We are Adding These ETFs to our Model Portfolios
03/27/2017 2:50 am EST
Here are brief descriptions of the exchange-traded funds we are adding to our model portfolios:
* VanEck Vectors High-Yield Municipal (HYD) tracks an index that targets the performance of the U.S. dollar denominated high-yield long-term tax-exempt bond market. The 4.4% yield and upward momentum of this ETF make it attractive for tax-deferred as well as taxable accounts. It has more than 1,300 holdings, $1.8 billion in assets, and an expense ratio of 0.35%.
* SPDR S&P Biotech (XBI) represents all of the U.S.-listed common stocks of companies in the biotechnology subindustry. It follows a modified-equal-weight index, with 24 stocks receiving a nominal weight of 2.5% each, and the remaining 72 holdings getting smaller allocations. The ETF has $3.2 billion in assets and an expense ratio of 0.35% (XBI webpage).
* iShares U.S. Financial Services (IYG) tracks the Dow Jones U.S. Financials Services Index, which is composed of U.S. investment banks, commercial banks, asset managers, credit card companies, and securities exchanges. It has $1.2 billion in assets, a current yield of 1.2%, and an expense ratio of 0.44%.
* iShares MSCI South Africa (EZA) tracks an index designed to encompass 85% of South Africa’s equity market. Its sector breakdown includes Consumer Discretionary 35%, Financials 32%, Consumer Staples 9%, Telecom 7%, and Materials 6%. The ETF has 55 cap-weighted holdings, $437 million in assets, a current yield of 2.2%, and an expense ratio of 0.63%.