asset’s price, before fees and expenses. The investment objective for the iShares Bitcoin Trust ETF specifically states the fund “seeks to reflect generally the performance of the price of bitcoin.” Ether-focused funds have parallel investment objective language for ether. When bitcoin moves 5% on a given day, you’d expect the share price to move close to 5% as well, with small variations from fees. » Thinking to buy cryptocurrency? See the top crypto platforms today How Spot Crypto ETFs Hold Digital Assets and Are Regulated Spot Bitcoin and Ethereum ETFs hold digital assets directly, and the regulatory wrapper differs from what most ETF investors are used to. The U.S. Securities and Exchange Commission approved these funds on January 10, 2024, with strict disclosure requirements. The SEC was clear that approval was not an endorsement of bitcoin as an investment.1 Here’s the part you need to pay close attention to: These funds are not registered as investment companies under the Investment Company Act of 1940, and do not have the same regulatory requirements as mutual funds or ETFs registered under that act.2 The protections that come with being an investment company registered under that act do not all apply to spot crypto funds. The funds are structured as grantor trusts or similar pass-through vehicles, and each one trades as an exchange traded product on a major U.S. exchange. They are not commodity pools regulated under the Commodity Exchange Act either. A commodity pool would carry CFTC oversight that these spot funds do not. The fund’s prospectus spells out the structure and risks in detail. So the same regulatory requirements that apply to a typical equity ETF do not all apply to spot crypto funds. The SEC reviewed the disclosures, the listing exchange approved the listings, and the funds operate under their own investment programs. Some protections built into the rules for registered funds are simply not there. Best Spot Bitcoin ETFs for 2026 Four spot Bitcoin funds cover the bulk of investor money in this category. Here’s how they stack up against each other, sized against the largest ETFs in the market for context. iShares Bitcoin Trust ETF (IBIT) IBIT is the dominant fund in the category. As of May 2026, IBIT holds approximately $66.7 billion in net assets, more than five times the next-largest fund in the category, with a 0.25% sponsor fee.3 For every $10,000 invested, that 0.25% works out to $25 per year in fund expenses, taken from the trust’s bitcoin holdings. What stands out about IBIT is how sticky the money is. Even when bitcoin’s market price fell sharply during the first quarter of 2026, IBIT’s net assets held roughly flat while shares outstanding actually grew. Other ishares funds show similar institutional patterns, but IBIT’s market value at scale puts it in a league of its own. How Net Assets Compare Across the Funds Across the four Bitcoin funds, IBIT’s $66.7 billion lead is wide. FBTC sits second at $12.74 billion, followed by BITB at $3.15 billion. Net assets affect liquidity and the ability to handle large trades without slippage. Fidelity Wise Origin Bitcoin Fund (FBTC) FBTC is the second-largest fund in this lineup and Fidelity’s entry. As of Q1 2026, the fund holds about $12.74 billion in net assets across roughly 190,800 BTC. FBTC charges a 0.25% sponsor fee, and it is the only major spot Bitcoin product that custodies its bitcoin in-house, through Fidelity Digital Asset Services rather than Coinbase Custody.4 For Fidelity customers, FBTC slots cleanly into existing accounts. The in-house custody puts Fidelity in direct control of the bitcoin rather than leaving it with a third-party crypto custodian. Grayscale Bitcoin Mini Trust ETF (BTC) BTC is Grayscale’s value entry in the category. The fund charges a 0.15% management fee, the lowest among the major spot Bitcoin funds covered here, and trades as an exchange traded product.5 The math is simple, here is how it works: For every $10,000 invested, BTC’s 0.15% works out to $15 per year, against $25 for IBIT and FBTC. Over a long holding period, that 10 basis point gap compounds in your favor. The trade-off is size though, BTC is smaller and newer than IBIT, so trading volume and liquidity are lower. For cost-sensitive buyers planning to hold for years, the lower management fees can easily outweigh that disadvantage. Bitwise Bitcoin ETF (BITB) BITB is the specialist crypto firm entry, with a competitive 0.20% fee that sits between the major issuers and Grayscale’s BTC. Bitwise is a crypto-native asset manager, appealing to investors who want a fund run by a team focused entirely on digital assets. As of May 2026, BITB holds about $3.15 billion in net assets and 38,576 BTC, with Coinbase Custody Trust Company as the bitcoin custodian. The 30-day median bid-ask spread runs around 0.02%, in line with the larger funds. Best Spot Ethereum Trust ETF Picks Three spot ether trust ETF options cover most of the Ethereum side. Two have “Trust” in their formal names, while Grayscale’s mini ether fund uses “Staking Mini ETF” instead. iShares Ethereum Trust ETF (ETHA) ETHA is BlackRock’s Ethereum entry and the largest spot ether trust ETF. As of May 2026, the fund holds about $7.5 billion in net assets

The 3 Tax Buckets Every Investor Needs To Know

Tax form with a note and reading glasses, representing the three tax buckets investors use for tax diversification

Why Tax Buckets Matter for Long-Term Wealth Most people focus on what they invest in and skip past where those dollars actually live. That gap costs investors real money over time. Two people can buy the same index fund, earn the same investment return, and walk away with very different totals depending on the account type. The three buckets each handle taxes differently. A taxable account hits you every year on dividends, interest, and realized capital gains. A tax deferred account skips taxes now and bills you later. A tax free account collects taxes upfront and stops asking after that. Pick the wrong bucket for a long term goal, and the tax drag compounds for decades. So before investing your money in the market, it helps to understand how each bucket treats your dollars and how it shapes your investment decision over a personal investment horizon that may span 30 or 40 years. Taxable vs Tax-Deferred vs Tax-Free Accounts The taxable vs tax deferred vs tax free framework comes down to one question: when do you pay the tax bill? A normal taxable investment pays the tax now, every year. The taxable tax deferred comparison is simple: you skip the tax bill now and pay income taxes on the back end at withdrawal. The taxable vs tax deferred timing flips again with the Roth. Tax free accounts collect tax upfront. You contribute after tax dollars, then everything that grows inside the account avoids future tax on qualified withdrawals. The investments grow tax free, the earnings grow tax free, and qualified retirement income exits without a tax bite. Each bucket fits different goals. Taxable accounts work for short-term cash and for investing money beyond retirement account limits. Tax deferred accounts shine later in your career when your current income tax bracket is high and your retirement bracket should be lower. Tax free accounts win when you have decades of compounding ahead. » Start investing today: Explore top brokerage accounts with our detailed review How Taxable Accounts Work Taxable accounts include brokerage accounts, high yield savings accounts, money market accounts, CDs, and most bond holdings. There are no contribution limits, no withdrawal restrictions, and no age gate. The price for that flexibility is an annual tax bill on dividends, interest, and any realized gains. Brokerage Accounts and Investment Taxes A brokerage account is where most investors first run into investment taxes. Long term capital gains, on assets held more than one year, are taxed at federal income tax rates of 0%, 15%, or 20% depending on your taxable income, while short term gains hit your ordinary income tax rate.1 Those federal income tax rates make holding period a meaningful tax decision that affects taxable income, and the choice of where to hold a taxable investment can change your annual income taxes by hundreds or thousands of dollars. Capital gains taxes also apply to dividends, and the type is important. Qualified dividends get the favorable long term capital gains rates, while ordinary dividends do not, and ordinary income taxes apply at your federal tax rate. Tax efficient investments like broad index funds and municipal bonds throw off less taxable income each year, which is why investment companies often place them in taxable accounts and steer income heavy holdings into tax advantaged investments. For a more detailed look at this strategy, see our list of investments to avoid in taxable accounts. High-Yield Savings Accounts and Money Market Accounts A high yield savings account and similar parking spots sit in the same bucket but serve a different purpose. They carry significantly lower risk than equity investment funds and are built for short term cash, not long term growth, which makes the personal investment horizon for these dollars short by design. Interest is taxed as ordinary income and reflect sales charges or fees do not apply. A top high yield account currently pays around 4% APY, while a traditional financial institution pay rate sits closer to 0.01%. On a $10,000 emergency fund, that difference works out to roughly $400 a year versus $1. » Earn more on your savings: Explore top high-yield savings accounts today Tax-Deferred Accounts and How They Build Wealth Tax deferred accounts include the traditional IRA, the 401(k), the 403(b), 457(b), SEP IRA, and SIMPLE IRA. The mechanic is the same across the family: you contribute pre tax dollars now, the money grows without annual taxes, and the account pays income taxes later. A tax deferred investment behaves differently from a normal taxable investment in one key way: time on your side without the annual tax drag, and that single change in tax deferred investment treatment is the engine. Withdrawals after age 59½ are taxed as ordinary income at the federal income tax rates in effect that year, which currently run from 10% to 37%.2 Whether the account beats a Roth comes down to your projected timeline and estimated marginal tax rate today versus when you’ll be in retirement. A side by side breakdown lives in our Roth IRA vs Traditional IRA comparison. How Tax Deduction Savings Compound The upfront tax deduction is the immediate tax benefit that makes tax deferred contributions attractive. Every dollar you contribute reduces your taxable income for the year, and that tax deduction stacks year after year. If your federal tax rate is 22%, contributing $7,500 returns $1,650 in tax deduction savings. Reinvest that saved cash, and your net contribution effectively matches your gross contribution, compounding alongside the original investment. The tax-deductible contribution lowers your current tax liability by reducing the income you pay taxes on today, in exchange for a tax bill later. This trade tends to favor investors whose retirement tax bracket is lower than their working-years bracket. Why You Should Increase Tax-Deferred Contribution Late in Your Career Late career earners typically sit in their highest income tax bracket of any working stage. Maxing or pushing to increase tax deferred contribution amounts during these years captures the largest possible deduction and shifts taxes to retirement, when

Backdoor Roth IRA Guide (2026 Update): How It Works

Retirement savings jar full of US dollar bills, representing a backdoor Roth IRA strategy for high earners

What Is a Backdoor Roth IRA? A backdoor Roth IRA is not a separate retirement account. It is a Roth IRA conversion strategy combining two very different legal moves: a nondeductible contribution into a traditional IRA account, followed by a Roth conversion into a Roth IRA. The strategy exists because Roth IRA contributions are limited by income, but there’s no cap on non-deductible contributions to traditional IRAs or on converting those to Roth’s. Take someone earning $300,000 a year. They can’t contribute directly to a Roth IRA because their income exceeds the limit. But they can legally fund a traditional IRA and move that money into a Roth IRA. Why the Backdoor Roth IRA Strategy Exists In 2010, the IRS removed a rule that had been restricting Roth conversions. This opened up what’s come to be known as the backdoor Roth IRA strategy. High earners were still locked out of direct Roth contributions, but the combination of a non-deductible traditional IRA and a Roth conversion suddenly became an option. Before you consider using this strategy, you should check the current Roth IRA income limits  to see if you need to go the backdoor route. » Ready to invest for retirement? Check out our review on the top IRA accounts Who Qualifies for a Backdoor Roth IRA? The backdoor Roth is perfect for people whose MAGI exceeds the Roth phase-out range. If you’re single and your 2026 adjusted gross income (AGI) is above $168,000, you won’t be able to contribute directly to a Roth IRA. If you’re married filing jointly and your AGI is above $252,000, you’re facing the same issue.1 Then there’s the eligibility test. You need to have earned income at least equal to the Roth IRA contribution amount, the ability to open a traditional IRA, and no existing pre tax SEP or SIMPLE IRAs balances that would complicate the strategy. Income Limits That Make the Backdoor Strategy Necessary For 2026, the Roth IRA income limits work like this: single filers phase out between $153,000 and $168,000, married filing jointly phases out between $242,000 and $252,000. And if you’re a married filing separately taxpayer who lived with your spouse, you’re looking at a phase-out range of $0 to $10,000.2  Once you clear these thresholds, direct Roth IRA contributions are no longer an option, and the backdoor becomes your next move. » Stay ahead of your finances: Join our free newsletters today How the Backdoor Roth IRA Process Works The backdoor Roth IRA process has two steps: a nondeductible IRA contribution through a traditional IRA, followed by a Roth conversion of that balance. Both steps have to be done right, and reported correctly on your tax return. The IRS has not published a mandatory waiting period, and most practitioners handle the conversion within days of the initial Roth IRA contribution to keep tax exposure to a minimum. What Happens in the Traditional IRA Contribution Step? The first step is to make a non-deductible contribution into a traditional IRA using money that’s already been taxed. For 2026, the IRA contribution limit is $7,500 for those under 50, or $8,600 with catch-up for those 50 and older. What you’re doing here is making a contribution using dollars that you’ve chosen to contribute to after tax. You’re not taking any tax deduction. You’ll need to open a traditional IRA at a brokerage before you can fund it, and this is a non-deductible contribution, not one of the deductible contributions you can make at lower income levels. You’ll also need to file Form 8606 to set up the basis on your tax return. Filing Form 8606 for the year of the non-deductible contribution is not optional. That’s how the IRS knows the money’s been taxed and shouldn’t be taxed again when converted.3 What Happens During the Roth Conversion Step? The second step is to shift funds from traditional IRA to a Roth IRA. Backdoor Roth conversions can be done through a trustee to trustee transfer or a 60-day rollover.4 The majority of people use the direct transfer method as it’s simpler to do. If a traditional IRA just holds a nondeductible amount then the conversion produces very little ordinary income and the converted funds then grow tax free. What Is the Pro Rata Rule and Why Is It So Important? The pro rata rule is the single biggest reason a backdoor Roth IRA can go completely sideways. Under this IRS rule, any Roth conversion is treated as coming proportionally from all traditional, SEP, and SIMPLE IRA balances, not from a specific contribution.5 It prevents cherry-picking from nondeductible basis while leaving large pre tax balances untouched. The math works like this. Someone with $93,000 of pre tax IRA balances plus a fresh $7,500 nondeductible contribution holds $100,500 in total IRA assets. If they convert the $7,500, roughly 92.5 percent becomes taxable income because 92.5 percent of the balance is pre tax. Only about $560 is treated as tax free return of basis. The other $6,940 gets taxed as ordinary income at the marginal tax rate, creating unexpected tax liability. How IRA Balances Affect the Pro Rata Calculation The pro rata rule bundles together all balances on December 31 of the conversion year. Traditional, SEP IRA, SIMPLE IRAs, and rollover balances all count toward the total, but Roth IRA and 401(k) balances do not.6 A person with no existing pre tax IRA balance has the cleanest setup, while deductible and nondeductible contributions get blended proportionally across every conversion until any pre tax balance is cleared. The 401(k) Workaround for Pro Rata Problems Rolling pre tax IRA balances into a current 401(k) or other workplace retirement plan removes those dollars from the aggregation. Once inside a 401(k), they no longer count toward the pro rata denominator, which is why people with large pre tax balances often roll them into a 401(k) before starting a backdoor Roth. Not every 401(k) plan accepts incoming rollovers. Plan rules vary, and the rollover must be completed before December 31 of the conversion

Lump Sum vs Dollar Cost Averaging | Which is Best?

Balance scale weighing money and goods, representing the choice between lump sum investing and dollar-cost averaging

What Is the Difference Between Lump Sum and Dollar Cost Averaging? Lump sum investing and dollar cost averaging are two different ways to put cash into the financial markets. Both have fans, and both are backed by research. With a lump sum investment, you simply take the entire amount you are going to invest and put it into the market all at once. You get full exposure on day one. With dollar cost averaging on the other hand, you break up that same amount into smaller pieces and invest it over weeks or months. The idea here is to smooth out the effect of fluctuating price levels and reduce timing risk. For example, let’s say you have $12,000 sitting in cash. A lump sum approach means investing all $12,000 today. A dollar cost averaging (DCA) approach might split it into a fixed amount of $1,000 a month for a year. Is Dollar Cost Averaging the Same as Investing From Every Paycheck? Not exactly. When you invest every time you get paid, available cash goes to work immediately. That is actually a series of small lump sum investments, not a true cost averaging strategy. The real comparison here only applies when you have a large sum of money sitting in cash and you are looking for ways to deploy it. » Start investing today: Explore top brokerage accounts with our detailed review What Are the Pros and Cons of Each Investment Strategy? Each investment strategy carries its own tradeoffs. Understanding them helps match the approach to your investment objectives and financial goals. Lump sum investing gives instant market exposure. No cash sits on the sideline. The downside is timing risk. If the market drops right after you invest, you feel the full hit. Dollar cost averaging reduces that short term volatility. By buying at different price levels, your average purchase price smooths out. There is a tradeoff though: you end up giving up potential gains while only a portion of your cash is working. Factor Lump Sum Investing Dollar Cost Averaging Market exposure Immediate Gradual Entry timing exposure Higher Lower Expected returns Higher on average Lower on average Stress during volatile markets Higher Lower Best for Long time horizon, higher risk tolerance Risk averse investors, bear market concerns For investors who lose sleep over market swings, DCA can act as a behavioral anchor. For those focused on maximum long term growth, lump sum investing tends to win. Why Does Time in the Market Beat Market Timing? This is at the heart of the whole debate. Markets tend to rise over time and cash sitting idle earns next to nothing while share prices climb. J.P. Morgan’s 2025 Guide to Retirement put real numbers on this. Missing the 10 best days of the market over the past 20 years would have cut a portfolio’s annualized return by almost 50%. Missing the top 40 days would have produced a negative annualized return.1 The trouble is that many of the best market days happen during rough patches. Pulling out during a downturn, even for a few weeks, can wreck long term results through extended periods of missed gains. See our breakdown of why trying to time the market could cost you thousands. What Happens When You Wait for the Right Market Entry Points? Charles Schwab ran a 20-year study ending in 2024 tracking five investors who each received $2,000 at the start of every year. Peter Perfect invested at the annual low. Ashley Action invested immediately. Matthew Monthly used dollar cost averaging. Rosie Rotten had the worst timing possible. Larry Linger held cash and kept waiting out the market volatility. The results were striking. Peter Perfect finished with $186,077. Ashley Action, who never tried to time anything, landed at $170,555. Larry Linger, who kept waiting for better market conditions, ended with just $47,357.2 Let that sink in for a minute. The investor with bad timing still crushed the one who held cash. Waiting indefinitely is the worst thing you can do in nearly every market cycle. What Does Historical Performance Say About Lump Sum vs Dollar Cost Averaging? Research from major firms lines up. Vanguard compared lump sum investing to dollar cost averaging across rolling periods from 1976 to 2022. As it turned out, the lump sum investment approach beat dollar cost averaging most of the time, with the gap getting bigger as the DCA periods stretched.3 The pattern held across asset allocations too. The bigger the equity stake in the portfolio, the bigger lump sum’s edge over DCA. The reason is the same one that drives the whole argument: stocks and bonds carry a risk premium over cash, and a lump sum approach holds less cash across the life of the investment, so it captures more of that premium. » Stay ahead of your finances: Join our free newsletters today When Does Dollar Cost Averaging Actually Win? Dollar cost averaging has a clear edge in one particular case: a sustained bear market. When the market fluctuates downward month after month, buying at lower prices pulls your average purchase price down. Consider a quick example. You invest $600 into a particular investment at $25 per share all at once. Your cost basis is $25. Now let’s say instead you bought $100 a month for six months while bond prices and stock prices fell. Your average share price might end up closer to $22.90. If the price now sits at $21.38, so that lump sum investor is down 14.48% while the DCA investor is only down 6.64%. Keep in mind though, historically, markets drop in fewer than 25% of 12-month periods. That leaves roughly 1-in-4 years where DCA could help, which is why it is not necessarily a bad strategy. The downside though: it tends to underperform during a rising market. Over the long term, markets have consistently trended upward, despite periods of short-term volatility and economic uncertainty. In declining markets, dollar cost averaging can feel safer than lump sum investing, as it spreads out entry

401(k) vs Roth IRA: Where Should You Invest First?

Piggy bank and coins, representing the choice between saving in a 401(k) or a Roth IRA first

401(k) vs Roth IRA: Key Differences at a Glance Feature Traditional 401(k) Roth 401(k) Roth IRA Sponsored by Employer Employer Individual Annual contribution limits (under 50) $24,500 (combined with Roth 401k) $24,500 (combined with Traditional) $7,500 Catch-up contributions (age 50+) $8,000 $8,000 $1,100 Tax treatment Pre-tax in, taxable out After-tax in, tax-free out After-tax in, tax-free out Employer match / contributions Yes Yes No Income limits None None Phase-out: $153k–$168k (single) $242k–$252k (married) Required minimum distributions Yes — age 73 No (post-2024) No. Never for owner Investment options Employer plan menu Employer plan menu Broad. Stocks, ETFs, bonds, index funds Source: Internal Revenue Service, 2026 contribution limits. Annual Contribution Limits for IRAs and 401(k) Plans Starting in 2026, the higher contribution limits give retirement savers more room.1 The annual contribution limits for a 401(k), whether traditional or Roth 401(k), are $24,500 under age 50, with catch up contributions of $8,000 for those 50 and older. Those aged 60 to 63 get a special catch up of $11,250, the highest catch up contributions available across any retirement accounts.2  For a Roth IRA, the limit is $7,500 under age 50 and $8,600 for those 50 and older, with catch up contributions for IRAs at $1,100 for 2026. These limits are completely separate from 401(k) limits, so combined contributions across both account types can reach $32,000 per year for those under 50, and significantly more with catch up contributions for those 50 and older.3 What Is a 401(k)? A 401(k) is an employer-sponsored retirement plan where your contributions come directly out of your paycheck. A traditional 401(k) uses pre-tax contributions that reduce your taxable income in the year they’re made. The money grows through tax-deferred growth until withdrawal, at which point the IRS taxes distributions as ordinary income. A Roth 401(k), on the other hand, uses after-tax contributions, no upfront deduction, but tax-free withdrawals in retirement.  The real kicker is the employer match, when an employer offers matching contributions, it’s one of the most valuable benefits you can get. Here’s what that looks like in practice: say you earn $60,000 and your employer matches 50% of your contributions up to 6% of your salary. If you contribute that 6%, or $3,600, your employer adds another $1,800 on top. That turns $3,600 into $5,400 working for you on day one, before the market moves a single point. When you walk away from that free money, it’s one of the costliest moves a retirement saver can make. To get the most out of your 401(k) match, you’ll need to confirm with HR exactly how matching contributions are calculated before setting your contribution rate. Everyone’s plan is a little different, so confirming the match formula with HR is the very first step. What Is a Roth IRA? Contributing After-Tax Dollars to Grow Tax-Free A Roth IRA is an individual retirement account opened independently at a financial institution, not tied to a company. Unlike a traditional 401(k) or even a Roth 401(k), it’s not tied to an employer. Contributions go in with after tax dollars, so you won’t get a current year deduction on those dollars. But qualified withdrawals of both contributions and investment earnings are completely tax free after age 59½, once the five-year rule is met. Unlike a Roth 401(k) which is subject to employer plan rules, a Roth IRA has no required minimum distributions, sitting entirely outside the RMD system. A Roth IRA lets money stay invested as long as the owner wants, independently, which makes it a powerful complement for traditional 401(k) owners. Roth IRA contributions have income limits based on modified adjusted gross income. For 2026, single filers with MAGI above $168,000 are no longer allowed to contribute directly to a Roth IRA, and the phase-out starts at $153,000. For married couples filing jointly, income limits run from $242,000 to $252,000. Anyone who finds themselves facing these income restrictions would be wise to speak with a tax professional or a financial advisor who’s familiar with Roth conversion strategies to protect their retirement savings. With a Roth IRA, the options for investing your money are fairly broad; stocks, ETFs, index funds, bonds. If you’re looking for ideas on the best ETFs for a Roth IRA you’ll find plenty of low cost options at just about any brokerage.4 » Ready to invest for retirement? Check out our review on the top IRA accounts When to Prioritize the Roth IRA Younger Investors: After-Tax Contributions and Lower Income Limits For workers in their 20s and 30s, the biggest advantage isn’t the current tax bracket, it’s the runway. With decades of tax-free compounding ahead of you, giving up decades of tax-free growth by locking dollars into a tax-deferred 401(k) instead of a Roth account is a steep price to pay for a modest upfront deduction. Consider what that runway looks like in real numbers: $7,500 per year in a Roth IRA at a 10% average annual return compounds to around $3.3 million over 40 years, and all of it is completely tax-free in retirement. At this stage of life, the question isn’t really whether to pay a lower rate now versus a higher one later. The bracket math gets more interesting for workers closer to peak earning years later in your career, which comes up later in this article. For younger investors, though, after capturing the full employer match, putting dollars into Roth accounts, whether a Roth 401(k) or a Roth IRA, deserves the next priority for most. Building Tax Diversification for Retirement Income Having both a traditional 401(k) and a Roth account, whether it’s a Roth 401(k), Roth IRA, or both, is useful because it creates some real flexibility when you retire. When you pull money out of a traditional 401(k), every withdrawal adds to your taxable income. With a Roth account, though, tax-free withdrawals don’t count. Pulling from both buckets lets you manage your taxable income each year, which affects things like Social Security taxes, Medicare surcharges, and other income thresholds. This kind of tax-advantaged

Which Is the Best S&P 500 ETF? (VOO vs SPY vs SPYM vs IVV)

American flag and office buildings in Manhattan, New York, representing investing in the S&P 500 through ETFs like VOO, SPY, SPYM and IVV

What Makes the S&P 500 the Core of So Many Portfolios? The S&P 500 is a stock market index that tracks roughly 500 of the largest publicly traded companies in the United States, covering about 80% of the total U.S. stock market by capitalization. Since 1957, the index has averaged just over 10% per year in total return, making it the benchmark that actively managed mutual funds and portfolio managers get measured against. Jack Bogle, the founder of Vanguard, helped create the first S&P 500 index fund for individual investors around a simple idea. His advice: “Don’t look for the needle in the haystack. Just buy the haystack.” Investing in low cost S&P 500 funds has since become the foundation of long-term portfolios across every account type, from tax-advantaged accounts to taxable accounts. Today, four exchange traded funds (ETFs) dominate S&P 500 investing: VOO, SPY, SPYM, and IVV. These ETFs all hold the same large cap stocks and track the same underlying index. For anyone looking to invest in the S&P 500, the differences come down to cost, liquidity, and structure. Once you are clear on these factors, deciding which fund to invest in becomes much simpler. » Start investing today: Explore top brokerage accounts with our detailed review What Factors Should You Focus on When Comparing S&P 500 ETFs? When it comes to comparing these ETFs, the key factors come down to basically three things: the expense ratio, the bid/ask spread, and how you plan on using the fund. The expense ratio is the annual fee these funds charge, and it’s deducted directly from your returns. For funds at 0.02% to 0.03%, the impact is minimal, and your returns will be very close to the S&P 500. But for funds at 0.0945%,  that starts to add up,  especially when you’re investing for the long term. And it’s even more of a difference when you compare that to other low-cost ETFs that track the exact same S&P 500. The bid/ask spread is the gap between what a buyer is willing to pay and what a seller will accept on the market. For long-term investors who buy and hold, the spread doesn’t really matter. But for active traders consistently buying and selling, a tight spread can save them a lot of money on every transaction. Understanding these factors will help you pick the right fund for your strategy. How Do VOO, SPY, SPYM, and IVV Compare? Here is a full side-by-side comparison using data as of March 31, 2026. Metric VOO SPY SPYM IVV Issuer Vanguard State Street (SSGA) State Street (SSGA) BlackRock / iShares Inception Date Sep 7, 2010 Jan 22, 1993 Nov 8, 2005 May 15, 2000 Expense Ratio 0.03% 0.0945% 0.02% 0.03% Assets Under Management (AUM) ~$885B ~$703B ~$133B ~$765B Avg Daily Share Volume (3mo) 10.5M shares 87.3M shares 16.7M shares 9.1M shares Bid/Ask Spread (30-day) 0.01% 0.00% 0.01% 0.00% Dividend Yield (TTM) 1.11% 1.05% 1.07% 1.15% 1-Year Return (as of 3/31/26) 17.67% 17.59% 17.73% 17.70% 5-Year Ann. Return (as of 3/31/26) 12.00% 11.90% 12.00% 12.00% 10-Year Ann. Return (as of 3/31/26) 14.11% 14.01% *Index changed 2020 14.12% Sources: Vanguard.com | ssga.com | ishares.com | InvestLane ETF Insights, updated April 17, 2026 Long-Term Performance of Top Index ETFs These index ETFs all track the same market benchmark so long-term performance figures are nearly identical. The small gaps in the 5 year and 10 year columns can be almost entirely attributed to the expense ratio. Every single basis point of annual cost adds up over the course of decades, compounding against anyone who holds for that long. SPY: The Original S&P 500 ETF Built for Traders SPY, the SPDR S&P 500 ETF trust from State Street, launched back in January 1993 as the first exchange traded fund to get listed in the United States.1 It averages 87.3 million shares per day with a 30-day bid/ask spread of essentially zero. That basically makes it the most widely traded equity ETF on the market Investors like SPY for a reason, it’s the go-to for active traders, institutions, and anyone who wants to use call options or derivatives on the S&P 500. When volatility spikes and spreads on other ETFs start getting wide, SPY’s spread stays put. That sort of consistent liquidity is important for people who regularly trade stocks and ETFs or need to move large positions quickly. How Does SPY’s Expense Ratio Affect Long-Term Returns? SPY charges 0.0945% per year, the highest expense ratio of the four funds. For active traders, that cost is justified by the liquidity advantage. However, for long-term investors in index funds who never touch their positions, it is dead weight compared to the other low cost options in this group. Let’s consider an example of just how big a difference the expense ratio can make in practice. Suppose you start with $1,000 and add $500 a month to an index fund over a long career – earning 10% a year. At SPY’s rate, you’d pay around $72,000 in total fees over 40 years. In contrast the same investor in SPYM at 0.02% would pay around $14,000. That’s $58,000 paid to a fund company just for owning the same 500 companies. Now compare both to an actively managed fund at 0.70%, and the fees total climbs to roughly $470,000 over the same period. The SPIVA scorecard shows that over 20-year periods, the majority of actively managed funds fail to outperform their benchmark index after fees.2 It’s no surprise then, that the whole passive investing idea has reshaped the fund industry. The math on fees is why index funds and low-cost ETFs keep taking market share from active mutual funds. » Stay ahead of your finances: Join our free newsletters today SPYM: The Lowest-Cost S&P 500 ETF SPYM, The SPDR portfolio S&P 500 ETF from State Street, is the low-cost alternative to SPY. They track the same S&P 500 index.3 The thing that sets them apart is who they are built for. The structure here is similar to

Best ETFs to Keep in Your IRA in Retirement

Coins stacked beside a small growing plant, representing the best ETFs to hold in an IRA to grow and protect retirement savings

Why These Eight ETFs Belong in a Retirement IRA Most people spend decades putting money aside for retirement. What doesn’t get enough attention is what to do with those funds once you’re actually retired. The goal shifts from accumulating more savings to generating enough steady income to live on, protecting the value of your money and not running out of funds. That requires a different investment strategy. Growth-focused funds that aim for maximum upside can carry too much risk when you are drawing down your assets in retirement. And parking everything in bonds exposes you to the slow erosion of purchasing power over a long retirement. Inflation doesn’t magically stop once you retire. These eight funds cover every major asset class: stocks and bonds, dividend paying stocks, international stocks and even alternative assets like gold. Held inside a traditional or Roth IRA, dividends compound without the capital gains taxes eating into your returns each year. If you want a better idea of what creates tax drag in taxable accounts, our article on 5 Tax-Inefficient Investments to Avoid in Taxable Accounts might be worth a read. » Ready to invest for retirement? Check out our review on the top IRA accounts What Do the Best ETFs Need to Do in Retirement? Low Costs and Asset Allocation Matter More Than Most People Realize Low cost ETFs matter way more in retirement than during the accumulation phase. With no new contributions coming in, lower expense ratios can really add up. On a $500,000 portfolio held for 20 years, the difference between 0.03% and 0.75% can be tens of thousands of dollars in lost compounding. Low costs and low expenses are the bedrock, not a nice to have. Beyond fees, the best retirement ETFs provide built-in diversification across multiple asset classes. Individual securities carry concentration risk that’s just not there with a broadly diversified exchange traded fund. A single stock can get wiped out, and that can’t happen to a fund holding hundreds or thousands of holdings. The third thing to think about is the right asset allocation. Equity ETFs drive long term growth. Bond ETFs provide stability and steady income. Target date funds were popular because they are designed to rebalance automatically, but most of them come with higher expense ratios and less flexibility than building your own low cost index funds portfolio. A handful of well-chosen ETFs will outperform them on cost and control. Equity ETFs for Long-Term Growth VOO: Vanguard S&P 500 ETF – Core U.S. Growth Engine Every retirement portfolio still needs some equity exposure. Without it, inflation quietly erodes the real value of your retirement savings over time. VOO is a solution that comes with almost no cost. VOO tracks the S&P 500, which is an index covering about 500 of the largest publicly traded U.S. based companies.1 At over $1.4 trillion in net assets, a 0.03% expense ratio, and a 10-year average annual return of 14.78%, it’s the most cost-efficient way to own the long-term track record of the U.S. stock market. For broad S&P 500 exposure, some of the most popular ETFs include VOO, SPY, SPYM, and IVV. Dividend ETFs for Retirement Income SCHD: Schwab U.S. Dividend Equity ETF – Quality Income Built on Dividend Paying Stocks Where VOO is built for appreciation, SCHD is built for income. The fund tracks the Dow Jones U.S. Dividend 100 Index, which screens for companies with growing dividends and strong financial fundamentals, focusing specifically on the quality and sustainability of dividends rather than simply the highest yield.2 As of April 10, 2026, SCHD has around $85.76 billion in net assets, a 0.060% expense ratio, and an average annual return of 12.92% since it started out. If you check the top holdings, you will see Lockheed Martin, Chevron, and Coca-Cola. These are in sectors like financials, consumer staples, and industrials, which are less likely to overlap with VOO’s tech heavy portfolio. The idea behind SCHD in retirement investing is pretty simple: invest for growth when you’re young and then switch to income when you’re time to live off your savings. Well, for a lot of us, that time is now. According to Portfolio Visualizer, SCHD has a 0.44 correlation with the S&P 500 – it’s in the same direction, but it’s not going to move in lockstep, which is helpful in keeping the portfolio stable. If you want to take a closer look at some other dividend ETFs that you might want to hold alongside SCHD, then 6 Best Dividend ETFs to Buy & Hold Forever covers several strong options. » Earn more on your savings: Explore top high-yield savings accounts today Bond ETFs for Stability BND: Vanguard Total Bond Market ETF – The Low Risk Stability Anchor Bond ETFs serve as a shock absorber for your retirement portfolio. When the equity market tanks, bonds usually hold their value, or even go up, giving you the chance to ride out the downturn without panicking and selling. BND gives you that stability at the absolute lowest cost.3 With $387 billion in assets and a 0.03% expense ratio, BND is the cheapest way to get the whole U.S. Investment-Grade Bond market. Over the long run, the returns average 2.00%, and that’s on purpose. BND isn’t in the portfolio to make you rich. Its job is to protect your wealth, to give you some income when your other investments are under pressure, and hold its value when the market goes off a cliff.  According to Portfolio Visualizer, BND has a 0.36 correlation with the S&P 500, and GLDM has a -0.29 correlation, meaning gold tends to move in the opposite direction to U.S. stocks. That combination helps give the portfolio more stability during market downturns. Covered Call ETFs for Monthly Income JEPI: JPMorgan Equity Premium Income ETF – High Monthly Income for Lower Volatility JEPI generates income every month by selling covered call options on the S&P 500. The premium on those options gets stacked on top of regular dividend payments from stocks.

Ray Dalio’s All Weather Portfolio: Is It Right For You?

Group of young professionals sharing opinions in a meeting, discussing whether Ray Dalio's All Weather Portfolio is the right investment strategy

What Is Ray Dalio’s All Weather Portfolio? Ray Dalio’s All Weather portfolio was created in 1996 to manage his own family trust assets. According to Bridgewater Associates, the strategy rests on a straightforward idea: asset classes react in predictable ways based on the relationship of their cash flows to the economic environment.1 By balancing assets based on those structural tendencies, the impact of economic surprises can be minimized. The framework behind Ray Dalio’s all weather portfolio breaks the economy into four conditions: rising growth, falling growth, rising inflation, and falling inflation. These are the four economic seasons that Ray Dalio built the strategy around. Each environment tends to favor certain assets and punish others. Commodities and gold typically do well in inflationary periods. Bonds tend to perform during falling growth or deflation. Stocks thrive in periods of rising economic growth. The portfolio aims to have exposure to all four at once, covering all the major economic scenarios, a deliberate design that spreads assets across different economic outcomes. Ray Dalio has famously said that “diversifying well is the most important thing you need to do in order to invest well.” He’s also noted that trying to time the stock market is harder than competing in the Olympics. That’s exactly why the All Weather portfolio was built to handle whatever the future holds, rather than betting on any one outcome. How Does the Risk Parity Strategy Work? The all weather approach targets equal risk contribution from each type of asset, calculated based on each asset class’s volatility and correlation to the others. That’s the reason the bond allocation in Dalio’s all weather portfolio looks so heavy at 55% total. Long-duration bonds are far less volatile than stocks on a dollar-for-dollar basis, so more capital is needed to make bonds contribute equal risk. The Sharpe ratio measures return per unit of risk. Ray Dalio used it to evaluate whether adding two assets to a portfolio improves risk-adjusted return without sacrificing excess return. When the Sharpe ratio of the combined portfolio exceeds either asset alone, the asset allocation is doing its job. By selecting assets with low correlation, Dalio found he could raise the Sharpe ratio while keeping portfolio value more stable. Think of it this way: when the stock market drops, bonds often hold or rise. When inflation spikes, commodities gain. Adding more uncorrelated assets lowers the chance of everything falling at once, which is the core goal of the risk parity approach. Decades of refinement at Bridgewater Associates produced a framework that institutional investors worldwide use as a foundation for asset allocation. What Are the Top ETFs for the All Weather Portfolio? Building this portfolio is straightforward. Five ETFs cover everything, and any standard brokerage account will do. Each represents one of the different asset classes Ray Dalio identified as essential for all-weather coverage. Asset Type Ticker Allocation AUM Expense Ratio 10-Year Return S&P 500 Correlation U.S. Stocks VTI 30% $586B 0.03% 15.11% 1.00 Long-Term Bonds VGLT 40% $11B 0.03% -0.56% -0.03 Intermediate Bonds BIV 15% $29B 0.03% 2.29% 0.26 Gold GLD / GLDM 7.5% $185B 0.40% / 0.10% 15.08% 0.10 Commodities DBC 7.5% $1.5B 0.82% 8.49% 0.44 Data sourced from our Free Index Fund Cheatsheet | Data as of March 3rd, 2026 What Does VTI Bring to the Portfolio? The U.S. stock sleeve at 30% goes to the Vanguard Total Market ETF, VTI. It’s the fourth largest ETF in the market, with $586B in assets spread across over 3,500 U.S. companies.2 The fund carries a 0.03% expense ratio, has averaged 15.11% annually over the past 10 years, and has a near-perfect 1.00 correlation with the S&P 500. For those already familiar with the best ETFs to hold long-term, VTI needs little introduction. It pays a 1.11% dividend yield on a quarterly basis. What About the Long-Term and Intermediate Bond Positions? The bond exposure here is where Ray Dalio’s all weather portfolio earns its stability reputation and its biggest criticism. VGLT, the Vanguard Long-Term Treasury ETF, takes 40% of the portfolio. The fund has $11B in assets, a 0.03% expense ratio, and a dividend yield of 4.35% paid monthly.3 Over the past 10 years, it has averaged -0.56% annually, dividends reinvested. A popular alternative is TLT from iShares, with $45B in assets, a 0.15% expense ratio, and a -1.09% 10-year average. For the intermediate-term bond sleeve at 15%, which covers the intermediate term portion of the yield curve,, BIV from Vanguard holds over 2,300 bonds, carries a 0.03% expense ratio, and yields around 4% annually on a monthly basis.4 Its 10-year average return is 2.29%, with a 0.26 correlation to the S&P 500. An alternative is IEF from iShares, which averaged 0.91% over the same period. Both the intermediate bonds and long-term bonds serve the same structural purpose: low or negative correlation to equities. During market downturns, that correlation gap is what prevents the all weather portfolio from falling as hard as a straight equity portfolio would. What Role Do Gold and Commodities Play? Gold’s 7.5% allocation typically goes through GLD, the SPDR Gold Shares ETF, with $185B in assets and a 15.08% 10-year average return. Long-term holders often prefer GLDM for its 0.10% expense ratio versus GLD’s 0.40%. Hard assets like gold serve as the inflation hedge that most standard portfolios leave out entirely. Gold’s 0.10 correlation to the S&P 500 is what makes it valuable here. During financial market stress, it tends to hold up when stocks don’t. Commodities at 7.5% are typically handled by DBC, the Invesco DB Commodity Index Tracking Fund, which carries a 0.82% expense ratio and has averaged 8.49% annually over 10 years. It pays a 2.88% annual dividend and has a 0.44 correlation to the S&P 500. A higher-cost alternative is USCI, which averaged 7.92% over the same 10 years at a 1.16% expense ratio and holds 29 assets. Both provide coverage when stocks and bonds both struggle during periods of rising inflation simultaneously. What Are the Pros of the All Weather Portfolio? First, let’s take

How Many ETFs Do You Actually Need To Build Wealth?

Businesswoman reading a financial report, deciding how many ETFs she needs for a diversified portfolio

Exchange Traded Funds (ETFs) Have Changed How People Invest ETFs have grown at an incredible rate since they first became publicly available in the U.S. back in 1993. A record $1.1 trillion in net new ETF shares were issued in 2024 alone, according to the Investment Company Institute, up from $597 billion the previous year.1 That growth has led millions of ETF investors to build portfolios full of tickers, operating on a simple assumption: the more exchange traded funds (ETFs) you own, the more diversified you are. In most cases, that assumption is simply wrong. At InvestLane, we’ve been covering exchange-traded funds in depth because they’re one of the most accessible tools for everyday investors. Unlike mutual funds, ETFs trade on a stock exchange throughout the day, with their market price updating in real-time. That means ETF shares can trade at market prices that may or may not match the fund’s net asset value, while mutual fund shares only get priced once a day.2 That accessibility makes ETFs super easy to buy and also easy to over-accumulate. In this article, we cover what most investors get wrong, the ideal ETF count for most situations, when adding more makes sense, and real portfolio examples. What Do Most Investors Get Wrong With ETFs and Mutual Funds? Is Owning More ETFs the Same as Better Diversification? The most common mistake ETF investors make is assuming that more tickers equals better diversification. But buying more ETFs without checking what’s inside creates overlap, not diversification. Here’s a path that plays out all the time. An investor follows Warren Buffett’s advice and buys VOO, Vanguard’s S&P 500 ETF. That’s a solid start, right? Then they add VTI for small and mid-cap exposure. Now they own two Vanguard ETFs and feel more diversified. The problem is that VOO and VTI have roughly 88% overlap by weight. ETFs compared on an overlap basis will usually reveal redundancy far more clearly than looking at expense ratios or net asset value alone. » Stay ahead of your finances: Join our free newsletters today How Do Index ETFs End Up Holding the Same Stocks as Actively Managed Funds? Over time, that investor might add VUG for growth, then VGT for tech. Now there are four Vanguard ETFs in the portfolio, each with its own ETF’s portfolio of underlying investments. But the top positions across all four are the same: Nvidia, Apple, and Microsoft. In the growth and technology-focused funds, those three make up well over 40% of the weight. That’s not diversification across asset classes, it’s a concentrated bet on US large-cap tech made four times over. That’s where correlation comes in. Assets with a correlation near +1 pretty much move identically. Most ETFs in this large-cap category move together, so much that broad market funds tracking similar benchmarks showed this clearly in 2008 and again during the dot-com period. When the market’s going down, highly correlated funds don’t deliver the protection investors expect. What matters isn’t the investment strategy so much as what the funds actually do. Investing involves risk, and knowing what you own is the first step toward managing it. How Many ETFs Do Most Investors Actually Need? Could One ETF Be Enough? For a long-term investor with their finances in order and a time horizon running into five years plus, a single broad ETF might be all they need. A fund like VTI or VOO gives you instant exposure to hundreds of stocks across every major sector of the U.S. economy in a single, easy purchase through your standard brokerage account or IRA. No need to hire a portfolio manager or wade through the complexity of actively managed mutual funds. Warren Buffett put his money where his mouth is by betting $1 million that a single S&P 500 index fund would outdo five hand-picked hedge funds over ten years. In his 2017 Berkshire Hathaway shareholder letter, Buffett reported that the index fund delivered a total gain of 125.8% over that decade, while the five actively managed funds returned anywhere from 2.8% to 87.7% after fees. Not one of them came close to the index fund’s 125.8%.3 That makes a pretty strong case for keeping things simple. What ETFs Fit Most Long-Term Investment Strategy Goals? If you’re looking for a bit more coverage, three to five ETFs is a good sweet spot. A core broad equity ETF, one or two tilts towards other asset classes, and possibly one low-correlation diversifier, that’s about what everyday investors actually need. Once you get past the five ETF mark, each new addition needs a clear purpose. If you can’t clearly see what unique value this fund adds to your portfolio, it’s probably best to skip it. InvestLane’s lazy ETF portfolio is a good example of how five funds can cover some wide ground without unnecessary overlap. When Does It Actually Make Sense to Add More ETFs? What ETFs Fill Genuine Gaps in a Portfolio? The secret is identifying what the core fund is actually missing. Adding VTI to an existing VOO position is not exactly going to fill any gap, after all, they have an 88% overlap. A real gap-filler addresses something the core ETF just can’t touch. For someone holding an S&P 500 ETF, genuine additions include a small-cap value fund like AVUV, which targets smaller companies with different return characteristics. Or a mid-cap fund for that middle tier. International developed markets are another real gap, since most domestic equity ETFs don’t hold any foreign stocks at all. And then there’s VT, which covers both U.S. and international stocks with over 10,000 holdings in a single fund, that’s a complete equity strategy on its own, but between VT and VTI there is a 59% overlap by weight. When Do Bond ETFs and Actively Managed Funds Belong in a Portfolio? Gold ETFs like GLD or GLDM and Bitcoin ETFs like IBIT behave in a totally different way to U.S. stock market funds. They don’t move in lockstep with the S&P 500, which

What Is the 4% Retirement Rule?

Retirement plan investment application form, representing planning retirement withdrawals with the 4% rule

Where Did the 4% Rule Come From? The rule traces back to a financial advisor by the name of Bill Bengen, who published his findings in the October 1994 issue of the Journal of Financial Planning. Bengen tested hypothetical portfolios of large cap stocks and intermediate-term government bonds across every 30-year retirement window from 1926 onward, including periods that included the Great Depression and the stagflation of the 1970s. His conclusion: a 4% initial withdrawal rate survived even the worst historical sequences.1 The Trinity Study followed in 1998, independently confirming Bengen’s work. Researchers tested withdrawal rates across rolling 30-year periods and found that a 4% rate succeeded in the vast majority of scenarios for portfolios with 50–75% in equities. What Does the Initial Withdrawal Rate Actually Mean? The rate of initial withdrawal is the percentage pulled from the portfolio in year one of retirement. After that, it’s a fixed-dollar amount adjusted for inflation annually, not a percentage recalculated against the market’s current conditions. This is the part many people miss. If markets drop 20% in year two, the withdrawal doesn’t shrink with the portfolio. That’s both the strength of the rule (predictable retirement income) and one of its key risks (spending can outpace recovery). » Earn more on your savings: Explore top high-yield savings accounts today How to Use the 4% Rule to Plan Your Retirement Income Before worrying about a withdrawal plan, it helps to know your target savings amount. The Rule of 25 and Your Retirement Savings Target The Rule of 25 is the flip side of the 4% rule. Multiply the annual retirement income needed from the portfolio by 25, and the result will be your approximate retirement savings target. If your goal is withdrawing $60,000 per year from your portfolio, that means you take $60,000 x 25 = $1,500,000. But if Social Security benefits cover $24,000 of that, then the portfolio only needs to produce $36,000, dropping the target to $900,000. Other income sources like pensions or part-time work will reduce the number further. How Retirement Account Type Affects Your Spending Plan Not all retirement funds are treated the same at tax time. Traditional IRAs and 401(k)s are funded with pre-tax dollars, which means every withdrawal is taxable as ordinary income. Roth IRAs, on the other hand, work the opposite way. They offer tax-free withdrawals during your retirement since contributions were already taxed. There’s also the issue of required minimum distributions (RMDs). The IRS requires traditional IRA and 401(k) owners to begin taking withdrawals at age 73, whether they need the money or not.2 Those mandatory withdrawals count as taxable income and can affect tax rates, Medicare surcharges, and how much of Social Security benefits gets taxed. For a side-by-side look at the best retirement account options for different situations, see this breakdown of the best IRA accounts for 2026. What Are the Risks of the 4% Rule? The rule was built on historical data and specific assumptions. The further a person’s situation drifts from those assumptions, the more the risk picture changes. How Life Expectancy and Longevity Risk Play a Role Bengen’s original research was built around a 30-year retirement horizon. That made sense when the typical retirement age was 65 and life expectancy was shorter. Today, according to SSA actuarial data, a 65-year-old has a reasonable chance of living into their late 80s or beyond, and many retirees make it well into their 90s.3 Someone retiring at 60 may need their retirement savings to last 35 years or more. That’s a significantly different scenario than the one the 4% rule was designed around, and it’s one of the biggest reasons longevity risk deserves a close look in any retirement plan. Market Downturns and Sequence of Returns Risk Sequence of returns risk is the risk that poor market conditions early in retirement, even temporarily, can permanently damage a portfolio. Two people with identical long-run average returns can end up with dramatically different outcomes depending on when those returns occurred. Let’s take two retirees, each with $1,000,000 and each averaging 7% annually over 30 years. One retires into a strong bull market early on and a bear market late. The other faces market downturns in years 1 through 3. The second retiree, forced to sell assets at depressed prices to fund annual withdrawals, will run out of money years before the first. The long-run average return looks the same on paper. The retirement income outcomes couldn’t be more different. Rising Costs, Inflation, and Medical Expenses Inflation adjustments built into the 4% rule assume a relatively steady rate of price increases. The 2021–2022 inflation spike, where CPI hit multi-decade highs, showed what happens when that assumption breaks down.4 A retiree using the 4% rule would have been forced to sharply increase withdrawals during that stretch, accelerating the drawdown of their portfolio. Medical expenses add another layer. Healthcare costs have consistently outpaced general inflation for retirees, making it one of the harder categories to budget for in a rigid spending plan. Are Current Market Conditions Changing the Rule? What Historical Data Tells Us About Future Performance The 4% rule held up across some of the worst stretches in U.S. market history. That’s reassuring, but it doesn’t mean the next 30 years will look like the last hundred. Some financial researchers have noted that starting equity valuations today are meaningfully higher than historical averages, which can point to lower forward returns over the following decade. Higher starting valuations are particularly important for a withdrawal strategy that depends on the first 5–10 retirement years to set the trajectory. How Market Fluctuations Affect Portfolio Balance A balanced portfolio of stocks and bonds has historically provided the stability needed to support the 4% rule. Bonds will cushion the downside when stocks fall, giving the equity portion time to recover before too much of the portfolio is sold. When bond yields are low, that cushion gets thinner.  Market fluctuations hit harder when fixed income isn’t generating meaningful returns. Retirees who rely on a

Index Fund Investing For Beginners

American flag with a rising financial chart overlay, representing index fund investing for beginners in the US stock market

What Is an Index Fund? Why Thinking of It Like a Grocery Receipt Actually Helps Think of a grocery receipt. It lists everything in the cart, chicken, rice, bananas, each at its own price, and at the end there’s one total. Nobody goes to the store and buys 50 items one at a time from 50 different registers. And nobody blows the whole budget on bananas. The goal is variety, all wrapped up in one trip. That’s essentially how index fund investing works. Instead of buying dozens of individual stocks separately, you can just buy a single index fund that bundles a collection of investments, usually stocks or bonds, into one purchase. You’ll then get instant exposure to a broad slice of the financial markets without having to pick and manage everything yourself. How Do Index Funds Work? The S&P 500 is probably the best-known example. It follows 500 of the biggest publicly traded companies in the U.S. and is often used as a snapshot of the overall market. When you buy an S&P 500 index fund, you’re getting a slice of companies like Apple, Microsoft, Nvidia, and hundreds more, all in one transaction. Most index funds use a market capitalization weighted index structure. That means larger companies carry more weight inside the fund. It’s also why the top 10 portfolio holdings in something like VOO make up close to 40% of its total value. Another major benchmark worth knowing is the Dow Jones Industrial Average, which tracks 30 large U.S. companies and has been around for over a century. These market indexes give investors and analysts a quick read on how the broader stock market is doing. Because index funds are passively managed, no fund manager is sitting there making daily buy and sell calls. The funds track market indexes automatically, which is a big part of why they stay so inexpensive to own. » Start investing today: Explore top brokerage accounts with our detailed review What’s the Difference Between an ETF and a Mutual Fund? An index fund can come in either a mutual fund or ETF structure. Both can track the same index, but they work a little differently. Index ETFs trade throughout the day on stock exchanges, just like individual stocks. They’re available on pretty much any investing platform, tend to have no minimum investment requirement, and are generally more tax efficient because of how they handle redemptions. Tickers are usually three or four letters, like VOO. Index mutual funds only trade once per day, at market close. Many require going through the mutual fund company’s own brokerage to avoid extra transaction fees, and some carry a minimum investment to get started. Tickers are typically five letters, like VFIAX. Both VOO and VFIAX track the S&P 500, but one’s an ETF and the other is a mutual fund. For most beginners, index ETFs offer more flexibility and better tax efficiency. The distinction is a lot more important than people realize, especially in taxable investment accounts. For a closer look at the tax side of things, this breakdown of ETFs vs. mutual funds is worth a read. How Does Diversification Cut Risk? Here’s a simple way to see why diversification makes such a big difference. Put $10,000 into two stocks, $5,000 each. One company goes under. The stock values in that position go to zero, and the portfolio is down to $5,000 instantly. Now put that same $10,000 into an S&P 500 index fund with 500 holdings. One company collapses. The hit is spread across all 500 positions, and the portfolio barely moves. That’s how many index funds provide exposure to hundreds of companies while limiting the damage any single bad bet can do. A broadly diversified index fund doesn’t guarantee gains, but it does make catastrophic losses much harder to hit. Why Do Index Funds Beat Actively Managed Funds? The Cost of Owning an Actively Managed Fund The annual cost of owning a fund is called the expense ratio. It comes out of the fund automatically over time, investors never write a check for it. For a passively managed fund like VOO, the expense ratio is 0.03%. That’s $3 a year on a $10,000 investment. Data from Charles Schwab puts the average passively managed mutual fund at a 0.05% expense ratio, compared to 0.76% for actively managed mutual funds.1 That gap might look tiny on paper, but run the numbers and they tell a different story. Two investors, same $1,000 monthly contribution, same 10% average annual return, same 30-year window. The one in the passive fund ends up around $2 million and pays roughly $18,000 in total fees. The one in the actively managed fund lands closer to $1.7 million, having paid about $263,000 in fees. That’s nearly $250,000 lost to costs, and it happens year after year, without most people noticing until it’s too late. » Stay ahead of your finances: Join our free newsletters today Do Actively Managed Funds Actually Beat the Market? Here’s what most people assume: professionals running actively managed investments must produce better returns than a passive index fund, otherwise why pay for them? The SPIVA U.S. Year-End 2024 Scorecard from S&P Dow Jones Indices shows a different picture. In 2024, 65% of all large-cap actively managed funds underperformed the S&P 500. Over the 15-year period ending December 2024, there was no category, not one, where a majority of active managers beat their benchmark.2 These aren’t amateur operations. These are full teams of analysts with decades of experience, and roughly two out of three still can’t keep up with a simple index. As Ray Dalio has put it, trying to time the market is harder than competing in the Olympics. Index funds are safer for most investors not because they’re flashy, but because they remove the guessing. For more on why staying consistent usually wins, this article on trying to time the market makes a strong case with real data. What Are the Best Index Funds to Consider? Most investors don’t

4 Best Dividend ETFs to Buy in 2026

Hand placing the last blue piece to complete a colorful set of blocks, representing adding the best dividend ETFs to complete a portfolio

What Are Dividend ETFs? Dividend ETFs are exchange-traded funds built around dividend-paying stocks. Instead of picking individual companies, you buy a single fund that holds a basket of dividend payers across different sectors. That gives you instant diversification, low management fees, and regular dividend payments on a recurring schedule. Most of these popular dividend ETFs are set up as a standalone share class on the New York Stock Exchange, with a live market price. You can buy or sell them at any time through a brokerage firm, unlike traditional mutual funds, which are often more complicated to trade. Plus, because of how they are structured, they’re generally more tax-efficient than mutual funds, so you’re less likely to be hit with any unexpected distributions at the end of the year. » Start investing today: Explore top brokerage accounts with our detailed review What Are the Four Best Dividend ETFs in 2026? At the top of the list for most popular dividend ETFs right now are VIG, VYM, DGRO, and SCHD. Each one of these ETFs has a different approach to finding dividend-paying stocks, and they all serve different investment goals. Here’s a quick rundown on each. VIG: A Dividend ETF Built for Long-Term Growth VIG is the Vanguard Dividend Appreciation ETF, with $104 billion in assets.1 It’s the largest dividend equity ETF out there, and tracks the S&P U.S. Dividend Growers Index, which focuses on companies that have a history of raising their dividend payouts every year. It excludes the top 25% highest-yielding stocks and real estate investment trusts entirely. VIG holds 339 stocks, with its top 10 making up 33.22% of the fund. The expense ratio is 0.04%, or $4 per year on a $10,000 investment. The dividend growth rate over the last 10 years is 6.94% per year, and the fund has averaged 13.57% in annual total returns over the same period. For investors who can play the long game, those numbers make a compelling case. » Want to see more? Compare top index funds through our free cheatsheet VYM: The High Dividend Yield ETF for Diversification The Vanguard High Dividend Yield ETF, VYM, tracks the FTSE High Dividend Yield Index, which focuses on stocks forecasted to pay above-average dividends.2 Vanguard High Dividend Yield is the broadest portfolio of the four, with 562 holdings across market cap ranges and sectors. It has a 0.04% expense ratio and holds $75 billion in assets. VYM gives you a 2.26% trailing twelve-month yield, a 5.00% average annual payout increase rate over the past 10 years, and 100% qualified dividends in 2025. The fund has averaged 12.14% in annual total returns over the past 10 years. Consumer staples, financials, and energy-oriented dividend-paying stocks carry more weight here because the index screens for high yield rather than growth. If you want a high dividend ETF generating steady dividend income with broad diversification across sectors, VYM delivers. DGRO: A Balanced Dividend Growth ETF DGRO is the iShares Core Dividend Growth ETF from BlackRock, tracking the Morningstar U.S. Dividend Growth Index.3 The fund holds companies with a history of sustained dividend increases, spread out across sectors and asset classes. iShares Core ETFs like DGRO are designed as long-term building blocks for your investment portfolio.   DGRO holds 395 stocks, with the top 10 making up 26.30% of the fund. The expense ratio is 0.08%. The trailing twelve-month yield is 1.97%, and the 10-year average payout appreciation rate of 8.59% per year is the second highest here. Where DGRO really stands out is total returns: its 10-year average annual return of 13.86% is the highest of all four funds. DGRO reported 100% qualified dividends in 2024, pays quarterly, and holds a 43% overlap with the S&P 500. » Stay ahead of your finances: Join our free newsletters today SCHD: The High Dividend ETF for Income SCHD is the Schwab U.S. Dividend Equity ETF, built with a very strict set of screening requirements. Charles Schwab designed it to track the Dow Jones U.S. Dividend 100 Index – which in turn requires companies to have paid out dividends for at least 10 consecutive years.4 When evaluating cash flows, financial health and yield relative to other companies in the same sectors is also taken into account. SCHD holds a relatively small 101 stocks but the top 10 make up 42.14% of the fund. The 3.32% trailing twelve-month yield is the highest of all four funds, as well as the 10-year dividend payout increase rate of 10.61% per year. The fund holds an impressive $85 billion in assets, charges just 0.06%, and has averaged 12.73% in annual total returns over the past 10 years. In 2025, 98.48% of dividends were qualified. SCHD has a modest 7% overlap with the S&P 500, which means that investors who hold a core index fund can still add real diversification to their portfolio. How Do These 4 Dividend ETFs Compare? Metric (data as of 3/10/2026) VIG VYM DGRO SCHD AUM $104B $75B $39B $85B Year Launched 2006 2006 2014 2011 Expense Ratio 0.04% 0.04% 0.08% 0.06% Total Holdings 339 562 395 101 Dividend Yield (TTM) 1.56% 2.26% 1.97% 3.32% Dividend Growth 10Y (CAGR) 6.94% 5.00% 8.59% 10.61% Qualified Dividends 100% (2025) 100% (2025) 100% (2024) 98.48% (2025) 10-Year Annual Return 13.57% 12.14% 13.86% 12.73% S&P 500 Overlap 41% 35% 43% 7% Best for Long-Term Growth Diversification Balanced Growth Income No single fund wins every category. VIG and DGRO come out ahead on total returns, SCHD wins on yield and payout increases and VYM leads on diversification. Many investors in the investing community built around passive income strategies end up holding two of these along with a core index fund for broader exposure. Which Dividend ETF Is Right for You? What you’re after really does drive the choice. Each fund is built with a very specific goal in mind. For long term payout appreciation and total returns, VIG is your best bet. It focuses on companies with a proven record of raising their dividend payouts and has averaged a

Live Off Dividends: How Much Do You Need?

Golden egg surrounded by stacks of dollar bills, representing the nest egg you need to live off dividends

What Does It Mean to Live Off Dividends? When you buy dividend paying stocks or ETFs that actually pay out dividends, you get a steady income stream while your investment still grows in value over time. That’s the beauty of dividend investing, the reliable income plus stock price growth is what makes it such a great strategy for retirement, especially when you don’t have to sell any stocks to get that income. But of course, how much income you need from dividends depends on your lifestyle and where you live. According to MIT’s Living Wage Calculator, living costs vary dramatically from state to state.1  For this article we’re going to use $50,000 per year as a rough estimate of what a lot of households need to get by, and adjust it up or down as needed. Dividend Basics How Dividend Yield Works The dividend yield is the percentage of your investment that comes back to you as dividend income each year. Put $1,000 in a stock like Apple with a 0.42% yield and you’ll collect $4.20 in dividend income each year – not a lot. To get $50,000 in dividend income at that rate, you’d need to invest around $12 million. That’s why the yield you target, and the dividend stocks you pick, are everything when it comes to make living off dividends a reality. » Stay ahead of your finances: Join our free newsletters today Dividend Aristocrats and Picking Quality Dividend Stocks If you want to retire on dividends, you should probably start by looking at the companies known as Dividend Aristocrats. These are S&P 500 stocks that have raised their dividends for at least 25 years straight, which means they’ve demonstrated the ability to keep their promises to shareholders. These include Realty Income, which has a 5% dividend yield, and companies like Target and Chevron. At a 5% yield, you’d need about $1 million invested to get $50,000 in dividend income a year, far more achievable than the $12 million we mentioned previously. Fixed Dividends and the Risk of Stock Concentration Putting all your dividend eggs in one basket is a recipe for disaster. If that one stock’s dividend gets cut, you could lose a large portion of your income. That’s why building a diversified portfolio, with a mix of dozens of dividend-paying stocks, is so important. Even big companies with decades of consistent dividends have cut their payouts during downturns, and the stock price tends to drop right along with it. By spreading your dividend income across several different companies, you can create a more reliable income stream. Why ETFs Are a Safer Bet for Dividend Investors The Schwab U.S. Dividend Equity ETF (SCHD) is one of the most popular dividend ETFs out there, and for good reason; it tracks the Dow Jones U.S. Dividend 100 Index, which picks stocks based on cash flow, dividend yield, and five-year dividend growth rates.2 By buying one ETF, you get dividend income from 100 different stocks, including companies like Lockheed Martin, Chevron, Coca-Cola, and PepsiCo, making a combined dividend yield of around 3.45%. To get $50,000 in dividend income at that rate, you’d need to invest about $1.45 million, which is a lot more achievable than $12 million. Tax Considerations for Dividend Investors Ordinary vs. Qualified Dividends Not all dividends are created equal when it comes to taxes. The IRS separates them into two categories: qualified and ordinary dividends. Qualified dividends get a lower tax rate (0%, 15%, or 20%) while ordinary dividends are taxed at your regular federal income rate.3 To be eligible for qualified dividend treatment, you need to hold onto that stock for more than 60 days during a 121-day window that starts 60 days before the stock goes ex-dividend. Of course, just holding onto your stocks for at least a few months without trading around dividend payments should be enough. When Dividends Generate Ordinary Income High-yielding investments tend to generate ordinary income taxed at the higher ordinary rate rather than the lower qualified rate as long-term capital gains. Real estate investment trusts (REITs), many foreign stocks, and ETFs that use options strategies usually fall into this camp, and that distinction can end up costing you significantly over time. Take JEPI, the JPMorgan Equity Premium Income ETF, as an example. With an average 8% dividend yield on a $100,000 investment, that’s around $8,000 in dividend income per year. But because JEPI’s cash flows come largely from options strategies, those dividends are mainly classified as ordinary income. In the 22% federal bracket, that works out to around $1,648 in taxes, leaving you with about $6,352 from an ending 1.65% annual tax drag. This impact is detrimental long-term. Compare that to SCHD, the Charles Schwab U.S. Dividend Equity ETF. Say a 4% yield on $100,000, you’d earn around $4,000 in dividend income. SCHD holds dividend-paying stocks that generate qualified dividends, so a long-term investor in the 15% bracket owes around $600 in taxes, keeping about $3,400 with an end 0.6% annual tax drag.4 Here’s where people get confused: JEPI still puts more cash in your pocket in year one, $6,352 versus $3,400. So why does tax efficiency matter? Two reasons. First, in a taxable account, JEPI’s distributions trigger a tax bill every single year whether you need the income or not. That annual tax drag (1.65% from this example) quietly eats into your compounding over time. Over 20 or 30 years, that difference becomes a significant gap in portfolio value. Second, JEPI’s covered call strategy caps your upside. You’re trading long-term price growth for income today, while SCHD has historically delivered meaningful price appreciation alongside its dividends. » Get your free InvestLane score: See how your portfolio aligns with your financial health. Tax-Advantaged Accounts and Dividend Income This is largely a taxable account problem, and the Roth IRA solves it. Contributions go in after-tax, dividends compound inside the account without any annual tax drag, and at age 59 1⁄2 or older, all withdrawals come out completely tax-free, including

The 6 Best Dividend ETFs for Taxable Accounts

Dollar bills with a business chart, representing the best tax-efficient dividend ETFs to hold in a taxable brokerage account

Taxable Accounts & Dividend ETFs Most people trying to pick dividend ETFs for a taxable account typically focus on the yield. Not the smartest move. What you end up with after taxes matters just as much as what you earn, and chasing the highest dividend yield without thinking about total return and your taxable account investing strategy can quietly work against you. The Hidden Cost of Chasing a High Dividend Yield Let’s say you own a fund with a 6% dividend yield, but the total annual returns only average 2%. That means on a $100,000 investment you’d be taking home $6,000 in dividend payments in year one, but you’d also be watching your principal value slide down to $96,000. That’s not income, that’s basically just selling at a discount. Now flip it on its head; a fund with a 3% dividend yield but 10% annual returns would give you $3,000 per year in income, and the value of your investment would also grow to $107,000 in year one. Your dividends and your investment value are actually growing together. That’s the kind of thinking that goes into every single one of these picks. And the sad truth is many individual investors who focus on yield alone end up worse off than those who prioritize total return. The Real Difference Between Qualified & Ordinary Dividends Not all dividends are treated the same way by the IRS, and the difference between qualified vs ordinary dividends can actually mean the difference between 22% and 0% tax. Qualified dividends get taxed at capital gains tax rates of 0%, 15%, or 20% depending on your taxable income. For 2026, a single filer can have up to $65,550 in gross income and still have zero federal capital gains tax to pay, and married couples can have up to about $131,100. Keep in mind those are federal numbers only, state taxes will vary. All six of the ETFs below are set up to produce primarily qualified dividends, making them a whole lot safer for taxable accounts than covered call funds, leveraged products, or REITs. The 6 Best Dividend ETFs The 6 Best Dividend ETFs at a Glance (Data as of March 20, 2026) ETF Assets Under Management (AUM) Holdings Top Sector Expense Ratio Dividend Yield (TTM) Dividend Growth Rate (10Y) Qualified Dividends Frequency 10Y Avg. Return VOO $855B 504 Tech (34.40%) 0.03% 1.12% N/A* 97.16% (2025) Quarterly 15.55% SCHD $76B 102 Energy (19.34%) 0.06% 3.34% 10.61% 100% (2024) Quarterly 12.73% DGRW $16B 200 Info Tech (26.19%) 0.28% 1.39% 6.83% 100% (2023) Monthly 13.67% DIA $44B 30 Financials (27.87%) 0.16% 1.38% 5.60% 100% (2024) Monthly 13.76% DGRO $37B 396 Financials (20.32%) 0.08% 1.96% 8.59% 100% (2024) Quarterly 13.88% VYM $72B 563 Financials (21.90%) 0.06% 2.25% 5.00% 100% (2024) Quarterly 12.14% 1. VOO: Growth VOO isn’t a traditional dividend equity ETF because the yield is low and that’s just fine. It belongs on this list because the biggest mistake people make when investing in dividend ETFs in taxable accounts is ignoring total return in favor of yield. With VOO’s current performance record you get instant diversification across 504 companies at a 0.03% expense ratio, making it the single most cost-effective exchange traded fund on this list. No other fund on this list even comes close to VOO’s combination of breadth and low cost. And with $855B in assets, VOO is the largest ETF by assets in the world.1 The ten-year average return of 15.55% means even if you pull your dividends as income you’re still averaging over 14% per year. Your investments keep compounding even while you take distributions. 2. SCHD: High Yield SCHD tracks the Dow Jones U.S. Dividend 100 Index which is a rules-based dividend index that screens dividend stocks for cash flow, financial strength, and dividend sustainability, not just their current yield. Energy is the top sector at 19.34%, which gives SCHD a very different profile from the tech-heavy S&P 500. Only 7% of the funds overlap with VOO, so these two make a great pair. With $76B in assets, SCHD is one of the most widely held income funds around.2 The standout stat: Dividends have more than doubled over the past decade, up 10.61% per year, meaning the income generated by this SCHD dividend ETF ended up being more than double that of a decade ago. On top of that, the ten-year average return of 12.73% means the underlying investment still grew solidly even while you were taking dividends as income. 3. DGRW: Monthly Income & Growth DGRW is a fund that tilts towards growth and pays out monthly, a pretty rare combination. Unlike most dividend indexes that only consider companies with a long history of consecutive dividend payouts, the WisdomTree U.S. Quality Dividend Growth Index takes a more forward-looking approach, selecting companies based on their profitability, earnings growth and their ability to sustain and grow those dividends. That’s why the fund holds stocks like big tech alongside the traditional dividend payers.3 The 0.28% expense ratio is the highest on the list, but the main draw here is getting those dividends every month and a ten-year return of 13.67% that trails the S&P 500 by about 1% a year. But, in a good way, DGRW’s worst year over the past decade was down a relatively small 6%. If you want your dividends delivered monthly with less volatility, compared to VOO which was down 18%, there is a trade-off to consider. DGRW is certainly a good choice for investors who want regular income, but with less risk. Dividends were 100% qualified as of 2023. 4. DIA: Monthly Income & Stability DIA is the only ETF tracking the Dow Jones Industrial Average index: 30 blue-chip stocks, and its dividends are paid monthly since its inception back in 1998.4 It is actually structured as a unit investment trust rather than a standard ETF, though it trades the same way on exchanges. Goldman Sachs is the biggest holding at a rate of 11.5%, calculated based on the index’s price-weighting rules,

7 Best ETFs to Hold in a Roth IRA for Long-Term Investing

Businessman planting a money tree growing from coins, representing tax-free long-term growth with the best ETFs in a Roth IRA

Why a Roth IRA Is So Portfolio The Roth IRA is one of the most powerful retirement accounts available. You contribute after-tax money, your earned income gets taxed upfront, and from that point forward everything grows completely tax free. Once you reach 59 and a half and meet the 5-year rule, withdrawals are tax free too. No capital gains taxes. No taxes on dividend income. Nothing owed on the way out.1 Unlike a Traditional IRA, where withdrawals are taxed as ordinary income, the Roth IRA lets your money grow completely tax-free. Contribution Limits and the Math Behind It The 2026 contribution limit is $7,500 per year, or $625 per month for those under 50.2 Max that out for 20 years and you could be sitting on roughly $500,000. Hold 30 years and that climbs to $1.3 million. Go 40 years and you are looking at $3.5 million, completely tax-free. Compound interest does the heavy lifting, returns generating their own returns. For single filers, eligibility begins phasing out at $153,000 in modified adjusted gross income for 2026. ETF Basics An exchange-traded fund (ETF) holds a basket of assets, often hundreds of individual stocks, bonds, or other securities in a single purchase. That built-in diversification at low cost is why ETFs have become one of the most popular investment options for retirement accounts. ETFs vs. Mutual Funds and Individual Stocks Unlike individual stocks, you are not betting on one company. Unlike mutual funds, ETFs trade on a stock exchange throughout the trading day at market prices. ETFs also tend to be more tax efficient than mutual funds because they generate fewer taxable events through how shares are created and redeemed.3 Inside a Roth IRA the account is already sheltered, so the bigger win is keeping low expense ratios. At 0.03%, you pay $3 per year per $10,000 invested. Over decades, that gap between a low cost fund and a pricier one compounds into serious money. The ETFs below were selected for long-term, 10+ year Roth IRA investing. Each serves a distinct role in a diversified portfolio. 1. Vanguard S&P 500 ETF (VOO) The S&P 500 Core Every Portfolio Needs VOO is the largest ETF in the world at $871 billion in assets, tracking the S&P 500 with 504 holdings, a 1.11% dividend yield, and a 0.03% expense ratio. Top ten holdings are 39% of the fund. Tech weighs in at 34%. As of February 28, 2026: 16.92% past year, 14.13% five-year average, 15.46% ten-year average. Dividends reinvested, expense ratio included. Warren Buffett has said that many investors are best served by a simple S&P 500 ETF, and publications from USA Today to The Motley Fool have echoed that for years. For Buffett’s own two-fund approach, the Warren Buffett 2-fund portfolio breakdown on InvestLane covers it. 2. Schwab U.S. Large Cap Growth ETF (SCHG) Large-Cap Growth for a Long-Term Roth IRA SCHG tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. Launched in 2009, it has $50 billion in assets, a 0.04% expense ratio, and 198 holdings. The top ten make up 58% of the fund, with 48% in technology. This is a growth-heavy fund with a 0.36% dividend yield, most of these companies reinvest earnings rather than pay dividends. Past year: 13.13%. Five-year average: 14.48%. Ten-year average: 18.32%, roughly 3% per year better than VOO over the same stretch. There is a 54% overlap by weight with the S&P 500, so holding both intentionally tilts the portfolio toward growth names. That is the point. 3. Invesco S&P MidCap Momentum ETF (XMMO) Mid-Cap Stocks With a Momentum Edge XMMO holds the 79 securities in the S&P MidCap 400 index with the highest momentum scores. It launched in 2005, has $6 billion in assets, and carries a 0.35% expense ratio, higher than VOO or SCHG, but the data makes a case for it. The top ten holdings are 33% of the fund, tech is 20%, and the fund has 0% overlap with the S&P 500 by weight. Past year: 23.98%. Five-year average: 13.68%. Ten-year average: 19.48%, the highest 10-year figure of the first three core picks. For a long-term Roth IRA, that kind of genuine diversification away from the large-cap index is exactly what other factors in a portfolio can help balance out. 4: Avantis U.S. Small Cap Value ETF (AVUV) Small Cap Value With an Active Tilt Small cap stocks potentially carry more risk, but historically have also delivered strong long-term returns. AVUV tracks the Russell 2000 Value index and is actively managed to focus on companies with low valuations and higher profitability. It launched in 2019, has $22 billion in assets, a 0.25% expense ratio, and 784 holdings, broad, well-diversified exposure. The top ten make up just 8% of the fund, with only 6% in tech. Past year: 23.76%. Five-year average: 12.70%. No 10-year data since the fund launched in 2019. Zero overlap with the S&P 500 by weight. Many investors who dig into small cap research point to this category as one of the strongest long-term performers across asset classes. » Want to see more? Compare top index funds through our free cheatsheet 5: Invesco S&P International Developed Momentum ETF (IDMO) International Stocks for Broad Exposure IDMO tracks the S&P World Ex-U.S. Momentum Index, targeting developed international markets with the strongest price momentum. It launched in 2012, has $3 billion in assets, a 0.25% expense ratio, and 182 holdings. The dividend yield is 3.59% over the past 12 months, the highest of the seven core picks and a solid source of dividend income inside a tax-free Roth account. Past year: 41.99%. Five-year average: 16.21%. Ten-year average: 14.00%. Zero overlap with the S&P 500 by weight. Many large US companies already have significant revenue from emerging markets and global operations, but IDMO adds a layer of investors exposure to international developed economies that the domestic funds simply do not capture. 6: Fidelity Wise Bitcoin Fund (FBTC) Bitcoin Exposure in a Regulated Fund Bitcoin is volatile, that is not a secret.

The 10 Largest ETFs in the Market (by AUM)

Star image representing the 10 largest ETFs in the market by assets under management

When trillions of dollars keep on pouring into the same small group of funds year after year, there has to be a reason for it. The 10 largest ETFs in the world, ranked by assets under management, are an absolute behemoth with assets dwarfing the GDP of most countries. Every last one of them is a passive index fund, not a single one is an actively managed strategy. That’s not a coincidence. Assets under management, or AUM, is the total value of everything that a fund holds. And the bigger that AUM figure, the more investors are basically saying they trust it with their hard-earned cash. For anyone just starting to learn how to invest in ETFs, knowing where the really big pools of money are is a great place to start. What Are Exchange-Traded Funds? An ETF is a basket of investments with stocks, bonds, commodities, or a mix that trades on a stock exchange just like a regular stock. The price of ETFs updates in real time throughout the day, so you always know what you’re paying. That’s the biggest practical difference from mutual funds, which only compute a price once per day after the market closes. Both ETFs and mutual funds offer broad diversification, can be actively or passively managed, charge an expense ratio, and support automatic investing and fractional shares depending on the broker. The structure is more similar than most people realize. Where they split is in the everyday details. Mutual funds are typically bought through a specific brokerage, may require a minimum investment, and use five-letter tickers like VFIAX. ETFs on the other hand, trade on nearly any platform, have no account minimums, and are generally more tax-efficient due to how shares are created and redeemed behind the scenes. Most ETFs use a passive strategy which means the fund tracks an index rather than having a manager pick stocks. That keeps costs low and, as the data shows, gives long-term investors a consistent edge. The 10 Largest ETFs by AUM All 10 are passive index funds, so no of them rely on active stock selection.  Now, let’s take a closer look at each one of these ETFs. All data is as of March 3, 2026. #1: Vanguard S&P 500 ETF (VOO) – $872 Billion First on the list is VOO, which is the world’s biggest ETF, with $872 billion in assets under management.1 It tracks the S&P 500 index, giving investors exposure to 503 of the largest publicly traded U.S. companies. Technology is the biggest sector at 34.1%, and the top 10 holdings account for 38.4% of the total weight. Launched in 2010, VOO has become the benchmark for cost-conscious long-term investors. The cost is just 0.03% which is a low $3 per year on every $10,000 invested. Over the past 10 years, VOO has averaged an annual return of 15.54%. Plug that into a compound growth formula and $100,000 invested 10 years ago would have grown to approximately $423,959, not too shabby by any standard. The trailing 12-month dividend yield is 1.1%. For a full breakdown, see the VOO ETF review on our website. #2: iShares Core S&P 500 ETF (IVV) – $751 Billion Next we have IVV. This is the second largest ETF in the world, managed by iShares. IVV tracks the same S&P 500 as VOO with the same 0.03% expense ratio.2 The 10-year annualized return is 15.55% and it launched in 2000, making this one of the oldest S&P 500 ETFs still trading. IVV and VOO are near-identical in performance, the only real difference is the issuer. To compare all the leading S&P 500 options, see 5 Best S&P 500 Index Funds. #3: SPDR S&P 500 ETF Trust (SPY) – $693 Billion Moving on to SPY. It launched in January 1993 as the first ETF listed in the U.S. and remains the most heavily traded ETF on the market with roughly 80 million shares trading daily. That liquidity makes the SPDR S&P product the go-to for institutional traders, options strategies, and anyone who needs to trade large positions quickly. The expense ratio is 0.0945% which is more than three times the cost of VOO or IVV. That adds up over the long term. For long-term buy-and-hold investing, VOO or IVV are the more cost-efficient options. #4: Vanguard Total Stock Market ETF (VTI) – $586 Billion VTI tracks the entire U.S. stock market across 3,511 stocks covering large, mid, and small-cap.3 The expense ratio is 0.03% and it launched in 2001. VTI and VOO overlap by about 88% because the S&P 500 dominates U.S. market cap. The 10-year annualized return is 15.11% versus VOO’s 15.54%. The real difference is small-cap exposure, VTI gives you companies that VOO leaves out entirely. Both trade on major exchanges and both are solid long-term investment options. The choice comes down to whether that extra exposure is important to you. » Want to research further on your own? ​Explore our top financial tools and resources now #5: Invesco QQQ Trust (QQQ) – $396 Billion QQQ tracks the Nasdaq 100 Index, covering the 100 largest non-financial companies on the Nasdaq exchange.4 Launched in 1999, it holds 102 stocks with tech making up 59.77% of the total weight. The top 10 holdings represent roughly 47% of the whole fund which is far more concentrated than a broad S&P 500 ETF.  Over the past 10 years, QQQ averaged 20.45% per year, that’s a very strong return. Using compound growth, $100,000 invested 10 years ago would be approximately $642,788 – compared to VOO’s $423,959 over the same period. But with that comes more risk. QQQ is so heavily weighted to tech that it gets hit hard in downturns and rips ahead in bull markets. The expense ratio is 0.18%. Long-term investors who want similar exposure at lower cost might want to consider QQQM. The QQQ vs QQQM breakdown is worth a read. » Stay ahead of your finances: Join our free newsletters today #6: Vanguard FTSE Developed Markets ETF (VEA) –

Qualified vs. Ordinary Dividends: How to Save Thousands on Your Taxes

Calculator, glasses, pen and paper money, representing calculating the tax difference between qualified and ordinary dividends

You know dividends get taxed, but the important question is, how? According to the IRS, qualified dividends get taxed at the long-term capital gains rate, which is either 0%, 15%, or 20%. Ordinary dividends, on the other hand, are taxed as regular income, and that can be anywhere from 10% to 37%.1 For someone in the 22% or 24% bracket, that gap is real money, we’re talking thousands of dollars on the exact same payment. Qualified Dividends: Overview What Makes a Dividend ‘Qualified’ To qualify for the special tax break, a dividend has to meet three specific IRS requirements. The dividend must be paid by a U.S. company or a qualified foreign corporation. You must meet the required holding period (generally more than 60 days within the 121-day period around the ex-dividend date). The dividend can’t come from certain investments like REITs or other non-qualifying entities. Your position can’t be hedged using options or other derivatives (for example, using certain options strategies that reduce your risk of loss). All of those criteria have to be met. If any one of them is missed out, then the dividend is taxed as an ordinary dividend, and you have to pay the higher rate taxed on top of your ordinary income. The Holding Period Rule This often catches investors off guard. The holding period requires that you’ve held the shares for more than 60 days during the 121-day period that starts 60 days before the ex-dividend date. And this date is the cutoff that the company sets to determine who’s eligible for the dividend. If you buy before the date and hold it long enough, you qualify for the lower rate. But if you buy right before and sell right after, you won’t qualify. The same rules apply at the fund level, it’s the fund’s ex-dividend date that determines whether the dividend is qualified or non-qualified. For preferred stock, the rules are a bit stricter. You need to hold the shares for 90 days in an 181-day period when you’re covering periods over 366 days.2 Qualifying Foreign Corporations Dividends from foreign companies aren’t automatically disqualified. They do need to be based in a country with a U.S. tax treaty or trading on a major U.S. stock exchange to qualify. Note that not every foreign corporation qualifies; it has to be established before the tax break applies. Payouts from these foreign corporations still have to meet the holding period to qualify for the preferential rate. This is a big deal for anyone holding international ETFs or ADRs in a taxable brokerage account. Check your Form 1099-DIV to see how each holding reported its dividends, and whether they were qualified or not. » Start investing today: Explore top brokerage accounts with our detailed review Ordinary Dividends: Overview What Investments Produce Non-Qualified Dividends Some types of investments nearly always generate non-qualified dividends, regardless of how long you’ve held them. Real Estate Investment Trusts or REITs, are a common example. Because they’re a pass-through entity, the dividends you get from them are usually not considered qualified, and you’ll pay ordinary income tax on them. Money market funds (unless municipal) also don’t qualify because their payouts are reported as interest income. Then there’s credit unions, which technically pay “dividends” on your savings account, but those are just interest income, and you’ll pay ordinary rates on them. Dividends from certain foreign companies that don’t meet U.S. tax rules are also non-qualified and taxed at higher rates. High-income producing ETFs that use options strategies, such as JEPI or JEPQ, also generate dividends that are generally not qualified, meaning they are taxed at ordinary income rates as well. Because these payouts are taxed as regular income, they follow the ordinary income tax brackets. The table below outlines the 2026 ordinary income tax brackets that apply to nonqualified dividends. Source: Internal Revenue Service, Revenue Procedure 2025-32. See our guide to the 2026 capital gains tax brackets. Knowing this ahead of time can save you some headaches when it comes to doing your taxes. Dividends & Capital Gains Taxation Qualified Dividend Tax Rate by Taxable Income Here’s what the qualified dividend tax rate looks like for the 2026 tax year.3 Source: Internal Revenue Service, Revenue Procedure 2025-32. See our guide to the 2026 capital gains tax brackets. That 0% bracket is a good thing. If you have taxable income under that threshold, you don’t pay any federal tax on qualified dividends. And that’s a big difference from non-qualified dividends, which get taxed at 10%, 12% or even higher. You can save yourself a pretty penny by taking advantage of that lower rate. Not all funds are created equal. You can get two different funds paying the same amount of dividends per share, and have completely different outcomes on your tax return because one qualifies and the other doesn’t. To see previous qualified dividend income percentages for select investments, each brokerage differs on how they display the data. Vanguard and Charles Schwab make it super easy through direct pages, where other like State Street you have to manually check their tax reports to calculate the percentage. The Net Investment Income Tax (NIIT) If you’re a high-income investor, you may have to pay an extra 3.8% on top of your taxes because of the net investment income tax (NIIT). This kicks in for individuals whose modified adjusted gross income is over $200,000 if they’re single, or $250,000 if they’re married and filing jointly.4  This applies to both qualified and ordinary dividends. For high earners receiving qualified dividends, it’s not as simple as just paying 20% – the NIIT factored in can bring that rate up to 23.8%. For ordinary dividends at the 37% top bracket, the effective tax liability blows up to 40.8%. The difference in treatment between qualified and ordinary dividends doesn’t get any smaller for high earners. If you’re just knocking on the doors of those tax thresholds, then how you go about placing your dividend-paying investments across different account types becomes

Roth IRA Income and Contribution Limits for 2026

Senior couple holding an envelope of money, representing Roth IRA contribution limits and income limits

The Roth IRA is one of the most popular retirement accounts because qualified withdrawals in retirement are completely tax-free. However, eligibility to contribute depends on your modified adjusted gross income (MAGI) and tax filing status. Here are the Roth IRA income limits and contribution rules for 2026. Roth IRA Income and Contribution Limits for 2026 For 2026, Roth IRA contribution limits allow individuals to contribute up to $7,500 per year, or $8,600 for those age 50 and older, which includes a $1,100 catch-up contribution. Eligibility to make a full or partial contribution depends on your Modified Adjusted Gross Income (MAGI), which is essentially your total income with certain deductions added back. 2026 Contribution Limits by Filing Status Filing status Modified adjusted gross income (MAGI) Contribution limit (if under age 50) Contribution limit (if age 50 or older) Single individuals < $153,000 $7,500 $8,600 $153,000 – $168,000 Reduced contribution Reduced contribution ≥ $168,000 Not eligible Not eligible Married (filing joint returns) < $242,000 $7,500 $8,600 $242,000 – $252,000 Reduced contribution Reduced contribution ≥ $252,000 Not eligible Not eligible Married (filing separately) < $10,000 Reduced contribution Reduced contribution ≥ $10,000 Not eligible Not eligible Internal Revenue Service. 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500. You can contribute up to 100% of your earned income, as long as it does not exceed the annual limit. Contributions for a given tax year must be made by the tax year deadline, which is typically April 15 of the following year, and the total contribution limit applies to all of your traditional and Roth IRA accounts combined for that year. Comparison to 2025 Limits Roth IRA limits generally increase slightly over time to keep pace with inflation. For comparison, in 2025, the maximum contribution was $7,000 per year, or $8,000 for those age 50 and older. Year Age Category Standard Contribution Limit Catch-Up Contribution Limit Total Contribution Limit 2025 Under 50 $7,000 N/A $7,000 2025 50 and older $7,000 $1,000 $8,000 2026 Under 50 $7,500 N/A $7,500 2026 50 and older $7,500 $1,100 $8,600 Internal Revenue Service. Retirement Topics – IRA Contribution Limits . These rules, set by the Internal Revenue Service (IRS), ensure that Roth IRAs remain a powerful tool for building tax-free retirement savings while adjusting to changing income levels and inflation. Catch-Up Contributions for Ages 50+ In addition to the standard contribution limits, Roth IRAs allow catch-up contributions for individuals age 50 and older.  This provision is designed to help those closer to retirement accelerate their savings. For 2026, eligible individuals can contribute an extra $1,100, raising their total annual contribution from $7,500 to $8,600.  The catch-up contribution applies to each individual meeting the age requirement, making it an important tool for boosting retirement savings in the final years before retirement. » Ready to invest for retirement? Check out our review on the top IRA accounts Excess Contributions Excess Roth IRA contributions occur when you contribute more than the allowable limit in a given tax year. If you exceed the Roth IRA contribution limit, the IRS applies a 6% penalty on the excess amount for every year it remains in the account. To avoid penalties, you can: Withdraw the excess contribution and any earnings before filing your tax return. Apply the excess contribution to the next tax year, if eligible. High-Income Earners If your income exceeds the Roth IRA limits, you cannot contribute directly, but you can still access its tax-free growth through a Backdoor Roth IRA. This strategy works in two steps: Contribute to a traditional IRA. Convert those funds to a Roth IRA. By using this approach, high-income earners can still benefit from tax-free withdrawals in retirement. Always consult a financial professional before taking action to ensure this strategy fits your situation. » Stay ahead of your finances: Join our free newsletters today Bottom Line Roth IRAs remain one of the most powerful tools for retirement planning.  For 2026, single filers earning less than $153,000 and married couples filing jointly earning less than $242,000 can make the full contribution. If your income falls within the phaseout range or exceeds the limits, there are still strategies available to help you take advantage of tax-free retirement growth.

Roth IRA vs Traditional IRA: Which Should You Choose?

Wooden figures of a man and woman on a balance scale, representing the choice between a Roth IRA and a traditional IRA

What Are Roth and Traditional IRAs? The Roth IRA and Traditional IRA are two types of individual retirement accounts (IRAs), meaning they both offer some really useful tax advantages to help you build up your wealth over time. Whether you want to stick with index funds or try your hand at day trading, both accounts let you do that. If you need some help picking an account to start with, InvestLane’s guide to the best IRA accounts is a great place to start. It compares the top options as of 2026. How IRAs Handle Taxes When it comes to the Roth IRA vs Traditional IRA debate, it really comes down to one question: when do you pay taxes? With a Traditional IRA, you put in pre-tax dollars, which means you get a tax break now in the form of a deduction. But every dollar you withdraw in retirement is taxed as ordinary income. With a Roth IRA, things work the other way around. You put in after-tax dollars, so there’s no upfront tax break. But the money grows tax free, and if you follow the rules you can take out the money in retirement without paying any income tax at all. You’ve already paid income taxes on that money going in, so that’s it. Pay taxes now or pay taxes later? With a Traditional IRA, you pay taxes on the back end when you withdraw money in retirement. With a Roth IRA, you pay income taxes upfront and let the money grow tax free from there on. But the best answer for you isn’t so simple. Roth vs. Traditional IRA: Key Similarities It’s worth noting that both accounts share some important ground. Both require earned income to contribute, which means wages, salaries, tips, or other types of compensation. Both accounts also offer a spousal IRA option, and you can put money into either one even if you’re also signed up for a workplace retirement plan. One useful thing to know is that you can contribute to a prior year’s IRA up until the following year’s April 15th. So if you missed a 2025 contribution, you can still make it as late as next April. Inside both accounts, the money grows tax-deferred, which means you don’t pay taxes on dividends, interest, or capital gains while the money is sitting in the account. That tax-deferred compounding over the long term is one of the most powerful wealth-building tools out there, and it’s one thing that traditional and Roth IRAs share equally. » Stay ahead of your finances: Join our free newsletters today 2026 Contribution Limits As of 2026, the IRS has raised the annual IRA contribution limit to $7,500, up from $7,000 in 2025.1 For anyone 50 or older, the catch-up amount is now $1,100, which means you can put in a total of $8,600. These IRS limits apply across all your IRA accounts, so if you contribute to both a Roth and a Traditional IRA, the total between them can’t exceed $7,500. You can’t contribute more than you earn in a year, either. Also worth mentioning; there is no minimum amount required to open an IRA. Some investors use this to their advantage by contributing to both a Roth and a Traditional IRA in the same year, which can help spread out your tax exposure over time. How Roth and Traditional IRAs Differ Tax Treatment: Now vs. Later The real heart of the Roth IRA vs Traditional IRA debate is tax timing. When you contribute to a Traditional IRA, those deductible contributions reduce your taxable income in the year you make them. That’s a solid immediate tax benefit, and for people in a higher tax bracket, it can be a meaningful tax break. Pre-tax money goes in, grows inside the account tax-deferred, but when you tap into that cash in retirement, you pay ordinary income tax on every single dollar. With a Roth IRA, you do not get a tax deduction when you make your contributions. After the account has been open at least five years and you’re 59.5 or older, you get to make tax free withdrawals on everything inside. A 25-year-old putting in $7,500 a year at a 10% growth rate could end up with well over $3 million by retirement, all of it completely tax free. With a Traditional IRA, income taxes apply to every withdrawal. TIP: InvestLane’s guide to index funds for retirement covers how to line up your IRA investments with your age and goals. Tax Deductibility: Who Gets the Break Right Now? Traditional IRA contributions may be tax deductible, but tax deductible contributions aren’t a guarantee for everyone. Income tax deductibility depends on your income, your tax filing status, and whether you have a retirement plan at work.2  For 2026, single filers with a retirement plan at work see the deduction phase out between $81,000 and $91,000 in adjusted gross income. Married couples filing a joint tax return with a plan at work face a phase-out from $129,000 to $149,000. 2026 IRA deduction limit — When covered by a retirement plan at work Filing status Modified adjusted gross income (MAGI) Deduction limit Single individuals ≤ $81,000 Full deduction up to the amount of your contribution limit > $81,000 but < $91,000 Partial deduction ≥ $91,000 No deduction Married (filing joint returns) ≤ $129,000 Full deduction up to the amount of your contribution limit > $129,000 but < $149,000 Partial deduction ≥ $149,000 No deduction Married (filing separately) < $10,000 Partial deduction ≥ $10,000 No deduction Source: IRS: 401(k) & IRA Limits for 2026, published November 13, 2025. Roth IRA contributions are never tax deductible. You always use after-tax dollars. But the payoff is that contributions grow tax free and qualified withdrawals come out completely tax free in retirement, which most long-term investors consider the better deal. Early Withdrawal Rules With a Roth IRA, you can pull out your original contributions at any time, tax-free and penalty-free. That flexibility is one of the Roth IRA’s

If You Only Buy 1 ETF in 2026, Buy This

Creative saving and investing concept, representing choosing the one best ETF to buy for a simple one-fund portfolio

Investing has never been easier to get into. And the truth is, most people who read this could probably do pretty well by just buying one ETF and treating it like a regular bill they pay each month… no fuss, no muss. The U.S. ETF market has gone mainstream. Just last year, ETF assets crossed the $10 trillion mark, and new issuance was a record $1.1 trillion.1 That’s a big deal. And right in the middle of all that movement is the Vanguard Total Stock Market ETF (VTI). It may not be flashy, but for long-term investors who want to own the whole US market at a low cost, the numbers just make sense. » Start investing today: Explore top brokerage accounts with our detailed review What Is VTI? VTI is built to track the CRSP U.S. Total Market Index, an index that represents approximately the full investable U.S. stock market. That means buying VTI is buying a small piece of nearly every publicly traded U.S. company, all within one purchase. The share price reflects the weighted value of all 3,512 holdings throughout the trading day. The fund launched in May 2001 and is now one of the largest exchange-traded funds in the world. It trades on the New York Stock Exchange Arca, which means ETF shares are bought and sold throughout the trading day on the secondary market, just like any individual stock. The expense ratio is a low 0.03%, calculated annually, working out to $3 per year on every $10,000 invested. That cost comes out of the fund automatically and is never paid separately. Key Characteristics VTI ETF Underlying Index CRSP U.S. Total Market Index Inception Date May 24, 2001 Total Assets (AUM) $581B Expense Ratio 0.03% Holdings 3,512 Top 10 Holdings (%) 33.69% Dividend Yield (TTM) 1.12% Qualified Dividends (2025) 93.58% Dividend Frequency Quarterly Past Year (as of 1/31/2026) 15.44% Past 3-Year Avg. 20.18% Past 5-Year Avg. 13.52% Past 10-Year Avg. 15.11% S&P 500 Overlap by Weight 88% VTI isn’t a diversified fund under the law, meaning it can hold big chunks of the biggest companies. But in practice, the CRSP index covers the whole stock market, from the smallest to the largest. VTI’s holdings total 3,512 with the top 10 making up 33.69%. Dividends are paid quarterly with a yield of 1.12%, 93.58% of which can be considered qualified if held long enough.2  As of January 31, 2026, VTI has returned 15.44% over the past year, 20.18% over three years, 13.52% over five years, and 15.11% over the decade. Keep in mind that all this past performance is no guarantee of future results, but VTI’s track record is definitely among the best for its type. The price of your VTI shares will go up and down with the price of the underlying holdings as the market sees fit. VTI carries an 88% overlap by weight with the S&P 500 and is correlated at 1.00 with it. Anyone investing in both should be aware that they’re essentially duplicating the same exposure, and that’s not really a good use of their money. » Want to research further on your own? Explore our top financial tools and resources now Why VTI Beats Other ETFs The Total Market Case for VTI Rather than trying to pick winning stocks or time the market, VTI holds a broadly diversified collection of securities and approximates the full index of the U.S. stock market. The fund holds a broadly diversified collection of companies across all size categories, and the indexing investment approach it utilizes is designed to track the investment return of the index before fees.3 This structure cuts the risk of any one company cratering a portfolio. It delivers the full U.S. return, not just a slice of it. Smaller companies get representation alongside the biggest names, something other ETFs built only on large caps simply cannot offer. With a significant number of holdings and a share price accessible to nearly any buyer, VTI is built for broad, long-term ownership. A 0.03% Expense Ratio: The Cost Advantage VTI’s 0.03% expense ratio is close to the lowest in the market. Now that might not sound like a lot at first, but trust me, over a long period of time, the difference between a 1% management fee and 0.03% is huge. Someone paying 1% every year would be giving up at least tens of thousands of dollars in compounded gains, compared to VTI. And that’s just the beginning, the savings just keep on growing year after year, and that’s all money that stays in your pocket. Total Assets, Performance, and Why It Matters With a whopping $581 billion in assets, VTI is one of the most widely used ETFs out there. And that’s important for a number of reasons – it means fees are kept low, there’s plenty to sell and buy, and you know the fund isn’t going anywhere anytime soon. VTI has averaged 15.11% a year over the last decade, which is pretty close to the S&P 500‘s 10% a year over the same time.4 And since they’re correlated at 1.00, VTI should be giving you pretty much the same long-term results as the S&P 500. If someone saving $500 a month in a Roth IRA gets that 10% a year over 35 years, they end up with around $1.9 million in their retirement account – all completely tax-free. That’s just one reason why long-term investors keep coming back to index funds. » Ready to invest for retirement? Check out our review on the top IRA accounts How ETF Shares Track the Market Index funds are a type of investment that follow a super passive approach to just match the return of a particular market index, and usually at a lower cost than an actively managed fund. No manager is trying to pick the winning stocks, no team is trying to time the market, and no extra fees are being charged for the fancy decisions. They just keep using the same indexing approach

The Simplest 3-Fund Portfolio That Covers the Entire Market

Finance managers in a meeting discussing growth, representing the simple three-fund portfolio that covers the entire stock and bond market

Most investors assume building a solid portfolio requires a long list of funds, picking individual stocks, and constant monitoring. But with just three exchange traded funds (ETFs), you can have instant exposure to the majority of the world’s publicly traded companies across the U.S. stock market, international markets, and the bond market, all in one low-cost setup. These three ETFs are among the most popular ETFs available, and each one holds hundreds to thousands of individual stocks or bonds in a single purchase. For long term investors who want broad exposure to multiple assets across different asset classes without the hassle of frequent trading, a portfolio like this is about as simple as it gets. If you want a full breakdown of how to build this portfolio from scratch, grab the free 3-Fund Portfolio Guide here. Otherwise, here’s how each fund works.   VTI: Best ETFs to Invest In for U.S. Stock Exposure The first ETF in this portfolio is the Vanguard Total Stock Market ETF, ticker VTI. This fund tracks the CRSP U.S. Total Market Index, giving investors exposure to large, mid, small, and micro-cap U.S. stocks across the entire U.S. stock market. When you buy VTI, you’re effectively buying a small piece of the U.S. economy.1 Exchange Traded Funds: VTI at a Glance VTI officially launched in May 2001 and currently holds 3,511 stocks. The top ten holdings include names you’ve probably heard of, like Nvidia, Apple, and Microsoft, with each making up roughly 5 to nearly 7% of the fund. Combined, those top ten holdings account for about 34.5% of total assets, and technology is the largest sector at close to 31% of the fund’s weight. Metric (as of 2/9/26) VTI Index Tracked CRSP U.S. Total Market Index Total Holdings 3,511 Expense Ratio 0.03% Dividend Yield (TTM) 1.12% Assets Under Management ~$585B (#4) Inception Date May 2001 Top 10 Holdings Weight ~34.5% Expense Ratio and Cost The expense ratio for VTI is a mere 0.03%, which works out to just $3 per year for every $10,000 invested, how is that for a bargain?! That cost is automatically deducted from the fund’s value over time, so you don’t have to pay anything out of pocket. For long term investors looking to keep low expense ratios at the core of their strategy, this is one of the most low cost ETF options for broad stock market investing. That low cost advantage compounds significantly over time compared to actively managed funds that charge a lot more. Dividends and Tax Efficiency The dividend yield over the past twelve months came to 1.12%, paid out on a quarterly basis. Of those dividends, close to 94% have the potential to be considered qualified dividends, meaning they’d be taxed at the more favorable long-term capital gains rate of 0%, 15%, or 20% depending on income.2 To qualify for that favorable tax treatment, the investment must be held for at least 61 days during the 121-day window that begins 60 days before the ex-dividend date. This is a meaningful tax advantage. Unlike many dividend equity ETF options that generate mostly non-qualified income, VTI’s structure makes it a naturally tax-efficient index fund for taxable accounts.   Long Term ETF Performance VTI has delivered attractive returns for long term investors. Over the past year it’s grown 17.14%, the three-year average sits at 22.25%, the five-year average is roughly 13%, and the ten-year average annual return is 13.07%. To put that in perspective, a $100,000 investment with $500 added every month since the start of 2016 would have grown to roughly $459,000 today. That kind of result is why VTI consistently ranks among the best long term ETFs for buy-and-hold investing. Compared to picking individual stocks, a broad index fund like VTI spreads investments across thousands of stocks in a single low cost ETF, which significantly reduces concentration risk. For investors building a long term portfolio, it’s one of the most efficient ETF investments available. VTI has an 88% overlap with the S&P 500, and over a fifteen-year period the correlation between the two is essentially 1. Since 1957, the S&P 500 has averaged just over 10% per year, giving long term investors plenty of historical data to feel confident about the growth potential of a fund like this built around U.S. stocks. Deciding between VTI and VOO? See: VOO vs VTI: Which Vanguard ETF Should You Choose? VXUS: International ETFs for Global Diversification The second fund you need to consider is the Vanguard Total International Stock ETF, ticker VXUS. This one tracks the FTSE Global All Cap ex-U.S. Index, allowing investors to gain diversified exposure to developed and emerging markets outside the United States.3 Where VTI covers U.S. stocks, VXUS covers everywhere else. Emerging Markets and International Diversification VXUS launched in January 2011 and currently holds 8,691 stocks. The top ten holdings, which include Taiwan Semiconductor, Tencent, and ASML, make up only about 11.3% of the entire fund. That’s a significant portion less concentrated than VTI’s top ten at 34.5%, showing just how spread out the international exposure really is. Financials is the largest sector at roughly 21.3%, and the top country allocations are Japan at 15%, the United Kingdom at 9%, China at 8.6%, and Canada at 8.1%. Metric (as of 2/9/26) VXUS Index Tracked FTSE Global All Cap ex-U.S. Total Holdings 8,691 Expense Ratio 0.05% Dividend Yield (TTM) 2.91% Assets Under Management ~$133B Inception Date January 2011 Top 10 Holdings Weight ~11.3% » Want to see more data? Compare top index funds through our free cheatsheet Low Expense Ratios and Currency Risk The expense ratio on VXUS is 0.05%, still solidly in the low cost ETF range. The dividend yield over the past twelve months came in around 2.91%, noticeably higher than VTI. However, only about 58.5% of those dividends have the potential to be qualified, making VXUS less tax efficient than its U.S. counterpart. One thing to keep in mind: currency risk is a real factor with VXUS. Exchange rate fluctuations can affect returns

The Best Lazy ETF Portfolio for 2026: Just 5 Funds

Businessman working at home, representing a simple, hands-off lazy ETF portfolio that needs little maintenance

Why These Five ETFs Are Enough Many investors end up with too many funds. They fall into the trap of buying what’s popular and often creating unnecessary overlap and extra fees. The truth is, a well-chosen set of five ETFs can give you the same diversification as a much larger portfolio, but with less hassle and lower costs. The idea here is to build a foundation that works whether you’re 25 or 55, whether you want aggressive long-term growth or a steady source of income from dividend ETFs. Exchange-traded funds give you the ability to own fractions of thousands of publicly traded companies with a single purchase, and the right five funds give you complete market coverage at low cost. If you’re new to ETFs or just want to simplify your approach, learning how to invest in ETFs can help you understand the basics of passive investments. The strategy here is simple though: pick the best ETFs that complement each other, avoid expensive overlaps, and let compound growth do the heavy lifting. Unlike active management approaches that try to buy stock based on predictions, these index fund options give you broad exposure to multiple assets across sectors and geographies. » Start investing today: Explore top brokerage accounts with our detailed review ETF Basics Exchange-traded funds trade on major exchanges like stocks, giving investors exposure to diversified portfolios of companies without having to buy individual positions. The best ETFs to invest in typically track an index, they also charge a minimal expense ratio, and hold hundreds or thousands of holdings to spread your risk across the market. Why Index Funds Beat Active Management Over time, most actively managed mutual funds do not outperform their benchmarks. Here is something you want to weigh carefully: The expense ratio on active management typically runs 10 to 20 times higher than passive investments like index funds, and that cost drag compounds into significant money over decades. If you are a long-term investor focused on building wealth through the stock market, low cost index funds give you broad exposure to growth without paying fund managers to make bets that rarely pan out. This is a practical, sensible choice. While real estate, commodities, and bonds can help diversify a portfolio, most investors will benefit from making equity ETFs the core of their investments. These 5 ETFs are easy to buy and sell through any brokerage account and offer the liquidity and flexibility most people need. » Want to see more? Compare top index funds through our free cheatsheet Your Core Foundation: Two ETFs Start with the basics. These two funds cover the entire US stock market and could honestly work well as a standalone portfolio for most long-term investors. Vanguard Total Stock Market ETF (VTI) Vanguard Total Stock Market ETF tracks every publicly traded company in the US across large-cap stocks, mid-caps, and small-caps. With $575 billion in total assets and 3,512 holdings, VTI provides exposure to the complete domestic market in a single fund.1 The expense ratio is just 0.03%, meaning you pay $3 annually for every $10,000 you invest. Over the past year, this index fund returned 15.44%, and its 10-year average comes in at 15.11% annually. These are attractive returns that beat most mutual fund alternatives. Here’s what makes VTI stand out among the best ETFs: it’s essentially the S&P 500 plus everything else. In fact, VOO vs. VTI shows an 88% overlap between the two funds, with VTI adding exposure to mid and small-cap companies that VOO excludes. If you want total market coverage without buying multiple funds, VTI delivers broad exposure across all sectors and market capitalizations. And if you’re comparing S&P 500 options specifically, check out our VOO ETF review for a more in-depth look at how the index works. For long-term investors, VTI serves as the core holding, the foundation everything else builds on. This index fund provides instant diversification across specific industries from tech sector giants to healthcare, financials, and consumer goods. » Ready to invest for retirement? Check out our review on the top IRA accounts Schwab US Large-Cap Growth ETF (SCHG) SCHG invests in large-cap stocks with a focus on growth. It holds fewer companies than VTI, but that means it leans toward businesses that put profits back into expansion instead of paying out dividends.2 The expense ratio matches is 0.04%, another great example of low cost ETF investing at its finest. Performance speaks for itself: SCHG returned 12.92% over the past year and has averaged 18.81% annually over the past decade, outpacing the S&P 500 by a meaningful margin. The low dividends and high potential in qualified dividends also make SCHG a very tax-efficient ETF to build wealth long term. Technology makes up nearly half the fund’s holdings, but SCHG isn’t a pure tech sector play. You’ll find growth stocks across sectors, from financials to healthcare. If you’re comparing growth options among the most popular ETFs, SCHG vs VUG vs QQQM breaks down the key differences. QQQ and VUG are both solid alternatives, and our QQQ vs QQQM comparison can help if you’re leaning toward Nasdaq-focused funds. » Stay ahead of your finances: Join our newsletters today The Momentum Edge. Top Performers Momentum investing sounds complicated, but it’s really not. These funds buy stocks that are already winning, and if we look at past performance data, it shows they keep winning. Invesco S&P 500 Momentum ETF (SPMO) SPMO invests in 100 of the S&P 500 companies with the highest momentum, meaning those with strong recent performance after accounting for volatility. The fund updates its holdings twice a year to keep the strongest stocks and remove those that have lost momentum. With $13 billion in total assets and a 0.13% expense ratio, SPMO costs slightly more than core index funds but delivers results that justify the fee. Over the past year, SPMO returned 20.72%. This is significantly ahead of the S&P 500 average. The 10-year average sits at 18.53%, making it one of the top-performing ETFs

Robinhood Review 2026: Pros, Cons & The Real Verdict

Business team discussing investment and trading, representing a review of whether the Robinhood investing app is worth it

Robinhood launched in 2013 with one idea: make commission-free trading available to everyone. It worked. It worked so well in fact, that within a few years, major brokerages like Schwab and Fidelity had to drop their own trading fees just to keep up. That’s a legacy worth acknowledging. But a lot has happened since then. In 2025 and 2026, Robinhood has been shipping new products faster than most people realize. The platform that many beginner investors remember as a simple stock trading app is now trying to become a full financial super app with banking, a credit card, a robo-advisor, AI research tools, a desktop trading platform, and more. So whether you’re deciding where to open your first brokerage account, or wondering if Robinhood still makes sense as you get more serious about investing, here’s the full picture. » Get started today: Explore top brokerage accounts with our detailed review Pros & Cons Robinhood has come a long way from the bare bones trading app it started out as. The core strengths are hard to argue with on cost and accessibility, but there are some real gaps that you may consider important depending on what you need from a brokerage. Here’s the honest breakdown. InvestLane Rating for Robinhood: 4.6/5 Pros Cons No account minimum or account fees No mutual funds or fixed income securities Commission free trading on stocks, ETFs, options, crypto Customer support quality is inconsistent 3% IRA match with Robinhood Gold SEC and FINRA regulatory actions in 2025 Cortex AI research tools for Gold members No trust or small business account types Clean, fast mobile app Basic research tools on the free tier FDIC insured banking for Gold members Must hold IRA match for 5 years to keep it Fractional share trading from $1 Robinhood Strategies robo-advisor at low cost The Core Trading Platform Still One of the Best Mobile Apps Out There If you want to start investing without a steep learning curve, Robinhood is still one of the first names worth knowing. The mobile app is fast, clean, and genuinely easy to use. There’s no clutter, no confusing menus, and you can place a trade in just a few taps. Commission free trading covers stocks, ETFs, options, and cryptocurrency trading. There’s also no account minimum to open a Robinhood account, and fractional share trading starts at just $1, meaning you can buy a slice of companies like Apple or Nvidia without needing hundreds of dollars upfront. The stock screener includes 20-plus filters, including market cap, sector, analyst ratings, dividend yield, and implied volatility – solid tools for a free account. For beginner investors building their first diversified portfolio, this setup is hard to beat on cost alone. Equity trades and ETF trades both carry zero commission, and the Robinhood app makes the mechanics of buying and selling genuinely approachable. The trading platform has also matured. Robinhood now supports options trading, futures trading, margin trading, and even short selling (launched late 2025). These aren’t features most beginners will need on day one, but they will be helpful as your investing strategies grow over time. Robinhood Gold The Bundle That Changes the Math This is one area that surprises most people. Robinhood Gold is a subscription that costs $5 per month, or $50 per year. But it gets you a bundle of features that are hard to find anywhere else at that price, so it’s worth skipping that morning fancy coffee once a month to have this tool! Here’s what Robinhood Gold members get: 3% IRA match on annual contributions (non-Gold members get 1%). Cortex Digests – AI-powered summaries that pull from breaking news, analyst reports and real-time market data to explain what’s moving your portfolio or a specific stock. Morningstar premium research reports – full in-depth stock analysis, directly in the app. Competitve APY on uninvested cash with no cap and no minimum. Gold Card – a credit card earning 3% to 5% cash back on all categories, with over 600,000 active users. Robinhood Banking – FDIC insured checking and savings, now rolling out to Gold subscribers. The IRA match math alone makes a compelling case. The 2025 IRA contribution limit was $7,000 for those under 50, meaning Robinhood Gold members earned $210 automatically at the 3% rate. The 2026 limit has increased to $7,500, making the max match $225. Either way, that match doesn’t count toward your annual contribution limit. Subtract the $50 annual Gold fee, and you’re netting $160 to $175 in free money just for using the account. Even a $2,000 contribution at 3% earns $60 – enough to offset the Gold subscription entirely. The interest on uninvested cash is also worth noting that they consistently offer competitive rates similar to most high-yield savings accounts without needing to move money between platforms. Truth be told, Robinhood Gold is worth it for almost anyone contributing regularly to a retirement account. The numbers just work.1 Robinhood Strategies The Robo-Advisor That’s Actually Growing Robinhood Strategies is the platform’s robo-advisor, and it has grown faster than most people expected. It now manages over $1.3 billion in assets across more than 200,000 funded customers. These are real numbers that show retail investors are in fact trusting it with their money.2 You only need $50 to open access. The annual fee is 0.25%, capped at $250 per year for Robinhood Gold members, which means you never pay more to invest more. For accounts under $500, the portfolios use index funds and exchange traded funds. Above that threshold, it adds individual stocks alongside ETFs for a more customized mix. Auto-rebalancing and tax-loss harvesting on taxable accounts are both included. These are features you’d normally pay much more for through other brokerages. For anyone looking at robo-advisors as a way to put investing on autopilot, Robinhood Strategies is a legitimate option, especially when combined with the Gold IRA match. One important note: Contributions into IRAs managed by Robinhood Strategies don’t qualify for the IRA match. So if the IRA match matters to

Trying to Time the Market Could Cost You Thousands

Abstract clocks over a city skyline with business charts, representing the risks and costs of trying to time the stock market

You may be tempted to try an investing strategy that, on the surface, seems like it makes a lot of sense: Time The Market. But markets keep hitting all-time highs, so waiting for a dip often just means missing out on gains. You might be sitting on cash wondering if now is the right time to invest. That anxiety about buying at a market high? It’s completely normal. Now, let’s look at what actual numbers tell us about timing the market. Research from the Center for Financial Research at Charles Schwab studied what happens when five investors take completely different approaches to timing the stock market. The results show that just staying invested is far more important to your results than when you invest. » Start investing today: Explore top brokerage accounts with our detailed review The Five Approaches (20-Year Study) Schwab researchers created a simple and easy to test experiment. They took five hypothetical investors, each of them receiving $2,000 at the beginning of every year for 20 years, from 2005 through 2024.1 Each of them putting their money into the S&P 500, except for one who stayed entirely in treasury bills. Let’s look at what the results showed. The Five Approaches Peter Perfect timed the market perfectly, investing on the single lowest market day each year. On April 4, 2005, he bought at the bottom. On June 13, 2006, he did the same thing. Twenty years of impossible perfect timing. This is of course practically impossible to pull off since we can’t predict the future. Ashley Action invested right away on the first trading day of each year. She did no analysis, she didn’t wait, she just got in the game. Matthew Monthly used dollar-cost averaging. He split his $2,000 into 12 equal monthly investments of about $167 each. It’s similar to when you contribute to a 401(k) through payroll deductions.   Rosie Rotten had the worst possible timing. Every single year, she invested her money at the market’s peak. Larry Linger kept all his money in treasury bills, he kept waiting for that perfect moment that never came. » Looking for a guaranteed income? Check out today’s top CD rates The Results: Immediately Investing Pays Off After 20 years, Peter Perfect would have accumulated $186,077. But Ashley Action would come in second with $170,555—only $15,522 less despite never attempting to time the market. Matthew Monthly would have earned $166,591 through his monthly approach. Even Rosie Rotten, who invested at the absolute worst time every year, would end up with $151,343. Larry Linger finished last with just $47,357. The difference between perfect timing and just investing immediately? Only about $15,000 over 20 years. And staying invested in stocks, even with terrible timing, absolutely crushed it compared to sitting on cash by more than triple. » Stay ahead of your finances: Join our newsletters today What the Data Tells Us About Market Timing Markets Rise Most of the Time First and foremost, markets rise in 75.6% of typical 12-month periods. Since 1957, the S&P 500 has actually averaged returns of more than 10% annually.2 Having said that, past performance doesn’t guarantee future results. But waiting on the sidelines typically means fighting the odds, and given the experiments’ results? We can see that doesn’t work too well. Consistency Across Time Periods Schwab researchers also tested 80 rolling 20-year periods going back to 1926. What they found out was; in 70 of those 80 periods, the ranking stayed exactly the same. Even more, in the remaining 10 periods, immediate investing never finished last.  The Cost of Missing Best Days This is where a market timing strategy gets dangerous for you. If you miss just 10 of the best days in the market over a 30-year period, your returns get cut in half.3 Miss 30 best days and your returns drop by 82%. I think we can all agree; that’s a very significant difference.  Think about that. Ten days out of roughly 7,500 trading days cut returns in half. When you try timing the market by moving to cash during scary periods, you risk being out on those critical days when gains happen fast. Best Days Happen in Bear Markets Here’s the cruel irony of market timing. About 78% of the stock market’s best days occurred during bear markets or during the first two months of a bull market. Only about one in five of the market’s best days happened during calm investing conditions. Fear causes selling during declining markets, which means many investors are out precisely when the biggest rebounds happen. This is why having an emergency fund matters. Three to six months of expenses in a high-yield savings account prevents forced selling during downturns. Individual Stock Risk Some investors try timing the market with a particular security. Research going back to 1927 shows that only 21% of individual stocks survive and outperform over 20-year periods. More than half of all stocks get delisted entirely.  ETFs and mutual funds eliminate single-stock risk by spreading investments across hundreds of companies. When one company fails, it barely registers in a diversified portfolio. Four Practical Investing Strategies Invest Immediately When Possible Time in the market beats timing the market. Ashley Action’s approach of investing immediately came within a small margin of perfect timing. If you have money intended for long-term investing, getting it into the market matters more than finding the perfect moment. Cash and low-return investments consistently perform worse over a long period. Use Dollar-Cost Averaging for Lump Sums Not everyone feels comfortable investing a large lump sum at once. Matthew Monthly’s approach works nearly as well as immediate investing. By spreading purchases across regular intervals, you remove emotion from investment decisions. If you’re nervous about market movements or have a windfall, splitting it into monthly investments over 6-12 months is reasonable. Many investors already do this through 401(k) contributions without realizing it. Every paycheck, money goes into your portfolio automatically. Focus on Broad Index Funds Your asset allocation across different asset classes matters far more

IDMO: The #1 International ETF for Growth

Close-up side view of a laptop showing a financial chart, representing analysis of the IDMO international momentum ETF

Why International Growth is Important Many investors want international exposure, but broad funds often mix strong and weak stocks. IDMO does things differently by allocating more money to the stocks with the strongest momentum in developed markets outside the U.S. The growth gap: Most international funds like VEA or IEFA returned about 55% over the past five years, while IDMO delivered 104.5% in the same period.1 This difference can really add up over time. What you might not notice: Traditional international funds pick stocks by company size, so a struggling bank gets the same weight as a successful business. IDMO instead focuses on stocks with strong recent momentum, and this method so far has worked well. » Start investing today: Explore top brokerage accounts with our detailed review What is IDMO? The Invesco S&P International Developed Momentum ETF (IDMO) officially launched on Feb 24, 2012 and right now manages about $3 billion in total assets. The fund trades at around $58 per share and has about 14 years of performance data. This exchange-traded fund is in the foreign large blend category and follows an index built to capture momentum in developed markets. How the Strategy Works IDMO tracks the S&P World ex U.S. Momentum Index, which uses a set of rules to select stocks.2 Here’s what that involves: Screens large and mid cap stocks from developed markets (Japan, UK, Canada, Europe, Australia). Ranks companies based on the past 12-month performance, excluding the most recent month. Stocks selected by price momentum and weighted by momentum scaled by market cap. The underlying index rebalances each quarter to capture changing market trends. The momentum index focuses on developed markets excluding the US and focuses on companies with steady, strong price gains. The Growth Trade-Off IDMO’s 0.25% expense ratio costs more than the 0.03-0.07% charged by most broad international funds. For example, on a $10,000 investment, you’d pay $25 per year instead of $3-7. However, the fund’s higher returns have more than made up for this extra cost in the past. Proven Momentum Performance Recent Investment Returns Timeframe (as of 12/31/25) Average Annual Returns (IDMO) Past Year 42.14% Past 3 Year Avg. 24.46% Past 5 Year Avg. 14.14% Past 10 Year Avg. 12.01% Source: Performance data quoted as of December 31, 2025. Current performance may differ from these data ranges. Comparing IDMO to the Foreign Large Blend Category IDMO’s five-year total return of 104.5% is much higher than the foreign large blend category average of 55.4%, showing that the momentum strategy has worked well in developed markets outside the US.3 The fund’s past performance reflects its focus on international stocks that have strong price momentum. Your principal value and investment returns will vary based on market volatility, and the original cost may differ from current performance. What Drives Investment Returns IDMO’s sector shifts change with market conditions based on the underlying index methodology. The fund holds currently 182 international stocks selected by price momentum signals. The S&P World Ex U.S. Momentum Index rebalances every quarter, opening the opportunity for the ETF to add sectors showing momentum and reduce those that are lagging. The trailing dividend yield over the past twelve months was 3.59%. Understanding Market Volatility You may want to keep in mind that higher investment returns usually come with higher market volatility. IDMO can lag for years when momentum reverses. If we look at its 105% annual turnover, we can see how actively the fund rebalances to follow momentum signals. Growth investors who use momentum strategies accept this volatility for the chance of better long-term returns. Holdings & Growth Exposure Key Holdings From the S&P World ex U.S. Momentum Index The fund currently holds 182 international stocks but concentrates in proven winners, these are the current top 10: HSBC Holdings PLC (3.5%) – Global banking leader Rolls Royce Holdings PLC (3.4%) – Aerospace recovery play Banco Santander SA (3.0%) – European banking franchise Allianz SE (2.8%) – Insurance and asset management Siemens Energy AG (2.6%) – Renewable infrastructure Shopify Inc (2.6%) – E-commerce platform British American Tobacco (2.3%) – Consumer defensive Rheinmetall AG (2.3%) – European defense contractor UniCredit SpA (2.3%) – Italian banking Commonwealth Bank of Australia (2.2%) – Australian financial services These companies make up 27% of the fund’s total assets. This concentration can boost investment returns if the stocks keep doing well. The index provider complies with required rules for position limits. ETF Name Invesco S&P International Developed Momentum ETF (IDMO) Underlying Index S&P World Ex-U.S. Momentum Index Inception Date 2/24/2012 Net Assets $3B Expense Ratio 0.25% Holdings 182 Top Ten Holdings % 27.13% Technology Exposure (%) 3.68% Largest Country (By Weight) Canada (18.91%) Dividend Yield (TTM) 3.59% Qualified Dividends (%) 28.8% (2025) Dividend Frequency Quarterly Source: Performance data updated on January 26, 2026. Current metrics may differ from these data ranges. Geographic Exposure Major allocations are spread across developed markets excluding the US: Europe at 59.6% combined (39.5% Eurozone, 16.7% UK, 3.4% Europe Ex-Euro), Canada at 19.0%, Japan at 5.5%, and Australasia at 4.6%. This mix gives you access to international stocks in several developed markets, while at the same time avoiding the risks inherent in emerging markets. How Sector Rotation Works Unlike regular index funds, IDMO’s sector weights change every quarter based on momentum signals. The index finds which stocks in developed markets have the strongest price momentum, then gives them more weight based on their size. When momentum in a sector fades, the index provider complies with mandated procedures to reduce exposure during the next rebalancing. » Want to compare with other top international ETFs? View our free index fund cheatsheet Using IDMO for Growth The Satellite Approach IDMO may be used as a growth addition to your main international holdings, not as your only fund. Investors may use it to complement broader international funds or even just U.S. based equities. A simple start portfolio suggested by Warren Buffett contains 90% into the S&P 500 through his 2-fund portfolio approach. By adding IDMO to your broader investments,

6 Best International ETFs Every Investor Must Know in 2026

Globe hologram with money signs and a candlestick chart, representing the best international ETFs for investing outside the US

Whether you’re just getting started with ETFs or looking to go beyond U.S. stocks, international ETFs let you invest in up to thousands of companies across dozens of countries all within one purchase. In fact, all of the international ETFs we are covering gained over 30% in the past year while the S&P 500 returned around 17%. International investing helps build portfolios that can weather different economic conditions. When U.S. markets struggle, developed markets and emerging markets may often follow different paths, reducing overall volatility. We’re covering six top international ETFs. By the end you’ll know which ones are right for your portfolio and why some crushed it over the past decade. » Start investing today: Explore top brokerage accounts with our detailed review Top International ETFs: Quick Comparison The Core International Holdings These first three ETFs are your foundation for international exposure. They’re designed for long-term investors who want broad diversification at rock-bottom costs. When you buy ETF shares, you own a diversified basket of international companies. 1. Vanguard FTSE Developed Markets ETF (VEA) Vanguard’s ETF with the ticker symbol of VEA tracks the FTSE Developed All Cap ex U.S. Index, covering large, mid, and small-cap companies across Canada, Europe, and the Pacific region.1 Created in July 2007, it has grown to $202 billion in assets, making it the sixth largest ETF in the market. The fund holds 3,853 companies. The top 10 make up just 10% of the fund, with companies like Samsung and Nestle leading. Technology represents 11.61% of holdings, and Japan is the largest country at 21%. VEA has paid a 3.05% dividend yield over the trailing twelve months (TTM), with 66% qualifying for long-term capital gains as of 2025 for those that meet the 60 day holding rule. The 0.03% expense ratio means you pay $3 annually per $10,000 invested. Over the past year, VEA grew 35%, outpacing the S&P 500’s 17.82%. Longer-term returns show three-year average of 18.04%, five-year average of 9.21%, and 10-year average of 8.75% annually. Historically, over the long term, the U.S. economy has proven to be a superior investment, which is why legendary investors like Warren Buffett recommend it as the majority of nearly any investment portfolio. 2. iShares Core MSCI EAFE ETF (IEFA) IEFA tracks the MSCI EAFE IMI Index, covering developed market equities.2 The key difference? IEFA excludes both the U.S. and Canada, plus China. This matters when building portfolios across different fund families. BlackRock launched IEFA in October 2012 with $169 billion in assets, making it the eighth largest ETF. With 2,591 holdings, the top 10 companies make up 11%, and technology sits at 9%. Japan dominates at 24% of the portfolio. The 3.40% dividend yield pays semiannually, with 84% qualifying for preferential tax treatment in 2024. At 0.07%, IEFA costs slightly more than VEA. Past year performance was 32%, three-year average hit 17.19%, five-year reached 8.79%, and 10-year averaged 8.29%. If you’re mixing funds from different providers and want to avoid Canada overlap, choosing IEFA over VEA would be the right move. » Want to see more ETFs all in one place? View our free index fund cheatsheet 3. Vanguard Total International Stock ETF (VXUS) VXUS has the broadest international exposure, tracking the FTSE Global All Cap ex US Index with developed and emerging  markets.3 That reach brings holdings to 8,646 companies. Launched in January 2011, the top 10 still only make up 10% despite the huge number of holdings. Technology makes up 15%, and Japan is at 15% country exposure. The 3.02% dividend yield (58.5% qualifying in 2025) is quarterly. The 0.05% expense ratio is in between VEA and IEFA. Performance is the same as IEFA at 32.35% for the past year, 17.26% three-year average, 8.07% five-year average and 8.54% over 10 years. Use VXUS for maximum international diversification in one fund. The emerging markets exposure adds growth but increases volatility.  » Ready to invest for retirement? Check out our review on the top IRA accounts Higher Growth Potential ETFs The next three international ETFs take different approaches to boost returns. They use strategies like momentum investing, low volatility screens and small-cap value tilts. These funds cost more but have delivered stronger historical performance. Investors can measure the effectiveness of these strategies using metrics like volatility, tracking error, and risk-adjusted returns. These ETFs may also involve more frequent trades and may be subject to certain limits on sector or country exposure as part of their strategy. 4. Invesco S&P International Developed Momentum ETF (IDMO) IDMO tracks the S&P World ex U.S. Momentum Index, selecting stocks based on trailing 12-month price momentum adjusted for volatility.4 Launched in February 2012, it has a full 10-year track record. With $3 billion in assets and 182 companies, the top 10 make up 27% of the fund. That concentration means more risk but stronger outperformance potential. Companies like Rolls-Royce and Shopify appear in top holdings. Technology represents just 4%, and Canada leads at 19%. The 3.59% dividend yield pays quarterly (28.8% qualifying in 2025). Remember, most international ETFs are not very tax-efficient investments, so understanding time and place like using them in tax-advantaged accounts is crucial to understand.  The 0.25% expense ratio is higher than core funds, but performance justifies the cost. Over the past year, IDMO grew 42.14%, highest on this list. Three-year average hit 24.46%, five-year reached 14.14%, and 10-year averaged 12.01% annually. That 10-year performance beat VEA by over 3 percentage points annually. A $10,000 investment 10 years ago would be worth roughly $31,000 in IDMO versus $23,000 in VEA. » Easily track your finances: Try the free Empower personal dashboard 5. Franklin International Low Volatility High Dividend Index ETF (LVHI) LVHI tracks the Franklin International Low Volatility High Dividend Hedged Index, selecting 50 to 150 securities based on high yields and low earnings volatility.5 The fund uses currency hedging to reduce exchange rate risk. Launched in July 2016, LVHI manages $4 billion with 186 holdings. The top 10 make up 22%. Technology exposure is zero, replaced by stable, dividend-paying

4 Best Monthly Dividend ETFs to Earn Income in 2026 (High Growth)

Close-up of a woman counting US dollar bills, representing monthly income from high-growth dividend ETFs

Monthly dividend ETFs pay cash every 30 days instead of quarterly, which is perfect if you want regular income. Simple concept: Invest money, collect monthly checks, and watch wealth grow, right? But the thing is, most of these funds work differently than you’d think. They offer huge yields that look incredible. However, your investment loses value every year while you’re cashing your dividend checks. The difference comes down to an important measure: Total Return. You see, one fund might pay 8% yield but only return 2% annually when you factor in stock price changes. On the other hand, another fund only pays a 3% yield but returns 12% per year. That second fund is going to make you wealthier even though its dividend payments are smaller. Now let’s say you invest $100,000 and take dividends as income. With the 8% yield returning 2% total, you get $8,000 in dividends but your investment drops to $94,000. Your net gain: $2,000. With the 3% yielder returning 12% total, you get $3,000 in dividends and your investment also grows to $109,000. Your net gain: $12,000. » Stay ahead of your finances: Join our newsletters today If we look at this over 10 years, this compounds very negatively. The high-yield fund leaves you with less money and shrinking dividend payments. On the other hand, the high-growth fund builds wealth while your income keeps increasing. The four monthly dividend ETFs I’m covering actually grow your money while paying monthly, and all four have averaged strong annual returns since they launched. » Start investing today: Explore top brokerage accounts with our detailed review What Are Monthly Dividend ETFs? Monthly dividend ETFs are exchange-traded funds that distribute income payments every month instead of quarterly. This creates consistent cash flow, but the strategy behind those payments matters more than the frequency. Covered call strategies generate premium income by selling call options on underlying stock holdings. JEPI and JEPQ use this approach on S&P 500 and Nasdaq-100 stocks respectively. When volatility spikes, option premiums rise, which boosts monthly distributions. The tradeoff is limited upside during strong bull markets. Tactical covered calls take a more selective approach. DIVO holds just 28 dividend-paying stocks and writes calls only when managers spot favorable conditions. The idea here is to capture more upside than systematic strategies, but it requires active management skill to execute. Dividend growth investing skip options entirely. DGRW screens for 200 high-quality dividend growth stocks. The 3.1% yield is lower, but the fund captures full equity gains without call option caps. Looking over five years, this approach delivered 13.0% annualized returns. 1. JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) JEPQ combines Nasdaq-100 growth stocks with systematic covered calls on the index. This structure targets high monthly income while maintaining exposure to tech-heavy growth stocks.1 The fund holds 107 stocks drawn from the Nasdaq-100. Top holdings include familiar names like Apple, Microsoft, and Nvidia. Unlike funds that own every Nasdaq-100 stock, JEPQ uses a data-driven selection process to construct its equity sleeve. The 0.35% expense ratio covers both equity management and options execution. The covered call overlay sells one-month call options on the Nasdaq-100 Index, staggered in weekly buckets to diversify strike prices and expiration dates. These calls are structured as equity-linked notes (ELNs), which simplifies tax treatment and allows the fund to pass through all premium income as monthly distributions. Monthly distributions currently yield 11.6% based on forward estimates. This income comes from two sources: dividends from the underlying stocks (typically under 1%) and option premiums (the bulk of the yield). When market volatility rises, option premiums increase, which can boost distributions during turbulent periods. Performance has been exceptional. Over three years, JEPQ returned 90.5% (approximately 24.7% annualized). This substantially outpaces both the S&P 500 and traditional dividend strategies. The main tradeoff though, is upside limitation during sustained bull markets. When the Nasdaq-100 rallies hard, sold call options cap gains above the strike price. However, the fund typically sells calls 2% out of the money, which preserves some upside participation while collecting premium income. » Earn more on your savings: Explore top high-yield savings accounts today 2. JPMorgan Equity Premium Income ETF (JEPI) JEPI applies the same covered call framework as JEPQ but uses S&P 500 stocks instead of Nasdaq-100.2 This creates a more defensive income profile with lower volatility. The fund holds 124 large-cap stocks selected from the S&P 500 universe. The equity sleeve targets approximately 80% of the S&P 500’s volatility (beta of 0.8), which means smoother returns during market swings. Top holdings span sectors like healthcare, industrials, and financials rather than concentrating in technology. The covered call process mirrors JEPQ. One-month calls on the S&P 500 Index, sold through ELNs, staggered weekly to diversify execution. The 0.35% expense ratio matches JEPQ. Monthly distributions yield 8.8% based on forward estimates. Lower than JEPQ, but the defensive equity positioning reduces downside exposure. During 2022’s bear market, JEPI significantly outperformed the S&P 500 due to this defensive tilt plus option income. Performance since inception (May 2020) shows approximately 9.6% annualized returns over five years and 10.5% over three years. The fund delivered positive returns in 2022 while the S&P 500 dropped 18%. This defensive characteristic makes JEPI suitable for investors prioritizing stability over maximum returns. Best used when you want monthly income with lower volatility than the broad market. JEPI won’t match the S&P 500 during strong bull runs, but it cushions downside during market stress. 3. WisdomTree U.S. Quality Dividend Growth Fund (DGRW) DGRW takes a fundamentally different approach. No covered calls. No option premiums. Just 200 high-quality dividend growth stocks selected through a systematic screening process.3 The quality screens filter for companies demonstrating:  Consistent earnings and sales growth.  Improving return on equity and assets.  Increasing dividend payments.  This produces a concentrated portfolio of 200 stocks rather than owning the entire market. Top holdings include established dividend growers like Microsoft, ExxonMobil, and Home Depot. The top 10 holdings represent 37.3% of fund assets. Sector exposure tilts toward technology (26.5%),

Is Now a Good Time to Invest in Index Funds? 2026 Insights

Graphic for InvestLane's guide on whether now is a good time to invest in index funds

Last April 2025, you may have watched your portfolio crater as markets crashed on what President Trump called “Liberation Day.”  Maybe you panicked and sold when the S&P 500 plunged during those volatile days. Maybe you sat on the sidelines, waiting for things to calm down. Then, in what felt like a blink of an eye, markets not only recovered but hit new all-time highs by June. Now you’re staring at index funds sitting near record levels, with financial headlines screaming about “overvalued markets” and elevated valuation ratios. The question burning in your mind: Is this really a good time to start investing in index funds, or should you wait for the next crash? Here’s the truth that might surprise you. The data shows that this exact question about timing your entry into index funds might be the wrong question entirely. After looking closely at decades of market data, including what happened to investors during and after crashes just like April’s, the evidence points to one clear conclusion: time in the market beats timing the market, every single time. Current Data Insights Let’s start with where we stand today. As of January 2026, the S&P 500 is up 17.82% compared to the same time last year.1  One metric that financial experts often reference is the CAPE ratio (Cyclically Adjusted Price-to-Earnings ratio), also known as the Shiller P/E ratio. This measurement looks at stock prices compared to average earnings over the past 10 years, adjusted for inflation. It helps smooth out short-term earnings fluctuations to give a clearer picture of whether markets are expensive or cheap relative to historical norms. As of December 2025, the global CAPE ratio sits around 27.71, which is above its long-term historical average but not at the extreme levels we’ve seen during major market peaks.2 Think of CAPE like a price tag on the entire stock market, when it’s high, you’re paying more for each dollar of company earnings, suggesting potentially lower future returns. When it’s low, you’re getting more earnings for your investment dollar. In the meantime, investors have poured $363 billion into ETFs in 2025, with index funds still commanding the majority of these flows despite increased interest in actively managed funds.3 This shows that even after the April volatility, prudent investors are still putting their money into broad market index funds. But it’s understandable if you are nervous. Fresh in everyone’s memory is that April crash when new tariff policies sent global stock markets tumbling. Granted, valuation concerns are real when markets sit above historical averages. Add in the ongoing uncertainty around Fed policy and inflation, and it’s natural to wonder if you’re buying at the top. If you’re thinking to buy a stock index fund or almost any broadly diversified stock fund, such as one based on the S&P 500, now can be a good time to buy as long as you plan to hold it for the long term. The market generally rises over time because the economy grows and corporate profits increase. The key phrase there is “prepared to hold it for the long term.” That’s where most investors get tripped up. » Start investing today: Explore top brokerage accounts with our detailed review April 2025 Crash: A Case Study What happened in April 2025 gives us a real-time example of why market timing usually fails. In early April, new tariff policies were announced that would significantly increase costs on imported goods from many trading partners. The reaction was swift and severe, with stock markets around the world tumbling as investors worried about the economic impact of the new trade policies. The crash was real and painful. Some investors saw their portfolios drop more than 27% during this period.4 Even typically stable investments like bonds sold off, creating widespread panic across financial markets. Many investors who had lived through previous market downturns found themselves shaken up by how quickly things deteriorated. But here’s the critical part that many missed: Just days later, policymakers announced they would pause the tariff increases. This single announcement triggered what many described as one of the largest stock market rallies in years. Within weeks, the S&P 500 had turned positive for the year. By summer, both the S&P 500 and NASDAQ were hitting new all-time highs. Think about that timeline. A mere seven days from panic to the beginning of recovery. Less than three months from crash to new highs. The biggest mistake during chaotic markets is panicking and making moves without a real plan, often turning temporary drops into permanent losses. The benefit of staying invested became crystal clear to anyone who rode out those turbulent weeks. This mirrors exactly what Warren Buffett told LeBron James years ago when asked for investment advice: “Owning the United States at a decent average price bought over time, you really can’t go wrong with that.”5 LeBron followed that advice and officially became a billionaire. The lesson from April 2025 couldn’t be clearer. Investors who stayed invested through the crash saw full recovery plus additional gains. Those who sold and waited for “better entry points” missed the entire recovery rally. » Stay Ahead: Join our weekly newsletter today Market Timing vs. Time in Market Let’s look at what decades of research tells us about trying to time the market versus simply staying invested. Charles Schwab conducted one of the most comprehensive studies on this topic, following five hypothetical investors over 20 years from 2005 to 2024.6 Peter Perfect had impossibly good timing, investing his $2,000 each year at the absolute market low. After 20 years, he accumulated $184,183. Ashley Action invested her $2,000 immediately at the beginning of each year, regardless of market conditions. Her final balance: $175,541. Matthew Monthly used dollar-cost averaging, investing $167 each month. He ended with $166,591. Rosie Rotten had terrible timing, investing at each year’s market peak. Even with the worst possible timing, she still accumulated $138,471. Larry Linger kept waiting for the perfect moment and never invested in stocks at all,

QQQ vs QQQM: This Difference Could Cost You Thousands

Business team meeting to plan investments, representing choosing between QQQ and QQQM for Nasdaq-100 investing

The Invesco QQQ Trust is one of the most recognizable investment funds in the world. With over $400 billion in assets under management, it is one of the largest ETFs in the market.1 In fact, since its launch in 1999, QQQ has delivered over 500% more in returns than the S&P 500.2 But here’s what many investors don’t know: QQQ has a nearly identical alternative called QQQM that could save you thousands of dollars over your investing career. Both track the same index and hold the same companies, yet the choice between them significantly impacts your long-term wealth. We are going to break down QQQ vs QQQM so you can make a decision based on the facts and plenty of data. Truth be told, understanding this difference takes just a few minutes, but the financial impact compounds for decades. By the end, you’ll know which fund fits your specific situation and could keep thousands of extra dollars in your portfolio. Understanding the Nasdaq 100 Before we compare QQQ vs QQQM, let’s understand what both of these funds invest in. The Nasdaq 100 index represents the 100 largest non-financial companies listed on the Nasdaq stock exchange. This index excludes all financial sector companies like banks and insurance firms. It focuses instead on technology, consumer services, healthcare, and other growth industries. The index is market capitalization weighted, meaning larger companies like Apple, Microsoft, and Nvidia have more influence on performance. This weighting makes sure the biggest, most successful companies drive returns. The Nasdaq stock market based index has historically delivered higher returns than broader stock market indices, though with increased volatility during downturns. The Nasdaq 100 includes companies at the forefront of technological transformation, from cloud computing to artificial intelligence to electric vehicles. The index is rebalanced quarterly and reconstituted annually to ensure it continues representing the largest domestic and international non-financial companies listed on Nasdaq. » Stay Ahead: Join our weekly newsletter today QQQ vs. QQQM: Key Similarities As we compare these two ETFs, the similarities far outweigh the differences. Both are exchange traded funds that track the exact same Nasdaq 100 index, giving you exposure to the identical basket of 100 companies. Identical holdings Table compares the top 10 company holdings in the QQQ and QQQM ETFs as of date listed above. For practical purposes, the holdings are identical. Same sector allocation Table compares the top sector exposures of the QQQ and QQQM ETFs based on date listed above. Because QQQ and QQQM hold the same companies in the same proportions, their sector allocations match perfectly. The technology sector dominates both funds at approximately 51% of total assets. Both also include exposure to communication services, consumer cyclical, consumer defensive, healthcare, and other industries in the Nasdaq 100. Trading and tax efficiency Both are exchange traded funds that trade on the stock exchange during market hours, just like individual stocks. This intraday liquidity sets ETFs apart from mutual funds. Both also offer the same tax efficiency advantages that exchange traded fund structures provide, typically resulting in fewer capital gains distributions. Both funds distribute dividends quarterly from their underlying holdings, and the dividend yield is essentially identical since they hold the same securities. Critical Differences That Affect Your Wealth While QQQ and QQQM offer identical Nasdaq 100 exposure, there are some key differences that determine which makes more sense for your situation. Overview of key fund data points for the QQQ and QQQM ETFs, as of date listed above. Expense ratio: Where the real savings happen The most important difference is the expense ratio. QQQ charges 0.18% annually, while QQQM charges 0.15% annually. This 0.03% difference seems tiny but compounds significantly over time. The expense ratio is the annual fee paid to the fund manager for operating the fund. It’s automatically deducted from the fund’s assets daily, so you never see a separate bill. For every $10,000 invested, QQQ costs $18 annually while QQQM costs $15. Let’s examine a realistic scenario. Suppose you invest $10,000 upfront and add $500 monthly for 30 years, assuming the historical 10% average annual return: With QQQ (0.18% expense ratio): Ending balance: ~$1,051,000 Total fees paid: ~$41,000 With QQQM (0.15% expense ratio): Ending balance: ~$1,058,000 Total fees paid: ~$35,000 The difference: Over $7,000 saved with QQQM While the percentage difference seems minor, this is a clear example on why the lower expense ratio matters. The 0.03% difference costs you more each year as your portfolio grows, and the fee savings continue compounding. Share price accessibility QQQ trades around $630+ per share while QQQM trades around $260+ per share. This price difference simply reflects QQQM’s lower launch price in 2020, not necessarily a difference in value. For investors on platforms without fractional shares, QQQM’s lower price makes it more accessible. With $600 to invest, you could buy 2 shares of QQQM but struggle to afford one share of QQQ. Many modern brokerages offer fractional shares now, eliminating this concern. » Ready to start investing? Compare our top brokerage accounts and begin building your portfolio Liquidity and trading volume QQQ has a clear advantage in liquidity. It’s the 2nd most actively traded exchange traded fund in the United States, with average daily volume of approximately 55 million shares over recent months.3 QQQM has much lower trading volume at around 5 million shares daily.4 This difference matters primarily for active traders. Higher trading volume creates tighter bid-ask spreads. Current data shows QQQ has a 0% bid-ask spread while QQQM has 0.01%. For a $10,000 trade, that 0.01% spread costs an extra dollar, insignificant for buy and hold investors but could be meaningful for frequent traders. The high trading volume in QQQ also supports a robust options market. Investors using options strategies find far more liquidity and better pricing in QQQ options compared to QQQM. Track record QQQ launched in March 1999, providing over 25 years of performance history and data through multiple market cycles.5 QQQM launched in October 2020, offering less than five years of track record. While QQQM

Index Funds for Retirement: The Ideal Allocation at Every Age

Graphic for InvestLane's guide to index funds for retirement and the ideal stock and bond allocation at every age

Why Allocation Matters More Than Timing Many Americans worry about their financial future, whether they’ll have enough money to retire and if they’re making smart investment choices. It’s important to recognize that good investing is important at every stage of your career. Whether you’re just starting out or getting close to retirement, the basic principles of index fund allocation stay the same.  According to Fidelity’s 2024 analysis of over 24.5 million 401(k) participants, the average retirement savings rate across all ages in the U.S. is 14.1%, close to the recommended 15% needed to maintain your lifestyle in retirement.1 But saving alone isn’t enough to get the best result. How you allocate those savings between stocks and bonds can mean a huge difference between a comfortable retirement and financial stress. For intelligent retirement planning, index funds have become fundamental, offering broad market exposure at minimal costs. The S&P 500, for instance, has delivered an average annual return of approximately 10% over the long term, making index funds that track this benchmark attractive options for retirement savers.2 However, the real key to success is more than just picking good index funds, it’s adjusting your allocation as you age. » Start investing today: Explore top brokerage accounts with our detailed review Understanding Asset Allocation Asset allocation is how you divide your investment portfolio among different asset classes, primarily stocks, bonds, and cash. This decision impacts your returns more than any individual fund selection. Research consistently shows that asset allocation accounts for roughly 90% of portfolio performance over time.3 That is a significant amount. When it comes to retirement planning, asset allocation serves two very important purposes: growth during your accumulating years and preservation as you approach and enter retirement. Stocks provide the growth potential needed to build wealth and combat inflation, while bonds offer stability and income when you need predictable returns. Index funds make asset allocation much simpler by providing instant diversification within each asset class. While index funds can be bought as either an ETF or Mutual Fund, both provide the same underlying exposure as well as opportunities. The relationship between stocks and bonds in your portfolio should shift as you age. Vanguard’s research on target date funds shows a clear glide path: starting with 90% stocks at age 25, gradually decreasing to 30% stocks by age 72.4 This approach balances growth potential with increasing stability as retirement approaches. » Learn more: Understand your allocation with our free InvestLane Score Calculator Your 20s and 30s: Growth Mode During your 20s and 30s, time is your greatest asset. With 30-40 years until retirement, you can weather market volatility and benefit from compound growth. This makes an aggressive allocation appropriate, typically 90% stocks and 10% bonds, though your specific allocation should reflect your individual circumstances and risk tolerance. A simple yet effective approach during this phase involves two core index funds: a total stock market index fund capturing the entire U.S. equity market, and a total bond market fund for stability. This strategy aligns with Warren Buffett’s famous 2-fund portfolio recommendation of 90% S&P 500 index funds and 10% bonds; a simple approach he’s advocated for long-term investors and famously recommended for his own wife’s inheritance. The power of starting early cannot be overstated. Consider this: Investing $500 monthly in index funds earning the market’s historical average of 10% annually would grow to nearly $3 million over 40 years. Wait 10 years to start, and that number drops to about $1.1 million. That is a difference of nearly $2 million due to 10 additional years of compounding. International diversification may also become increasingly important as markets globalize. The amount will vary based on your interest, but Vanguard recommends allocating roughly 40% of your equity exposure to international stocks, providing exposure to growth opportunities outside the U.S. market.5 While we recognize the value of international exposure, at InvestLane, we consider the U.S. market the ideal foundation for nearly any investment portfolio. All in all, during this growth phase, focus on maximizing contributions to tax-advantaged accounts like 401(k)s and IRAs. Take full advantage of any employer matching; it’s free money toward your retirement. The compounding effect of tax-deferred growth over decades makes these accounts incredibly powerful wealth-building tools.  Your 40s: Start to Balance Your 40s mark a transition period. You likely have increasing responsibilities such as mortgage payments, children’s education costs, but still have 20-25 years until retirement. This calls for a gradual shift toward more conservative allocations while maintaining substantial growth exposure. A typical allocation during this decade might be 70-80% stocks and 20-30% bonds. This aligns well with the popular “Rule of 110,” which suggests subtracting your age from 110 to determine your stock allocation percentage. For example, a 40-year-old would target 70% stocks (110 – 40 = 70%).  While this rule provides a helpful starting point, many financial experts now lean toward slightly more aggressive allocations given longer life expectancies. This balanced approach provides continued growth potential while introducing more stability. You might structure this as 60% total stock market, 15% international stocks, and 25% bonds. Your 40s is also when many investors start thinking more seriously about different types of index funds. Consider adding small-cap and international exposure through dedicated index  ETFs or mutual funds if your initial portfolio was heavily weighted toward large-cap U.S. stocks. Small-cap stocks have shown cyclical patterns of outperformance during certain market conditions. Your 50s: Prep Mode Your 50s represent that critical “prep mode” decade for retirement. With 10-15 years until you stop working, protecting accumulated wealth becomes as important as growing it. A balanced approach, typically 50-60% stocks and 40-50% bonds, helps achieve this balance. When selecting the best index funds for your 50s, consider core holdings like S&P 500 index funds for large-cap exposure, and international funds. The S&P 500’s credibility and historical performance makes it a cornerstone of most retirement portfolios. During this decade, dividend-focused index funds become particularly valuable additions. Funds that track dividend aristocrats or focus on dividend growth, such as SCHD (Schwab

ETFs vs. Mutual Funds: Which One Should You Pick?

Balance scale on a desk with books, representing the choice between ETFs and mutual funds

Any comparison of exchange-traded funds (ETFs) vs mutual funds begins with their dominant role in U.S. investing. ETFs and mutual funds total a staggering US$34.1 trillion, meaning more than half of all U.S. asset management funds are invested through these vehicles.1 So what exactly are ETFs and mutual funds? In this article, we’ll answer that and put them head-to-head so you know which one makes the most sense for you. Index Funds in the ETFs vs. Mutual Funds Debate Before comparing ETFs and mutual funds, let’s clear up a common mix-up. Many people use “ETF,” “mutual fund,” and “index fund” as if they are the same, but they are not. ETFs and mutual funds are investment vehicles, which means they are containers that hold a mix of stocks, bonds, or other assets. An index fund, by contrast, is a strategy. It means building a portfolio that reflects a market index, like the S&P 500 (a list of the 500 largest U.S. companies). So, an index fund isn’t a separate vehicle. It’s an approach you can take inside an ETF or a mutual fund. A good example is Vanguard’s S&P 500 offerings: the ETF version (VOO) and the mutual fund version (VFIAX). Both follow the same index and are considered index funds, but the structure and trading style differ. The other main approach is active management. Here, a professional manager studies the market and picks stocks with the goal of beating the index, rather than just matching it. In practice, you’ll find both index ETFs and index mutual funds, as well as actively managed versions of both. The good news: ETFs and mutual funds have very similar structures, so it’s easy to compare them side by side. » Stay ahead of your finances: Join our newsletters today What is a Mutual Fund? A mutual fund is a way for many investors to pool their money together. A professional manager then uses that money to buy a mix of stocks, bonds, or other assets.  Unlike stocks or ETFs, mutual funds don’t trade all day. Instead of being processed throughout the day, all buy and sell orders are executed once the market closes. This price, known as the Net Asset Value (NAV), applies equally to everyone who trades that day. There are two main types of mutual funds: Active mutual funds usually cost more. On average, they charge about 0.60% per year, compared to just 0.06% for index mutual funds.2  The good news is that fees have dropped a lot over the past few decades, making mutual funds more affordable. Mutual funds are popular because they make investing simple. They offer instant diversification, the ability to invest set amounts regularly, and even fractional shares. Index mutual funds, in particular, provide broad market exposure at very low cost, making them a strong choice for long-term, hands-off investors. They’re especially useful in tax-advantaged accounts like IRAs and 401(k)s. In these accounts, taxes on dividends and capital gains are deferred until you withdraw, so your money can grow faster.4 But mutual funds also have some downsides. They’re less tax-efficient in regular taxable accounts, since redemptions by other investors can trigger capital gains for everyone. You can only trade them at the end-of-day NAV, which means you don’t get intraday flexibility. Some funds even require a minimum investment. For example, Vanguard’s 500 Index Fund Admiral Shares has a $3,000 minimum.5  » Ready to invest for retirement? Check out our review on the top IRA Accounts What is an ETF? An ETF, or exchange-traded fund, is an investment fund that holds a basket of assets but trades on a stock exchange like a regular stock. In simple terms, it bundles together investments such as stocks, bonds, or commodities into shares that you can buy and sell during the trading day. Like mutual funds, ETFs give you diversification within a single purchase. The main difference is trading flexibility. Exchanges like the NYSE or NASDAQ list ETF shares, and supply and demand drive their price changes throughout the day. You can buy or sell an ETF at any time the market is open, and you’ll get the current market price. This intraday trading also allows you to use advanced order types, such as limit or stop-loss orders. ETFs, like mutual funds, can be either index-based or actively managed. Index ETFs track a market benchmark or sector, such as the S&P 500, Nasdaq 100, Dow Jones, the U.S. bond market, or even gold. Actively managed ETFs, by contrast, rely on managers to select investments with the goal of outperforming a benchmark. Beyond diversification and flexibility, ETFs are also known for being tax-efficient. Thanks to their “in-kind” trading process, they usually avoid distributing capital gains to investors. Most ETFs also have no minimum investment, making them easy to access for beginners. On top of that, competition among fund providers has driven expense ratios lower in recent years. There are some trade-offs, though. Since ETFs trade like stocks, investors may face costs from bid-ask spreads (the gap between buying and selling prices), especially in less popular funds. And because they are so easy to trade, some investors fall into the trap of over-trading, which can hurt long-term returns. Still, for long-term, disciplined investors, ETFs are often one of the most cost- and tax-efficient ways to invest. ETFs vs. Mutual Funds: Similarities Even though ETFs and mutual funds are structured differently, they share a lot in common from an investor’s point of view. Broad market exposure Both ETFs and mutual funds provide access to many companies, sectors, or even countries, reducing the risk of relying on a single stock. For example, an S&P 500 fund, whether an ETF or mutual fund, spreads your investment across 500 companies so that if one underperforms, others can help balance it out. You can also choose funds that focus on specific markets or sectors, making it easy to build a well-diversified portfolio. Professional management Teams of experts actively manage funds by making buy and sell decisions, while

Member Sign In

Continue with Google
Continue with Facebook
or

User Log In

InvestLane Account Log In.

"(Required)" indicates required fields

Don’t have an account? Create free account

By signing in, you agree to InvestLane’s

Terms of Service and Privacy Policy.

Create Free Account

Continue with Google
Continue with Facebook
or

User Sign Up

For InvestLane to onboard exclusive access.

"(Required)" indicates required fields

Already have an account? Log in

By signing up, you agree to InvestLane’s

Terms of Service and Privacy Policy.

Join our Newsletters

LOG IN
SIGN UP

Newsletter Sign Up

InvestLane logo

InvestLane’s Weekly Newsletter​

Receive expert market insights and analysis each Sunday morning with InvestLane’s free weekly newsletter.