Exchange Traded Fund (ETF) Investment Strategies and Funds to Consider – iShares Select Dividend ETF (NASDAQ:DVY)

A good ETF strategy will depend on your investment goals, risk tolerance and time horizon. However, here are some general principles to keep in mind when developing an ETF strategy:

Index based strategy: This strategy involves investing in ETFs that track a specific index, such as the S&P 500 or Nasdaq 100. The advantage of this strategy is that it provides broad market exposure with low expense ratios. By investing in index-based ETFs, you can tap into the overall performance of the stock market without having to pick individual stocks. Index-based ETFs are typically designed to provide a diversified portfolio of stocks that represent a specific market or industry sector.

• SPDR S&P 500 ETF Trust (NYSE: SPY ): This ETF tracks the S&P 500 index, which is a benchmark of 500 large-cap U.S. stocks. Year-to-date, the ETF has returned around 9% (as of April 2023).
• iShares Russell 2000 ETF (NYSE: IWM ): This ETF tracks the Russell 2000 Index, which is a benchmark of 2,000 small-cap U.S. stocks. Year-to-date, the ETF has returned around 11% (as of April 2023).

Sector strategy: This strategy involves investing in ETFs that track a specific sector, such as technology, healthcare or energy. This can be a good way to get targeted exposure to specific industries. Sector-based ETFs allow investors to invest in specific areas of the market that they believe will perform well in the future. This can be a good way to diversify your portfolio and potentially increase your returns. However, sector-based ETFs can be riskier than index-based ETFs because they are concentrated in a specific sector.

• Technology Select Sector SPDR Fund (NYSE: XLK ): This ETF tracks the technology sector of the S&P 500 index, which includes companies such as Apple, Microsoft and Facebook. Year-to-date, the ETF has returned around 8% (as of April 2023).
• Select Healthcare Sector SPDR Fund (NYSE: XLV)): This ETF tracks the healthcare sector of the S&P 500 index, which includes companies such as Johnson & Johnson and Pfizer. Year to date, the ETF has returned around 10% (as of April 2023).

Dividend based strategy: This strategy involves investing in ETFs that focus on high dividend stocks. This can be a good way to generate regular income from your investments. Dividend-based ETFs provide exposure to stocks that have a history of paying high dividends to their shareholders. These stocks are usually well-established, financially sound companies with a long history of consistent dividends. Dividend-based ETFs can provide investors with a steady source of income that can be especially helpful in retirement.

• iShares Select Dividend ETF (NASDAQ:DVY): This ETF tracks the performance of U.S. stocks that have a history of consistently paying high dividends. Year to date, the ETF has returned around 12% (as of April 2023).
• SPDR S&P Dividend ETF (NYSE:SDY): This ETF tracks the performance of U.S. stocks that have a history of consistently paying dividends. Year-to-date, the ETF has returned around 11% (as of April 2023).

International strategy: This strategy involves investing in ETFs that provide exposure to international markets, such as emerging markets or developed markets outside the US. This can be a good way to diversify your portfolio globally. International ETFs allow investors to invest in markets outside the US. This can provide diversification benefits and potentially higher returns as foreign markets can sometimes outperform US markets. However, investing in international markets may expose investors to currency and political risk.

• iShares MSCI EAFE ETF (NYSE: EFA ): This ETF tracks the performance of developed market stocks outside of North America, including companies in Europe, Asia and Australia. Year-to-date, the ETF has returned around 8% (as of April 2023).
• iShares MSCI Emerging Markets ETF (NYSE:EEM): This ETF tracks the performance of stocks in emerging markets, including companies in China, India and Brazil. Year to date, the ETF has returned around 3% (as of April 2023).

A bond-based strategy: This strategy involves investing in ETFs that track a specific bond market, such as US Treasuries or corporate bonds. This can be a good way to generate fixed income with low risk. Bond-based ETFs invest in a portfolio of bonds that provide a fixed rate of return to investors. This can be particularly useful for investors looking for a low-risk investment that provides a regular stream of income. Bond-based ETFs can also help diversify a portfolio because they tend to be less volatile than stocks.

• iShares Core US Aggregate Bond ETF (NYSE:AGG): This ETF tracks the performance of the US investment grade bond market. Year-to-date, the ETF has returned around 2% (as of April 2023).
• Vanguard Total Bond Market ETF (NASDAQ:BND): This ETF tracks the performance of the US investment grade bond market. Year to date, the ETF has returned around 1% (as of April 2023).