There are almost 2,000 ETFs in the U.S. Trying to sift through and figure out which ones are worth investing in is arduous.
So we’re building a resource that will surface the top three ETFs in a category and present basic information like AUM, expense ratio, top ten holdings, etc.
We include an ETF’s top ten holdings because it’s important to know what stocks your money is invested in, and ETF titles can be misleading.
If you were bullish on homebuilders, the top two ETFs are ITB (iShares) and XHB (SPDR). But their make-up is totally different.
ITB’s top five positions are Lennar, D.R. Horton, NVR, Pulte Group, and Toll Brothers. All those companies are actually “homebuilders.”
XHB’s top five positions are Masco (building supplies), iRobot (makes robot vacuums), A.O. Smith (makes water heaters), Whirlpool (makes dishwasher), and Fortune Brands (makes faucets and security systems).
There are only TWO homebuilders in the top ten positions. Those companies are in related industries and should benefit if homebuilders prosper but it’s not the same as investing in companies that actually build houses.
The bottom line is there are nuances in these ETFs and we’ll help you parse them out.