Summary of 5 Top ETFs to BUY for 2025

Summary

In the video titled "5 Top ETFs to BUY for 2025," the presenter, Mark Ruson, outlines five exchange-traded funds (ETFs) that investors should consider for their portfolios in 2025. The emphasis is on the importance of including ETFs as a foundational element in investment strategies, regardless of whether one is focused on growth or dividends. The presenter suggests a portfolio allocation of approximately 30-40% in ETFs.

Main Financial Strategies and Market Analyses

• Diversification vs. Over-Diversification: Ruson emphasizes the need for diversification in portfolios while cautioning against over-diversification, particularly when combining multiple funds that invest in similar assets.
• Focus on High-Quality Holdings: He recommends focusing on high-quality companies within ETFs rather than spreading investments too thinly across numerous low-quality options.
• Sector Analysis: Each ETF discussed has a specific sector focus, which is crucial for investors to understand to avoid overexposure in certain areas.

Top 5 ETFs for 2025

• Schwab U.S. Large Cap Growth ETF (SCHG):
  • Focus: Large-cap growth stocks.
  • Performance: Up nearly 40% over the past 12 months.
  • Sector Breakdown: 48% technology, 14% consumer discretionary, 12% communication services.
  • Expense Ratio: 0.04%.
• Schwab U.S. Dividend Equity ETF (SCHD):
  • Focus: Large value dividend payers.
  • Performance: Up nearly 10% over the past 12 months.
  • Sector Breakdown: 20% financials, 15% healthcare, 14% consumer staples.
  • Expense Ratio: 0.06%.
• iShares Small Cap ETF (IJR):
  • Focus: Small-cap companies.
  • Performance: Up nearly 10% over the past 12 months.
  • Sector Breakdown: Financials, industrials, consumer discretionary.
  • Expense Ratio: 0.06%.
• iShares Cybersecurity and Technology ETF (HACK):
  • Focus: Cybersecurity.
  • Performance: Up roughly 10% over the past 12 months.
  • Sector Breakdown: Predominantly technology.
  • Expense Ratio: 0.47%.
• Select Sector SPDR Utility ETF (XLU):
  • Focus: Utility companies.
  • Performance: Up 23% over the past 12 months.
  • Sector Breakdown: Exclusively utility companies.
  • Expense Ratio: 0.09%.

Methodology or Step-by-Step Guide

• Portfolio Allocation: Consider allocating 30-40% of your portfolio to ETFs.
• Select ETFs Based on Sector Exposure: Choose ETFs that align with your investment focus (growth, dividends, etc.) while monitoring sector exposure to avoid overconcentration.
• Monitor Performance and Rebalance: Keep an eye on the performance of selected ETFs and rebalance as necessary to maintain desired exposure levels.

Presenters/Sources

• Mark Ruson, CPA and financial content creator.
• Sponsored by The Motley Fool.

Notable Quotes

— 07:11 — « I'm upbeat on the sector because we have a Trump 2.0 Administration coming back in what is he looking to do? Bring down regulations, spur the business, spur the economy which could bode well for small cap businesses. »

— 09:38 — « I actually believe that cyber security as a sector could be even larger than that of AI. »

— 11:44 — « When you talk about AI or we talk about supercomputers or data centers needed to support these, they all have one thing in common: they need power. »

Category

Business and Finance

Video