In this article, we will talk about the best long-term ETFs to buy in the financial market today. ETFs are short for Exchange Traded Fund, it is a basket of securities such as stocks, commodities, or bonds that can be bought and sold like shares during market hours.
For this page, we have created a list that covers the best long-term ETFs to help you find the right ones for you.
What is a long-term ETF?
ETFs are a type of investment fund that tracks underlying indices. They are a bundle of securities that are grouped up depending on the sector, theme, or region. For example, it can be gold ETFs, emerging markets ETFs, or others. Long-term ETFs can serve as investments. Investing must not be confused with trading since it is a source of generating income in the long run, while traders are looking for a fast profit.
Long-term ETFs are popular because of their risk tolerance, lower costs, and trading flexibility. The US market has around 29 long-term ETFs which have $44.58 billion worth of assets under management. If you think this might be what you were looking for, take a look below at the three easy steps to start investing in the long-term ETFs.
Invest in long-term ETFs in 3 steps
Open a trading account
It is important to research brokers that offer long-term ETFs. It is a good idea to look at their regulations, commissions, fees, deposit methods, and other terms and conditions. When you have made your choice, you can sign up by filling in your personal information. You will receive a verification code - click on it to activate your account.
Choose long-term ETFs
When your account is open and running, you should have full access to the trading platform. However, you can’t place a trade before your account is funded. Look for the button that says “deposit,” and click on your method. Depending on the broker, it can be credit card, debit card, bank wire transfers, or epayments.
Place your trade
After having deposited, you can begin trading. Check your account balance to see if everything is ok. If so, you can go directly to where your trading platform offers you long-term ETFs. You can now buy one or many of them depending on your priorities.
Where can I trade long-term ETFs?
Long-term ETFs can be traded through brokers. There are hundreds of brokers offering their financial services, but each of them is unique. The first step is to understand why you want to trade long-term ETFs, what your goals are, and how you might get to your first milestone.
Regulations are also crucial - they will show you how the broker protects your money, and if your country is in their jurisdiction. Other details you would want to look into are commissions, fees, deposit and withdrawal methods, trading platforms, and the educational section. Take a look at our top 3 selected brokers, which we shortlisted to help you navigate.
Best long-term ETFs to buy now
Now that the basics are covered, we can jump into discussing the best long-term ETFs. These are the best industry ETFs because of their expense ratio, historical performance, and the team behind each ETF.
- TMV - Direxion Daily 20-Year Treasury Bear 3X
- TTT - UltraPro Short 20+ Year Treasury
- TBT - UltraShort Barclays 20+ Year Treasury
- RINF - ProShares Inflation Expectations ETF
- RVNU - Xtrackers Municipal Infrastructure Revenue Bond Fund
- VMBS - Vanguard Mortgage-Backed Securities ETF
- VNQ - Vanguard Real Estate ETF
- PGX - Invesco Preferred ETF
- SPYD - SPDR Portfolio S&P 500 High Dividend ETF
- HYLB - Xtrackers USD High Yield Corporate Bond ETF
TMV - Direxion Daily 20-Year Treasury Bear 3X
Since 2009, TMV has been a non-diversified fund. According to Bloomberg, TMV has an average three-month return of 21.36%. It has a total of $132.73 million worth of assets under management. It offers daily returns through swaps.
TTT- UltraPro Short 20+ Year Treasury
Founded in 2012, TTT tracks an index that follows the performance of US treasury securities. It has $28.36 million worth of net assets and a 0.95% expense ratio. Its average daily trading volume is estimated at $2.97 million.
TBT - UltraShort Barclays 20+ Year Treasury
TBT’s inception date is May 2008, and its legal structure is an open-ended fund. Its expense ratio is 0.92%, and it has $722.61 million worth of assets under management. Its average daily trading volume is $33.97 million. It has 14 holdings in total.
RINF - ProShares Inflation Expectations ETF
Founded in 2012, RINF has 7.28% of yearly daily returns. It has $7.33 million of assets under management while its daily average trading volume is approximately $54.92 thousand. It has a total of 2 holdings. It tracks two indices, one with short exposure to the US Treasury, and another with long exposure to US TIPS.
RVNU - Xtrackers Municipal Infrastructure Revenue Bond Fund
This ETF has been around since 2014, and it is dedicated to the US revenue sector. During 2020, RVNU had an annual daily return of 6.31%. Its one year daily total return is 5.19%. It has 303 holdings and an expense ratio of 0.15%. Its average daily volume is $406.38 thousand.
VMBS - Vanguard Mortgage-Backed Securities ETF
Issued by Vanguard, this ETF was born in 2009. Its one-year daily total return is 3.13%, and in 2020 it had an annual total return of 3.77%. VMBS has a daily trading volume of about $74.28 million and $13.83 billion of assets under management. It has 3,458 holdings from the MBS sector.
VNQ - Vanguard Real Estate ETF
VNQ was founded in 2004. It has a 3-year daily total return of 8.47%. This open-ended fund has $33.00 billion of assets under management and $396.45 million worth of average daily trading volume. It has 168 holdings from the USA.
PGX - Invesco Preferred ETF
Issued by Invesco and created in 2008, PGX has 310 holdings and in 2020 had an annual total return of 7.14%. It has a one-year daily total return of 3.98%. Its expense ratio is 0.52%, its assets under management are valued at $6.92 billion, and its average daily volume is around $57.93 million.
SPYD - SPDR Portfolio S&P 500 High Dividend ETF
SPYD was born in 2015 and has 81 holdings with financials being the leading sector. Its expense ratio is 0.07%, and it has $2.50 billion of assets under management. Its average daily trading volume is valued at around $31.24 million.
HYLB - Xtrackers USD High Yield Corporate Bond ETF
HYLB was created in 2016 under Deutsche Bank as its issuer. It has a total of 1,168 holdings with the industrial being the leading sector. It has an average daily trading volume of $84.67 million and $7.54 billion of assets under management.
Expert tip on investing in long-term ETFs
One of the most important tips is to trust your knowledge and not your emotions. It is possible that emotions overwhelm you at a certain point, and you make a bad choice. It’s better to have a clear mind when choosing your next financial step.
Why trade ETFs?
You could trade long-term ETFs if you are looking for an investment that will bring returns in the long run. ETFs are well known in the market and are becoming increasingly popular because of their diverse portfolio and lower risk. It is also an advantage that they can be traded in the market like shares.
However, it is important to stay alert in the fast-moving market. Breaking news might change the direction of your ETF, so you should have a strong base of knowledge.
Frequently Asked Questions
The number one long-term ETF will depend on the sector you think is best for you. It is always good to look at its performance.
It will depend on your time horizon and risk tolerance. It is also good to ponder over your goals.
Investors who like to see their capital grow in the long run are the ones who invest in long-term ETFs.
ETFs can be made up of shares and can be traded, too. However, shares are a unit of a stock.
Beginners might have no disadvantage over veterans when it comes to knowledge. As long as you study and understand the market, it could be a good idea for you.
According to ETF.com, the long-term ETFs in the US market have $44.58 billion worth of assets under management.