The best ETFs to look out for in your Investment Plan

You will surely have wondered which are the best ETFs to include in your plan. Obviously the choice varies depending on your individual goals, but there are different types you can choose from. Remember that these are not investment tips, but simple examples.

Investment Plans offer an excellent strategy for long-term, passive investing. With an Investment Plan, you have the flexibility to design a personalised portfolio that aligns with your risk tolerance, industry preferences, or regional coverage. The plan will then automatically allocate your invested capital to each ETF according to your designated percentage allocation. As the value of your Investment Plan evolves over time, you'll get alerted to readjust the plan based on your initial fund allocation preferences.

In addition to that, the new autoinvest feature allows clients to choose from the free funds in their XTB account or opt for a bank transfer to regularly top up their individual portfolios.The user-friendly app empowers clients to set up recurring payments at their chosen cadence, be it daily, weekly, or monthly. Recurring payments provide adaptability to changing needs and investment goals.

Clients have the flexibility to create up to 10 portfolios, each comprising up to nine ETFs. The autoinvest functionality can be individually set up for each portfolio, offering unparalleled control over your investment strategy. Modify or cancel the feature at any time through the XTB app, ensuring a tailored and dynamic investment approach. 

Aligned with our commitment to transparency, XTB offers 0% commission on ETF investing*. On top of that, the setup and maintenance of Investment Plans are entirely free of charge, allowing clients to invest without unnecessary costs and barriers.

Let's start with broad market ETFs. These track broad market indices, such as the S&P 500. They therefore give you exposure to a wide range of stocks across different sectors and industries. 

Broad Market ETFs

• iShares Core S&P Total US Stock Market ETF (ITOT): Offers exposure to a broad range of US-listed companies, tracking the performance of the entire US stock market.
• Vanguard Total World Stock Market ETF (VT): Provides global diversification by investing in stocks of listed companies around the world
• SPDR Portfolio S&P 500 ETF (SPLG): tracks the performance of the 500 largest companies listed in the United States

Stock ETFs

Stock ETFs track the performance of a specific stock index or group of stocks. They provide exposure to a wide range of publicly traded companies.

• SPDR S&P 500 ETF Trust (SPY): Replicates the performance of the S&P 500 index, which is made up of the 500 largest companies listed in the United States.
• iShares MSCI EAFE ETF (EFA): Tracks the MSCI EAFE Index, which includes stocks from developed markets outside the United States and Canada.
• Invesco QQQ ETF (QQQ): Is based on the NASDAQ-100 index, which represents the 100 largest non-financial companies listed on the NASDAQ.

Let's then move on to sector ETFs. These track specific sectors of the market and allow you to gain exposure to specific areas

Sector ETFs

• Technology Select Sector SPDR Fund (XLK): Offers exposure to the technology sector, investing in leading innovation and information technology companies.
• Health Care Select Sector SPDR Fund (XLV): Provides exposure to the healthcare sector, investing in companies active in healthcare services, pharmaceuticals and biotechnology.
• Financial Select Sector SPDR Fund (XLF): Tracks the financial sector, investing in banks, insurance companies and other key financial institutions.

International ETFs

International ETFs, on the other hand, allow you to gain exposure to foreign markets.

• iShares Core MSCI EAFE ETF (IEFA): IEFA offers exposure to stocks from developed markets outside the United States, tracking the performance of the MSCI EAFE Index.
• Vanguard FTSE All-World ex-US ETF (VXUS): Provides global diversification by investing in shares of companies listed around the world, except the United States.
• SPDR Portfolio International Developed Markets ETF (SPDW): Tracks the performance of indices representing developed markets outside the United States

Fixed Income ETFs

Fixed income ETFs invest primarily in bonds, providing a regular income stream to investors.

• iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD): Invests in US dollar-denominated investment grade corporate bonds.
• Vanguard Total Bond Market ETF (BND): Tracks the Bloomberg Barclays U.S. Index. Aggregate Bond Index, which includes US government and corporate bonds.
• iShares U.S. Treasury Bond ETF (GOVT): Focuses exclusively on U.S. Treasury bonds, providing exposure to government bonds.

Commodity ETFs

Commodity ETFs follow the price performance of commodities such as gold, oil, silver, etc. They can invest directly in the physical asset or through futures.

• SPDR Gold Trust (GLD): Provides exposure to the price performance of physical gold.
• United States Oil Fund (USO): Follows the price of oil linked to futures.
• iShares Silver Trust (SLV): Tracks the price performance of physical silver.

Currency ETFs

Currency ETFs provide exposure to exchange rates between different currencies. They can be used to speculate on currency movements or as a hedge.

• Invesco CurrencyShares Euro Trust (FXE): Follows the movement of the exchange rate between the euro and the US dollar.
• WisdomTree Japanese Yen Strategy Fund (FXY): Provides exposure to the exchange rate between the Japanese yen and the US dollar.
• PowerShares DB US Dollar Index Bullish Fund (UUP): Tracks the performance of the US dollar against a basket of foreign currencies.

Real Estate ETFs

Real estate ETFs invest in real estate securities such as shares of real estate companies or REITs (Real Estate Investment Trusts), providing exposure to the real estate sector.

• Vanguard Real Estate ETF (VNQ): Replicates the performance of the MSCI US Investable Market Real Estate 25/50 index.
• iShares U.S. Real Estate ETF (IYR): Tracks the Dow Jones U.S. Index Real Estate Index, which represents the US real estate sector.
• SPDR Dow Jones Global Real Estate ETF (RWO): Offers global exposure to the real estate sector through the Dow Jones Global Select Real Estate Securities Index.

Bond ETFs

Finally, bond ETFs are usually more stable than stock ETFs, but they also tend to have lower yields.

• iShares Core US Aggregate Bond ETF (AGG): Offers exposure to the entire US bond market, including government, corporate and municipal bonds.
• Vanguard Total Bond Market ETF (BND): follows the performance of the Bloomberg Barclays U.S. index. Aggregate Bond Index, which includes US government and corporate bonds.
• SPDR Portfolio Total US Bond Market ETF (SPTL): Offers broad exposure to the US bond market, including a variety of government, corporate and municipal bonds.

When building an Investment Plan, it is important to diversify across different asset classes and sectors. This will help you reduce your overall risk and increase your chances of long-term success.