Yahoo Finance A Guide to the 25 Cheapest ETFs
The ETF industry is seeing explosive growth, piling up huge assets in recent years. Per ETFGI, total assets in ETFs and ETPs listed globally reached $8.87 trillion at the end of October. This is especially due to their unique strategies, creativity, transparency, diversification benefits, enhanced tax competencies, low turnover and, of course, low cost.
While there are several types of cost associated with ETFs, like trading commissions, bid/ask spreads, premiums and discounts, and tracking error, expense ratios have been the biggest crowd pullers in the ETF world. In fact, the price war has been an ongoing theme in the ETF space over the past few years. It is now in high gear, with most of the ETFs having an expense ratio of zero or below zero. This is especially true as ETFs with low expense ratios significantly outperform their expensive counterparts when other factors remain constant. This can be explained by the following example (see: all the ETFs with Low Expense Ratios here).
Consider two funds with expense ratios of 0.10% and 0.50% and invest $10,000 in both. Now, both funds have delivered the same annual returns of 10% in 10 years. The fund with an expense ratio of 0.10% will grow to $25,703 in 10 years while the same fund with 0.50% in expense ratio will grow by a lower amount of $24,782 in the same time frame. Further, the difference in total returns (after expenses) becomes more significant if we increase the holding period. The same funds with an expense ratio of 0.10% and 0.50%, when invested for 30 years, would have a value of $169,797 and $152,203, respectively, after 30 years.
Keeping the importance of expense ratio in mind, we have highlighted the 25 cheapest ETFs currently on the market and have AUM of more than $50 million:
BNY Mellon US Large Cap Core Equity ETF BKLC – Expense ratio: 0.00%
BNY Mellon US Large Cap Core Equity ETF provides investors with broad exposure to large-capitalization stocks and follows the Morningstar U.S. Large Cap Index. It holds 213 stocks in its basket and has amassed $451.7 million in its asset base. The product trades in an average daily volume of 17,000 shares a day.
SoFi Select 500 ETF SFY – Expense ratio: 0.00%
SoFi Select 500 ETF offers exposure to the 500 largest U.S. companies as measured by market capitalization and uses a composite growth score to adjust companies’ weightings. It follows the Solactive SoFi US 500 Growth Index. SoFi Select 500 ETF has amassed $407.9 million in its asset base and trades in an average daily volume of 128,000 shares.
JPMorgan BetaBuilders U.S. Equity ETF BBUS – Expense ratio: 0.02%
It offers exposure to 610 U.S. large and mid-cap equities by tracking the Morningstar US Target Market Exposure Index. It has AUM of $1.4 billion and trades in an average daily volume of 107,000 shares.
iShares Core S&P 500 ETF IVV – Expense ratio: 0.03%
iShares Core S&P 500 ETF is the second-largest fund in the space with AUM of $306.9 billion and tracks the S&P 500 Index. It holds 503 securities in its basket and trades in a heavy volume of 4.3 million shares per day on average. IVV has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 5 ETFs That Gained Investors' Love Last Week).
Vanguard Total Stock Market ETF VTI – Expense ratio: 0.03%
Vanguard Total Stock Market ETF follows the CRSP US Total Market Index, offering broad exposure across growth and value styles. Holding 4028 stocks, it is the third largest and most-popular fund with AUM of nearly $270.8 billion and an average daily volume of nearly 4 million shares. VTI has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Vanguard S&P 500 VOO – Expense ratio: 0.03%
Vanguard S&P 500 is another low-cost, well-diversified, large-cap fund tracking the S&P 500 Index and holding 503 securities in its basket. It trades in a volume of about 4.2 million shares a day and has AUM of $273.9 billion. Vanguard S&P 500 has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares Core S&P Total U.S. Stock Market ETF ITOT – Expense ratio: 0.03%
This ETF also offers the total U.S. stock market, ranging from some of the smallest to largest companies and tracks the S&P Total Market Index. It holds a larger basket of 3,338 stocks and has AUM of $40.4 billion. The fund trades in an average daily volume of 2.3 million shares. The fund has a Zacks ETF Rank #3 with a Medium risk outlook (read: 5 ETF Picks for December).
Schwab U.S. Large-Cap ETF SCHX – Expense ratio: 0.03%
Schwab U.S. Large-Cap ETF follows the Dow Jones U.S. Large-Cap Total Stock Market Index, holding 758 securities in its basket. It has amassed $30.3 billion in its asset base and trades in volume of 3.2 million shares. Schwab U.S. Large-Cap ETF has a Zacks ETF Rank #3 with a Medium risk outlook.
Schwab U.S. Broad Market ETF SCHB – Expense ratio: 0.03%
This fund provides broad exposure to the U.S. equity market by tracking the Dow Jones U.S. Broad Stock Market Index. It holds a well-diversified portfolio of 2,493 stocks. SCHB is one of the most popular and liquid ETFs, with AUM of $20.8 billion and an average daily volume of 2.1 million shares. It has a Zacks ETF Rank #3 with a Medium risk outlook.
SPDR Portfolio S&P 500 ETF SPLG – Expense ratio: 0.03%
SPDR Portfolio S&P 500 ETF also follows the S&P 500 Index and holds 503 stocks in its basket. It has amassed $15.7 billion in its asset base and trades in a solid volume of 2.1 million shares a day on average. SPDR Portfolio S&P 500 ETF has a Zacks ETF Rank #3.
SPDR Portfolio S&P 1500 Composite Stock Market ETF SPTM – Expense ratio: 0.03%
SPDR Portfolio S&P 1500 Composite Stock Market ETF offers exposure to the broad market by tracking the S&P Composite 1500 Index, holding 1,526 stocks in its basket. It has AUM of $5.8 billion and trades in an average daily volume of 826,000 shares. SPDR Portfolio S&P 1500 Composite Stock Market ETF has a Zacks ETF Rank #3.
iShares Morningstar U.S. Equity ETF ILCB – Expense ratio: 0.03%
This product tracks the Morningstar US Large-Mid Cap Index, holding 732 stocks in its basket. It has accumulated $740 million and trades in an average daily volume of 18,000 shares. The fund has a Zacks ETF Rank #3.
Vanguard Total Bond Market ETF BND – Expense ratio: 0.03%
Vanguard Total Bond Market ETF targets the broad U.S. investment grade bond market by tracking the Bloomberg U.S. Aggregate Float Adjusted Index. It holds 10,220 securities in its basket, with Treasury taking the top spot at 46.4%. Government mortgage-backed bonds and industrial corporates account for 20.1% and 15.4%, respectively. The average maturity and average duration come in at 8.8 years and 6.4 years, respectively. BND is the second-largest bond ETF with AUM of $84 billion and an average daily volume of 7.2 million shares.
iShares Core U.S. Aggregate Bond ETF AGG – Expense ratio: 0.03%
iShares Core U.S. Aggregate Bond ETF also offers broad exposure to U.S. investment-grade bonds and follows the Bloomberg Barclays US Aggregate Bond Index. It holds a broad basket of 10,571 bonds with an average maturity of 8.77 years and an effective duration of 6.43 years. AGG is the largest and most-liquid bond ETF, with AUM of $81.3 billion and an average daily volume of 7.5 million shares.
Schwab Short-Term U.S. Treasury ETF SCHO – Expense ratio: 0.03%
Schwab Short-Term U.S. Treasury ETF targets the short-end of the Treasury market by tracking the Bloomberg US Treasury 1-3 Year Index. It holds 39 bonds in its basket with an average maturity of 1.96 years and an average duration of 1.90 years. Schwab Short-Term U.S. Treasury ETF has AUM of $10 billion and trades in an average daily volume of 2.2 million shares. It has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares 0-5 Year TIPS Bond ETF STIP – Expense ratio: 0.03%
iShares 0-5 Year TIPS Bond ETF offers exposure to short-term TIPS with an effective duration of 2.37 years and an average maturity of 2.43 years. The fund holds 22 securities in its basket and follows the Bloomberg Barclays U.S. TIPS 0-5 Years Index (Series-L). STIP has amassed $13.5 billion in its asset base and trades in an average daily volume of 1.5 million shares (read: "Bonds Are Back": ETF Strategies to Follow).
Schwab Intermediate-Term U.S. Treasury ETF SCHR – Expense ratio: 0.03%
With AUM of $7.7 billion, Schwab Intermediate-Term U.S. Treasury ETF offers exposure to U.S. Treasury securities having a remaining maturity of between 3 and 10 years and follows the Bloomberg US Treasury 3-10 Year Index. It has an effective duration of 5.20 years and an average maturity of 5.60 years. Schwab Intermediate-Term U.S. Treasury ETF trades in an average daily volume of 1.2 million and has a Zacks ETF Rank #3 with a Medium risk outlook.
Schwab 1-5 Year Corporate Bond ETF SCHJ – Expense ratio: 0.03%
Schwab 1-5 Year Corporate Bond ETF offers exposure to corporate fixed income securities having a remaining maturity between 1 and 5 years by tracking the Bloomberg US 1-5 Year Corporate Bond Index. It has an effective duration of 2.70 years and an average maturity of 3.20 years. Schwab 1-5 Year Corporate Bond ETF has amassed $361.9 million and trades in a volume of 67,000 shares a day on average. It has a Zacks ETF Rank #3.
SPDR Portfolio Corporate Bond ETF SPBO - Expense ratio: 0.03%
SPDR Portfolio Corporate Bond ETF tracks the Bloomberg U.S. Corporate Bond Index, which measures the performance of the investment-grade corporate bond market. It has an average maturity and adjusted duration of 11.25 years and 7.33 years, respectively. SPBO has gathered $491.3 million in its asset base and trades in an average daily volume of 200,000 shares. It has a Zacks ETF Rank #3.
Schwab 5-10 Year Corporate Bond ETF SCHI - Expense ratio: 0.03%
Schwab 5-10 Year Corporate Bond ETF offers exposure to the intermediate-term U.S. corporate bond market with an effective duration of 6.20 years and an average maturity of 7.60 years. The fund holds 1,930 securities in its basket and follows the Bloomberg US 5-10 Year Corporate Bond Index. Schwab 5-10 Year Corporate Bond ETF has amassed $380.6 million in its asset base and trades in an average daily volume of 125,000 shares.
Schwab Long-Term U.S. Treasury ETF SCHQ - Expense ratio: 0.03%
Schwab Long-Term U.S. Treasury ETF offers exposure to the long-term U.S. Treasury bond market and follows the Bloomberg US Long Treasury Index. It holds 73 bonds in its basket with average maturity and effective duration of 23.4 years and 16.3 years, respectively. SCHQ has gathered $185.8 million in its asset base and trades in an average daily volume of 102,000 shares. It has a Zacks ETF Rank #4 (Sell).
Franklin U.S. Equity Index ETF USPX - Expense ratio: 0.03%
Franklin U.S. Equity Index ETF tracks the Morningstar US Target Market Exposure Index, which targets large and mid-capitalization U.S. stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization. It holds 628 stocks in its basket with AUM of $622.7 million. Franklin U.S. Equity Index ETF trades in an average daily volume of 150,000 shares.
SPDR Portfolio Aggregate Bond ETF SPAB – Expense ratio: 0.03%
With AUM of $6.5 billion, SPDR Portfolio Aggregate Bond ETF tracks the Bloomberg U.S. Aggregate Bond Index with an adjusted duration of 6.22 years and an average maturity of 8.64 years. It offers comprehensive exposure to U.S. dollar-denominated investment-grade bonds, including government bonds, corporate bonds, mortgage pass-through securities, commercial mortgage-backed securities and asset-backed securities. SPDR Portfolio Aggregate Bond ETF trades in an average daily volume of 4.1 million shares.
Schwab U.S. Aggregate Bond ETF SCHZ – Expense ratio: 0.03%
Schwab U.S. Aggregate Bond ETF offers exposure to U.S. investment grade, taxable bond market, including U.S. Treasuries, government-related and corporate bonds, mortgage pass-through securities, commercial mortgage-backed securities and asset-backed securities that are publicly available for sale in the United States. It tracks the Bloomberg US Aggregate Bond Index with an effective duration of 6.54 years and an average maturity of 8.78 years. Schwab U.S. Aggregate Bond ETF has amassed $6.8 billion and trades in a volume of 1.1 million shares a day on average.
Vanguard Large-Cap ETF VV – Expense ratio: 0.04%
Vanguard Large-Cap ETF follows the CRSP US Large Cap Index and holds a well-diversified 580 stocks in its basket. The fund has AUM of $25 billion and trades in an average daily volume of 601,000 shares. VV has a Zacks ETF Rank #3 with a Medium risk outlook.
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SoFi Select 500 ETF (SFY): ETF Research Reports
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
Vanguard S&P 500 ETF (VOO): ETF Research Reports
Vanguard LargeCap ETF (VV): ETF Research Reports
Vanguard Total Bond Market ETF (BND): ETF Research Reports
Schwab U.S. Aggregate Bond ETF (SCHZ): ETF Research Reports
iShares Core U.S. Aggregate Bond ETF (AGG): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
Schwab ShortTerm U.S. Treasury ETF (SCHO): ETF Research Reports
Schwab U.S. Broad Market ETF (SCHB): ETF Research Reports
iShares 05 Year TIPS Bond ETF (STIP): ETF Research Reports
iShares Core S&P Total U.S. Stock Market ETF (ITOT): ETF Research Reports
Schwab U.S. LargeCap ETF (SCHX): ETF Research Reports
Schwab IntermediateTerm U.S. Treasury ETF (SCHR): ETF Research Reports
SPDR Portfolio S&P 500 ETF (SPLG): ETF Research Reports
SPDR Portfolio Aggregate Bond ETF (SPAB): ETF Research Reports
SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM): ETF Research Reports
JPMorgan BetaBuilders U.S. Equity ETF (BBUS): ETF Research Reports
SPDR Portfolio Corporate Bond ETF (SPBO): ETF Research Reports
Schwab 510 Year Corporate Bond ETF (SCHI): ETF Research Reports
Schwab 15 Year Corporate Bond ETF (SCHJ): ETF Research Reports
Schwab LongTerm U.S. Treasury ETF (SCHQ): ETF Research Reports
BNY Mellon US Large Cap Core Equity ETF (BKLC): ETF Research Reports
iShares Morningstar U.S. Equity ETF (ILCB): ETF Research Reports
Franklin U.S. Equity Index ETF (USPX): ETF Research Reports
