So i'm sure you guys are familiar with Indexes or you have at least seen them And maybe you didn't realize it was an Index but now you're going to understand What an index actually is so an index Summarizes the performance of a group of Securities and major stock indexes Summarize the performance of a group of Stocks the major indexes are sorted by Certain classifications such as the Exchange that they trade on or the Market region so the purpose of these Major stock indexes is to get an idea of The overall performance of the market And it is also a way to benchmark the Performance of individual stocks or Other indexes to these major stock Indexes Now while there are also these major Stock indexes there are specific sector And industries That are indexed as well so you can Track the performance of them and Benchmark them against these larger Stock indexes So the first one is the nasdaq and it's Very common and the nasdaq composite is The name of the index that tracks the Nasdaq stock exchange so the nasdaq Composite tracks the performance of all The stocks listed on the nasdaq stock Exchange and if you wanted to look this Up it is the symbol ixic Now if you were looking to find an index
Fund where you could invest and Basically track the performance of the Nasdaq the fidelity nasdaq composite etf Tracks the performance of the nasdaq Composite index so the symbol for that Is one q And this is uh basically an index fund That's going to replicate the Performance of the nasdaq composite Now an equally common index is the new York stock exchange and the new york Stock exchange composite tracks the Performance of all the stocks listed in The new york stock exchange and if you Wanted to look up the new york stock Exchange you could just type in nyse or The symbol is nya now what is Interesting is there is no index fund That directly follows the new york stock Exchange composite there used to be two Of them but i believe they've been Phased out because there was no index That i could find where it directly Replicated the performance of the new York stock exchange if anybody knows of One and i'm incorrect with the statement Make sure you let me know in the Comments below but i did do a lot of Research and i just couldn't find one However if you're looking to have Exposure to stocks on the new york stock Exchange one of the best options is the Vanguard 500 which we're actually going To talk about later but that actually
Tracks the performance of the s p 500 Which is the 500 largest stocks listed On the nasdaq and new york stock Exchange so you could get some exposure Through a vanguard 500 fund next we have The djia or the dow jones industrial Average and we talked about this index Earlier on but this index basically Tracks 30 large american publicly traded Companies and there are a lot of Requirements that go into being listed Or recognized on the dow jones Industrial average so on occasion the Companies listed on the djia do change But for the most part many of them stay On that list unless something major Happens Now many people use the dow jones Industrial average as a list of blue Chip stocks and if you were looking to Get some direct exposure to the dow Jones industrial average there is an Spdr dow jones industrial average Exchange traded fund that is going to Replicate the performance of the dow Jones industrial average and if you are Looking into that the symbol for that is Dia So the next index is the s p 500 or the Standard and poor's 500. now this is an Index that it tracks the largest 500 Companies on the new york stock exchange And nasdaq exchange based on market Capitalization and you could just type
In s p 500 or if you type in the symbol I n x it will give you that and as we Said my favorite way to invest in the s P 500 is through the vanguard 500 fund You're going to find when you're doing Your research that vanguard has the Cheapest expense ratio out there it is Very difficult to find an index fund That beats the expense ratio of vanguard Now as we said companies listed on the s P 500 and dow jones industrial average Do change on occasion you're going to See more changes on the s p 500 than you Will the dow jones industrial average Just because the s p 500 is a mix of 500 Companies and the dow jones industrial Average is just 30. so then we have the Russell 2000 maybe a little bit less Common i'm not sure if you guys have Heard of this one if you've been looking At indexes for a while i'm sure you've Come across this index But if you're looking for this index you Could type in the symbol rut or just Type in the russell 2000 but this tracks The performance of 2 000 small cap Companies in the russell 3000 index Which is under the symbol rua Now the russell 3000 is an index of the 3 000 largest listed u.s stocks and the Russell 2000 is going to be the bottom 2 000 of those 3 000 in terms of market Capitalization because this is an index That tracks small cap companies so the
Russell 2000 is basically used as a Benchmark for the performance of small Cap stocks or growth stocks and the Vanguard russell 2000 etf is a great way To invest in the russell 2000 so the Symbol for that vanguard fund is b2 or Vtwo and this is a fund that's going to Mimic the performance of the russell 2000 and give you some small cap growth Exposure so this is a great index fund Very low fee index fund if you're Looking to get exposure to small cap Stocks So then we have the wilshire 5000 now The wilshire 5000 the symbol for this is Actually w5000 This includes all stocks that are based Out of the united states actively traded On an american exchange and have pricing Information available to the public So essentially the wilshire 5000 is an Index that tracks the performance of all Stocks actively traded in the united States And the best way to invest in the whole Us market through an etf would be the Vanguard total stock market etf known as Vti And this is going to mimic the Performance of the wilshire 5000 because It is giving you exposure to the entire U.s market so i'm sure at this point i Have at least captivated your interest In etfs or these exchange traded funds
And i wanted to give you guys a list of My favorite funds and yes they are all Vanguard i am partial to vanguard simply Because their expense ratio is lower Than any i've ever found and there's Data to back this up as well but i want To share with you guys basically what my 12 favorite etfs are that vanguard Offers and i'm also going to go over a Few other examples but number one and This is in no particular order you have The vanguard s p 500 etf v o o which is Going to give you exposure to the s p 500 now we just talked about v t i the Vanguard total stock market etf that's Going to give you exposure to the whole Us market and if you didn't catch on in The red there is the expense ratio so First of all the vanguard 500 and vti Have an expense ratio of 0.04 percent so very low Next up we have the vanguard mid cap and Vanguard small cap etfs uh the vanguard Mid cap is vo and the small cap is vb And each of these have a 0.6 percent Expense ratio Now if you want global exposure which You should you might consider looking at The vanguard all world except the us etf And that is v eu Expense ratio is a little bit higher at 0.11 percent but that is still very low Now if you wanted small cap global Exposure that didn't include the u.s
There is the vanguard all world exempt Us or except the u.s small cap etf vss With an expense ratio of 0.13 Now another fund that i like as well is The vanguard emerging markets etf which Gives you exposure to emerging markets And this is under the symbol vwo and They have a 0.14 percent expense ratio Now if you want to invest in a total Global market there is vt which is Vanguard total world stock etf And that is that 0.11 expense ratio and Then if you want to invest in bonds or Assets outside of stocks in a fund Vanguard has a total bond market etf Which is the symbol bnd at a 0.05 Percent expense ratio very low expense Ratio there they also have a great Investment grade bond fund there the Vanguard long-term bond etf which is the Symbol blv at a 0.07 still very low And then we're going to talk about Investing taxes coming up soon but What's interesting is they actually have A vanguard tax exempt bond etf which Solely invests in municipal bonds which Are tax exempt so if you want to lower Your taxes from investments you might be Interested in the vanguard tax exempt Bond etf and the symbol for that is bteb At an expense ratio of 0.09 percent and They also have a reit a real estate Investment trust and the vanguard reit Etf is under the symbol v and q
And that currently has a 0.12 expense Ratio so these are my favorite etfs and These are all ones that allow you to Capture The larger markets themselves now we're Going to go into a couple of the Specialty and sector etfs that they have Offered through vanguard so if you Wanted to invest in a specific sector And get exposure to a group of Industries you can invest in a sector Etf and i want to give you guys a few Examples of the ones that vanguard Offers first of all consumer Discretionary etf That again would be one that is a Cyclical industry because these are our Discretionary expenses Consumer staples that would be a Defensive industry because our staples Are the things that we need no matter What they're the things that we buy Regardless of the underlying economy There's an energy etf there's a Financials etf and a healthcare etf and There's a few more we're going to go Over right now they also have an Industrials etf an information Technology etf a materials etf and we Already talked about that reit exchange Traded fund to get some real estate Exposure they also have Telecommunications services etf and then A utilities etf and every single one of
These sector etfs has an expense ratio Of 0.10 percent except for the reit etf Which is considered to be a specialty Etf that has an expense ratio of 0.12 Now you may be asking yourself what if i Want to invest in a fund that tracks an Industry not just a sector well i'm Going to answer that question for you Right now my favorite way to go about Doing this is to use a website called Etf.com they have a tool called the Sector etf channel so basically what This tool does for you is it allows you To sort through over 400 etfs and find An exchange traded fund that tracks the Performance of an individual sector or Industry that you are looking for so the Site is etf dot com slash channel Sectors and remember guys you can Download all these powerpoints so if you Wanna you know download that or copy and Paste that link you can do that through The pdf But as you can see here there are all Kinds of different segments that you can Invest in and you're also going to find Uh leveraged etfs and inverse etfs here As well which i don't recommend those But this is just a great tool i like Using this tool a lot because you can Sort through different segments which is Your sectors versus industries you can Sort through the expense ratio as well As the issuer and it's a really good way
To find good etfs if you're looking for More specific exposure to a particular Industry or you're looking to invest in A sector and you can't find a fund Through a Supplier like vanguard
