3 ETFs to Diversify Your Portfolio and Minimize Risk


  • Here are three ETFs to diversity your portfolio and minimize risk.
  • ProShares Bitcoin Strategy ETF (BITO): A great way to get exposure to the explosive growth in cryptocurrencies.
  • Vanguard Information Technology ETF (VGT): Ride the rebound in tech stocks with this ETF.
  • SPDR Portfolio Europe ETF (SPEU): Diversify a portfolio with this European-focused exchange-traded fund.
ETF stocks - 3 ETFs to Diversify Your Portfolio and Minimize Risk

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ETF stocks have a lot of advantages. They provide investors with exposure to a wide assortment of stocks, creating diversification and less risk in the process.

ETFs can also be a great way for investors to gain access to a particular segment of the economy or a specific market. And, ETFs charge fewer fees than actively managed mutual funds.

These facts help to account for the fact that more and more investors are relying on ETFs to grow their nest egg. At the end of 2022, Americans had $6.5 trillion invested in exchange-traded funds, according to data from the Investment Company Institute.

That’s a massive amount of money and it is only getting larger as people realize the many benefits offered by ETFs as an investment vehicle. Here are three ETFs to diversity your portfolio and minimize risk.

BITO ProShares Bitcoin Strategy ETF $17.41
VGT Vanguard Information Technology ETF $384.36
SPEU SPDR Portfolio Europe ETF  $39.65

ProShares Bitcoin Strategy ETF (BITO)

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Cryptocurrencies have been the top-performing asset class this year, trouncing the returns of stocks, bonds and commodities.

A great way for investors to play the current rally in crypto is through the ProShares Bitcoin Strategy ETF (NYSEARCA:BITO). The BITO exchange-traded fund (ETF) provides exposure to Bitcoin (BTC-USD) via futures contracts. It doesn’t track the spot price of BTC. Instead, this ETF tracks the price of future-dated Bitcoin index futures.

In some ways, the structure of the BITO ETF is beneficial to investors as it lowers the risk associated with investing directly in physical Bitcoin. Still, the share price of the ProShares Bitcoin Strategy ETF has closely tracked the price movements of BTC, which is the largest cryptocurrency by market capitalization.

Year to date, BITO is up 65%, which is a little less than the rise in Bitcoin. This ETF charges a comparatively low expense ratio of 0.95%, which is another selling feature.

Vanguard Information Technology ETF (VGT)

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Close behind crypto in terms of performance this year have been technology stocks. After a brutal selloff in 2022, tech stocks have risen dramatically in the last six months.

The tech-laden Nasdaq index has gained 16% so far in 2023 and broke above the 12,000 mark for the first time in a year. Doing a little better than the gains in the Nasdaq is the Vanguard Information Technology ETF (NYSEARCA:VGT) that is up 19% on the year.

VGT holds a total of 364 stocks, almost all of them large cap technology concerns. The three biggest holdings in the fund are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA).

As is always the case with Vanguard, the VGT ETF charges a rock bottom expense ratio, in this case just 0.10%. This ETF also offers a quarterly dividend payment of 77 cents per share. This is a great ETF for investors to own as technology stocks come make into favor.

SPDR Portfolio Europe ETF (SPEU)

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Another area of strength this year has come from European stocks. Several indices in Europe have hit new highs in recent months, fueled by improving sentiment.

In February of this year, England’s FTSE 100 index closed above the 8,000 level for the very first time.

Investors looking to gain exposure to Europe should consider a position in the SPDR Portfolio Europe ETF (NYSEARCA:SPEU).

SPEU tracks the STOXX Europe Total Market index and top holdings in the ETF include Nestle (OTCMKTS:NSRGY), Novo Nordisk (NYSE:NVO) and LVMH (EPA:MC), to name only a few. In the last six months, the SPEU ETF has risen 26%, including a 12% gain this year.

The expense ratio on this ETF is even lower than one can find with Vanguard at just 0.09%. It also offers a decent dividend yield of 3.13%. All told, the SPDR Portfolio Europe ETF offers a great way to diversify a portfolio with international stock exposure in a safe market.

On the date of publication, Joel Baglole held long positions in AAPL, MSFT and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Article printed from InvestorPlace Media, https://investorplace.com/2023/05/3-etfs-to-diversify-your-portfolio-and-minimize-risk/.

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