Which ETF to invest in? This guide is here to list ETFs from the broad index tracking ETFs to specific market or sector. By mapping out these ETFs, this article should form a useful guide for portfolio diversification. Which is the process of creating a diversified portfolio that suits your financial goals. This guide will cover a diverse array of ETFs. Investing in ETFs is like enjoying the best of both worlds – combining the ease of stock trading with the diversification of mutual funds.
Before diving headfirst into the world of ETFs, it’s crucial to understand what you’re getting into. Although please note, this guide is just my personal insights, and knowledge gathering. Remember, your financial journey is unique. Knowledge is your compass – use it wisely. Please note, this article may include OEICs and Unit Trusts. These are similar to ETFs but have some key differences.
What Is An ETF Investment?
An Exchange-traded fund (ETF) is a popular type of passive investment that provide access to a wide range of markets. Exchange-Traded Funds (ETFs) have taken centre stage in the modern world of investing due to their simplicity and low cost. ETFs invest in a basket of securities, such as stocks, bonds, or other asset classes. These securities are traded on a stock exchange. ETFs cover a broad range of asset classes and can give exposure to specific markets, sectors or investment strategies. Many ETFs track an index in order to provide this return.
Unlike stocks, ETFs hold a basket of assets, which could include stocks, bonds, or commodities. They’re also cost-effective and flexible, making them a popular choice among investors. If you’re new to the concept, fret not! We’ll start with broad market ETFs that track the S&P 500 and the Nasdaq before moving into highly specialized ETFs.
Read: Nasdaq 100 Vs S&P 500 Vs Dow: Greatest Index Of All Time?
Full Disclaimer: This guide is intended for informational purposes only and is not financial advice. The world of investing carries risks, so consult a financial advisor before making any investment decisions. When investing capital is at risk. This article contains affiliate links.
Which ETF to Invest In – Exploring Notable ETFs:
Let’s meet the stars of our ETF show! Take the Invesco QQQ Trust Series 1 (QQQ), for instance – it tracks the NASDAQ 100, a tech-heavy index. Or how about Vanguard 500 Index Fund ETF (VOO) and Vanguard 500 Index Fund ETF (SPY), which follow the S&P 500. Often on of these will be the go-to ETF to invest in for most people.
If you’re in the United Kingdom like me, this means you might be looking for:
- S&P 500 UCITS ETF (VUSA)
- S&P 500 UCITS ETF – (USD) Accumulating (VUAG)
- Vanguard FTSE North America (VNRT)
Other Popular Vanguard Funds;
- Vanguard Global Small-Cap Index Fund
- Vanguard U.S. Equity Index Fund
- Vanguard Global Equity Fund
- Vanguard Global Emerging Markets Fund
- Vanguard FTSE Developed Europe
- Vanguard FTSE Developed World
- Vanguard FTSE Global All Cap Index Fund
- Vanguard FTSE All-World UCITS ETF (VWRL, VWCE, VWRD))
- Vanguard FTSE Developed World ex-U.K. Equity Index Fund – Accumulation.
There are also additional options to exclude the UK. Investors can also select ESG versions of many of the above funds. P.s. the fastest way to start investing is to download the Lightyear investment app (capital at risk).
Unsurpassed ETFs: Which Vanguard Funds Are The Best?
High Growth Potential ETFs To Invest In:
Finding a high growth ETF to invest in can expose you to more volatility. However, much of the research suggests that small or mid cap stocks can offer higher returns. You will also find evidence that Emerging Markets may also generate higher future returns for investors willing to invest in a higher risk ETF.
- iShares Russell 1000 Growth ETF (IW) is A Russell 1000 tracking growth fund, more aggressive than VOO/SPY but less volatile than QQQ. Has overlaps with other funds but with a slightly different mix.
- Small/Mid-Cap ETFs: iShares Russell 2000 Growth ETF An indexed fund using the Russell 2000 index (IMW), focusing on small and mid-cap companies. Offers diversification and potential for outperformance in market downturns.
- International ETFs: Vanguard Total International Index Fund ETF (VXUS), investing in overseas companies. Top holdings include BABA, Tencent, Samsung, and Novartis. Offers diversification beyond US markets.
- EEM: iShares MSCI Emerging Markets ETF, focusing on emerging markets and having a lot of overlap with VXUS.
- EFA: An international ETF with a focus on established companies in Europe and Japan.
Everybody Recommends The FTSE Global All Cap But Is This The Best Portfolio Choice?
Blackrock & iShares Sector-Focused ETFs:
Diversity isn’t just a buzzword – it’s a strategy that can help your portfolio weather storms. We’ll delve into sector-focused ETFs like clean energy (ICLN), health care (XLV), and tech (XLK). These ETFs allow you to tap into specific industries and potentially ride the waves of growth. Here I have selected niche categories and/or BlackRock mega-trend ETFs. Blackrock has created a diverse range of funds. For example, if you want a ETF to invest in artificial intelligence, you have the iShares Robotics and Artificial Intelligence Multisector ETF.
BlackRock ETFs To Invest In
| Fund Name | Trading Symbol | Categorization |
|---|---|---|
| iShares Breakthrough Environmental Solutions ETF | ETEC | Environmental and Sustainable Solutions |
| iShares MSCI Global Sustainable Development Goals ETF | SDG | Global Sustainable Development |
| iShares MSCI Water Management Multisector ETF | IWTR | Water Management |
| iShares Environmental Infrastructure and Industrials ETF | EFRA | Environmental Infrastructure and Industrials |
| iShares Global Clean Energy ETF | ICLN | Clean Energy |
| BlackRock Future Climate and Sustainable Economy ETF | BECO | Environmental and Sustainable Solutions |
| iShares USD Green Bond ETF | BGRN | Impact |
| iShares Exponential Technologies ETF | XT | Megatrends |
| iShares U.S. Tech Breakthrough Multisector ETF | TECB | Megatrends |
| iShares Robotics and Artificial Intelligence Multisector ETF | IRBO | Megatrends |
| iShares Cybersecurity and Tech ETF | IHAK | Megatrends |
| iShares Future Cloud 5G and Tech ETF | IDAT | Megatrends |
| iShares Blockchain and Tech ETF | IBLC | Megatrends |
| iShares Virtual Work and Life Multisector ETF | IWFH | Megatrends |
| iShares Genomics Immunology and Healthcare ETF | IDNA | Megatrends |
| BlackRock Future Innovators ETF† | BFTR | Megatrends |
| iShares Copper and Metals Mining ETF | ICOP | Metals and Mining |
| iShares Lithium Miners and Producers ETF | ILIT | Metals and Mining |
| iShares MSCI Water Management Multisector ETF | IWTR | Water Management |
| iShares Future Metaverse Tech and Communications ETF | IVRS | Megatrends |
| BlackRock Future Health ETF† | BMED | Megatrends |
| BlackRock Future U.S. Themes ETF† | BTHM | Megatrends |
| iShares Global Infrastructure ETF | IGF | Infrastructure |
| iShares U.S. Infrastructure ETF | IFRA | Infrastructure |
| iShares Emerging Markets Infrastructure ETF | EMIF | Infrastructure |
| iShares Emergent Food and AgTech Multisector ETF | IVEG | Megatrends |
| iShares Global Clean Energy ETF | ICLN | Clean Energy |
| iShares Self-Driving EV and Tech ETF | IDRV | Megatrends |
| BlackRock Future Climate and Sustainable Economy ETF | BECO | Environmental and Sustainable Solutions |
| BlackRock Future Financial and Technology ETF | BPAY | Megatrends |
| iShares MSCI China Multisector Tech ETF | TCHI | China Tech |
| iShares MSCI China A ETF | CNYA | China Tech |
| iShares MSCI India ETF | INDA | India Tech |
Innovation & Technology ETFs
Hargreaves Lansdown also offers a diverse range of sector based ETFs to invest in. Much more-so than Vanguard. As Vanguard is much more focused on maintaining a core list of index funds. Below I have included a shortlist of ETFs to invest in, these are based around technological innovation. For example, this list contains Robotics ETFs and Autonomous vehicle ETFs.
This is not an exhaustive list of all ETFs you can invest in with H&L but should give you a strong flavour of what’s available for UK investors. The majority of these can also be included within a stocks and shares ISA wrapper. Which allows you to invest in these niche areas in a tax efficient manner. If you don’t have a stocks and shares ISA, click here to open one with H&L today.
Technology & Automation ETFS
IOT ETFS: GLOBAL X ETFS ICAV INTERNET OF THINGS UCITS ETF USD ACC (SNSG).
Cloud Computing: GLOBAL X ETFS CLOUD COMPUTING UCITS ETF USD ACC (CLO6), HANETF ICAV CLOUD TECHNOLOGY UCITS ETF USD ACC (SKYY), WISDOMTREE CLOUD COMPUTING UCITS ETF USD ACC (WCLD).
Robotics ETFS: GLOBAL X ETFS ICAV ROBOTICS & ARTIFICIAL INTELLIGENCE UCITS ETF USD (BOTG), LEGAL & GENERAL GLOBAL ROBOTICS & AUTOMATION INDEX.
Self-Driving & Electric Cars ETFs: ISHARES IV PLC ELECTRIC VEHICLES AND DRIVING TECHNOLOGY UCITS ETF (ECAR), GLOBAL X ETF ICAV AUTONOMOUS & ELECTRIC VEHICLES UCITS ETF INC (DRVG).
Aerospace & Defence ETFs: VANECK UCITS ETFS PLC VANECK DEFENSE UCITS ETF A USD ACC (DFNG), HANETF ICAV PROCURE SPACE UCITS ETF ACC (UFOP).
Finance, Healthcare & Consumer
Genomics & Biotechnology ETFS: GLOBAL X ETFS GENOMICS & BIOTECHNOLOGY UCITS ETF USD ACC (GNOG), INVESCO MARKETS PLC KBW NASDAQ FINTECH UCITS A USD (FTEK).
Healthcare Innovation ETFs: ISHARES IV PLC HEALTHCARE INNOVATION UCITS ETF USD (DRDR), L&G HEALTHCARE BREAKTHROUGH UCITS ETF GBP (DOCG).
Financial Technology ETFs: Global X ETF ICAV FinTech UCITS ETF USD Inc (FING), AXA FRAMLINGTON FINTECH.
Video Game ETFs: GLOBAL X ETFS ICAV VIDEO GAMES & ESPORTS UCITS ETF USD ACC (HERU), VANECK INVESTMENTS LTD VIDEO GAMING ESPORTS UCITS ETF USD -CLASS A (ESPO) (OR VANECK ESGB).
Online Retail ETFs: GLOBAL X ETF ICAV E-COMMERCE UCITS ETF USD ACC (GBP) (EBIG).
Energy & Raw Materials
Clean/renewable energy ETFs: GLOBAL X ETF ICAV WIND ENERGY UCITS ETF ACC (WNDG), HANETF ICAV Solar Energy UCITS ETF (TANP), BLACKROCK SUSTAINABLE ENERGY (OFFSHORE).
Semiconductor ETFs: VANECK INVESTMENTS LTD TM SEMICONDUCTOR UCITS ETF (SMGB), HSBC ETFS PLC NASDAQ GLOBAL SEMICONDUCTOR UCITS ETF (HNSS).
Disruptive Materials ETFs: GLOBAL X ETF ICAV DISRUPTIVE MATERIALS UCITS ETF ACC (DMAG).
Broad Sector Based ETFs to Invest In
The below ETFs are still sector focused but less niche than the above. They cover more established and broad areas of the market. This list contains ETFs focused on healthcare, utilities and real estate. For example, rather than a clean energy fund you will find a more general Energy ETF to invest in.
Broad Technology ETFS: Fidelity Global Technology Fund (see my full review), Legal & General Global Technology Index Trust Class C, BLACKROCK NEXT GENERATION TECHNOLOGY, FRANKLIN TECHNOLOGY (W USD), T. ROWE PRICE GLOBAL TECHNOLOGY EQUITY.
Broader HealthCare ETFs: FIDELITY SUSTAINABLE GLOBAL HEALTHCARE, SCHRODER GLOBAL HEALTHCARE, LYXOR ASSET MANAGEMENT MSCI WORLD HEALTH CARE TR UCITS ETF (USD) (HLTW).
Utilities ETFs: INVESCO MARKETS PLC UTILITIES S&P US SEL SECTOR UCITS ETF (XLUS), SPDR SERIES TRUST MSCI EUROPE UTILITIES UCITS ETF (UTIL), AMUNDI INDEX SOLUTIONS S&P GLOBAL UTILITIES ESG UCITS ETF DR – EUR (A) (UTIW).
Energy ETFs: ISHARES V PLC MSCI WORLD ENERGY SECTOR UCITS ETF INC (WENS), DB X-TRACKERS MSCI WORLD ENERGY INDEX UCITS ETF (DR) (XDW0).
Consumer Staples ETFs: ISHARES V PLC S&P 500 CONSUMER STAPLES SECTOR UCITS ETF USD ACC (IUCS), DB X-TRACKERS MSCI WORLD CONSUMER STAPLES INDEX UCITS ETF (DR) (XDWS).
Consumer Discretionary ETFs: INVESCO MARKETS PLC CONSUMER DISCRETIONARY S&P US SELECT SECTOR UCITS (XLYP), SSGA SPDR ETFS EUROPE II MSCI EUROPE CONSUMER DISCRETIONARY UCITS ETF (GBP) (CDCE), DB X-TRACKERS MSCI WORLD CONSUMER DISCRETIONARY INDEX UCITS (DR) (XDWC).
Real Estate ETFs: ABRDN GLOBAL REAL ESTATE SHARE, SCHRODER GLOBAL CITIES REAL ESTATE, FIDELITY GLOBAL PROPERTY.
Financial ETFs: INVESCO MARKETS PLC FINANCIALS S&P US SELECT SECTOR UCITS ETF (XLFQ)
Building a Balanced ETF Portfolio:
Imagine your portfolio as a puzzle – each piece (ETF) contributes to the bigger picture. A balanced portfolio could include broad market funds like VOO and VXUS for international exposure, a sprinkle of small and mid-caps with IWM, and a dash of sector ETFs that resonate with your interests. Hopefully the above list gives you a flavour of the ETF you can invest in.
You may want to have a broad market ETF such as the Vanguard FTSE Global All Cap Index Fund, but feel underweight in terms of exposure to Emerging Markets. As typically Global funds contain around just 4-9% Emerging Markets stocks. Alternatively, you may feel super-passionate about the potential of self-driving autonomous vehicles and want to invest in that. Therefore, it Is possible to invest in a broad market ETF whilst niching down in other areas such as Biotechnology, Videogames or even space travel.
The Fidelity Global Technology Fund Returned 629% In 10 Years But Here’s What You Need To Know Now
Understanding Risk and Volatility With ETFs:
Investing in ETFs isn’t all sunshine and rainbows; there are clouds and storms too. ETFs, like any investment, carry risks. Diversification helps manage those risks, and our balanced approach ensures that your financial ship sails steady even in choppy waters. Unique and Specialized ETFs are tools for exposure to high growth sectors. They are highly unconventional. While they may offer potential rewards, they also come with unique risks – tread carefully.
I personally use an ETF to invest in and use Fidelity, and Lightyear to invest. Remember, what works for me might not be the perfect fit for you. Always customize your investments based on your financial goals and risk tolerance Remember, this guide is a stepping stone, not a final destination. Seek professional advice, research, and refine your portfolio as you go. Happy investing!
Additional Resources:
Want to dig deeper into the ETF world? Check out these trusted resources:
[8 Index Funds That Make My Shortlist]
[Hargreaves Lansdown Free Investor Guide]
[Open a stocks and shares ISA with HL]
[Start investing with Lightyear]
When investing capital is at risk
