10 Best ETFs to Buy for an All-Weather Portfolio

It used to be that investors asked themselves the question, “How many mutual funds should I have in my portfolio?” They still ask the same question of diversification, but more in terms of exchange-traded funds (ETFs).

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It used to be that investors asked themselves the question, “How many mutual funds should I have in my portfolio?” They still ask the same question of diversification, but more in terms of exchange-traded funds (ETFs).

A portfolio of just two ETFs might be perfect for the do-it-yourself investor who has no interest in researching the ins and outs of 100 different funds. However, it might not be ideal for the person who has millions of dollars to invest and loves reading ETF fact sheets. Everyone is different.

Famed mutual fund portfolio manager Peter Lynch coined the term “diworsifcation” while discussing how companies expand into businesses they know very little about, ultimately hurting the core business in the process. But you can achieve something similar by stockpiling too many ETFs, as the typical fund has hundreds of securities, leading to overlapping positions of individual stocks.

David Swensen, the chief investment officer of Yale University’s endowment fund since 1985 and arguably one of the best investment managers in American history, has a model portfolio that includes six different asset classes: Domestic equities (30% weighting), International equities (15%), emerging markets (10%), Treasury inflation-protected securities (TIPS) (15%), U.S. Treasuries (15%) and REITs (15%).

We’ll stay close to that model with this diverse but concise list of 10 ETFs to buy, including six equity ETFs, two fixed-income ETFs and two alternative asset ETFs.

Data is as of Aug. 29, 2018. Click on ticker-symbol links in each slide for current share prices and more.

Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.