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3 Quality ETFs To Build The Foundation Of Your Portfolio

Diversifying your money using ETFs as the backbone of your portfolio

Author

Dividend Dominator
December 23, 2024

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3 Quality ETFs To Build The Foundation Of Your Portfolio

Top U.S Market-Cap Index ETF

Invesco QQQ Trust (QQQ)

Invesco’s QQQ ETF tracks the Nasdaq-100 index, giving you access to the performance of the 100 largest non-financial companies listed in the Nasdaq.

The fund launched in 1999 and is rebalanced quarterly.

Here is the breakdown of the fund:

MER: 0.20%

Number of holdings: 101

Market value: $325.72B

5 Year Return: 144.99%

Top 10 Holdings (Making up 53% of the fund)

  • Apple

  • Nvidia 

  • Microsoft

  • Amazon

  • Meta

  • Broadcom

  • Tesla

  • Costco

  • Alphabet Class A

  • Alphabet Class B

The fund is most heavily weighted in the Tech sector (60%) with consumer discretionary as the second largest allocation (18%). 

Top International ETF

Vanguard’s FTSE Emerging Markets ETF (VWO)

Vanguard’s FTSE Emerging Markets ETF invests in stocks of companies located in emerging markets around the world, including China, Brazil, Taiwan and South Africa. The goal of the fund is to track the return of the FTSE Emerging Markets All Cap China A Inclusion Index.

The fund has a high potential for growth but also comes with risk, as the share price may experience higher volatility than a fund that invests in developed countries like the U.S.

Here is the breakdown of the fund:

MER: 0.08%

Number of holdings: 5,896

Market value: $24.4B

5 Year Return: -0.67% (up 9.9% in the last year)

Top 10 Holdings

  • Taiwan Semiconductor Manufacturing

  • Tencent Holdings

  • Alibaba Group

  • Meituan Dianping Class A

  • HDFC Bank Ltd.

  • Reliance Industries

  • PDD Holdings Inc.

  • Hon Hai Precision Industry Co. 

  • Infosys Ltd.

  • China Construction Bank Corp.

The fund is most heavily weighted in China (30%) with India coming in close second (23%) and Taiwan in third (20%).

Top Dividend ETF

Vanguard’s High Dividend Yield Index ETF (VYM)

Vanguard’s High Dividend Yield Index ETF seeks to track the performance of the FTSE High Dividend Yield Index, which measures the investment return of common stocks of companies characterized by high dividend yields.

It provides investors with a convenient way to track the performance of stocks that are forecasted to have above-average dividend yields.

It’s a passively managed fund and was launched in 2006.

MER: 0.06%

Number of holdings: 536

Market value: $142.2B

5 Year Return: 34.56%

Top 10 Holdings (Making up 25% of the fund)

  • Broadcom Inc.

  • JPMorgan Chase

  • Exxon Mobil

  • The Home Depot

  • Procter & Gamble

  • Johnson & Johnson

  • AbbVie Inc.

  • Walmart Inc.

  • Bank of America Corp.

  • Merck & Co.

The fund is most heavily weighted in the financial services sector (22%) with consumer defensive just behind (13%) and technology coming in 3rd highest weighting (12.5%).

The Growth of $10,000

If you had invested $10,000 in each of these funds 5 years ago ($30,000 total), your portfolio would be worth $47,948 today.

Not bad for holding just 3 ETFs!

Alex (The Dividend Dominator)
Founder and CEO of Dividend Domination Inc.
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