ETF Investing Guide: A Core ETF Portfolio

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 |  Includes: DBC, IEFA, IEMG, IJH, LQD, PLW, SCHP, VNQ, VOO, VTWO
by: David Jackson

Now that we’ve seen the case for buying ETFs in an online brokerage account, we’ll look at how to assemble a portfolio in practice. Here's what we're going to end up with (the next section will explain why):

Important note: As the ETF space continues to expand and expense ratios continue to fall, it is necessary to revise which funds belong in the Core ETF Portfolio. This portfolio was most recently revised on December 17, 2014 with an eye on lowest expense ratios, largest number of holdings (for maximum diversification), and AUM (to ensure proper trading liquidity). Seeking Alpha's own ETF Screener is an excellent resource for locating the cheapest funds with the most holdings and reasonable AUM levels within each core asset class.

ETFs for a Core Portfolio

ETF Ticker Fund Name Fund Description Expense Ratio
VOO Vanguard S&P 500 ETF Large cap US stocks 0.05%
IJH iShares Core S&P Mid Cap ETF Mid cap US stocks 0.12%
VTWO Vanguard Russell 2000 ETF Small cap US stocks 0.15%
IEFA iShares Core MSCI EAFE ETF Multi cap foreign developed market stocks 0.12%
IEMG iShares Core MSCI Emerging Markets ETF Multi cap emerging market stocks 0.18%
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF US investment grade corporate bonds 0.15%
PLW PowerShares 1-30 Laddered Treasury Portfolio ETF US Treasuries 0.25%
SCHP Schwab U.S. TIPS ETF US TIPS 0.07%
VNQ Vanguard REIT Index ETF US REITs 0.10%
DBC PowerShares DB Commodity Index Tracking ETF Broad commodities 0.85%
Click to enlarge

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