iShares refers to a family of extremely popular ETFs from BlackRock. Here we'll look at some of the best iShares ETFs.
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Introduction – iShares ETFs
Barclays launched iShares funds in 2000 with over 40 ETFs, still considered somewhat novel products at the time. Barclays sold the iShares family in 2009 to BlackRock, the world's largest asset management company. iShares is one of the largest families of ETFs in the world.
For virtually any market segment you can think of, it's likely that iShares has a liquid, low-cost, low-tracking-error product.
Here we'll explore some of the best iShares ETFs.
IVV – iShares Core S&P 500 ETF
IVV is iShares's offering to track the S&P 500 index. It is their most popular ETF, with nearly $250 billion in assets. It provides a comparable substitute for Vanguard's VOO, with a matching fee of only 0.03%.
ITOT – iShares Core S&P Total U.S. Stock Market ETF
Similarly, ITOT provides exposure to the total U.S. stock market and is interchangeable with Vanguard's VTI. This type of substitution is useful for tax loss harvesting without creating a wash sale. ITOT has a fee of only 0.03%.
IXUS – iShares Core MSCI Total International Stock ETF
IXUS is the international (ex-US) version of ITOT above. Like Vanguard's VXUS, It provides exposure to the total international stock market outside the United States, at an expense ratio of 0.09%.
IEFA – iShares Core MSCI EAFE ETF
IEFA gets you access to ex-US Developed Markets and is similar to Vanguard's VEA. This fund is part of iShares's new, low-cost “Core” family of funds. Its expense ratio is 0.07%.
AGG – iShares Core U.S. Aggregate Bond ETF
AGG is a total U.S. bond market fund via the Barclays Capital U.S. Aggregate Bond Index. It is nearly identical to Vanguard's BND. I compared those two funds here. The fund has over $80 billion in assets and an expense ratio of 0.04%.
IEMG – iShares Core MSCI Emerging Markets ETF
IEMG is the iShares Core fund for Emerging Markets. The fund seeks to track the MSCI Emerging Markets Investable Market Index. It is comparable to Vanguard's VWO, but is slightly more expensive with a fee of 11 basis points.
IAU – iShares Gold Trust
USMV – iShares Edge MSCI Min Vol USA ETF
USMV applies an optimization algorithm to hold a basket of low volatility stocks – stocks with less movement than the broader market. This fund has an expense ratio of 0.15%.
QUAL – iShares Edge MSCI USA Quality Factor ETF
QUAL is another factor ETF from iShares and is one of the only funds available to target the Quality factor, which can be considered roughly interchangeable with the Profitability factor. This ETF has an expense ratio of 0.15%.
DGRO – iShares Core Dividend Growth ETF
DGRO is a popular dividend growth ETF from iShares, providing access to companies with a history of an increasing dividend for at least 5 consecutive years. Specifically, the fund seeks to track the Morningstar US Dividend Growth Index. DGRO is similar to but more inclusive than Vanguard's VIG; I briefly compared the two funds here. It has a fee of 0.08%.
HYG – iShares iBoxx $ High Yield Corporate Bond ETF
HYG is the most popular high yield bond fund out there, usually used by income investors. The fund tracks the iBoxx $ Liquid High Yield Index and has an expense ratio of 0.49%.
GOVT – iShares U.S. Treasury Bond ETF
Vanguard doesn't offer a total U.S. treasury bond market product. iShares does, with GOVT. The fund seeks to track the Barclays Capital U.S. Treasury Bond Index, providing broad exposure to U.S. treasuries. The fund has an average effective maturity of 8 years and an expense ratio of 0.15%.
IEF – iShares 7-10 Year Treasury Bond ETF
Vanguard's VGIT for intermediate treasuries has an average maturity of about 6 years. Their next step up is VGLT for long-term treasuries, with an average maturity of 25 years. That's a pretty wide gap. iShares splits that with IEF, which has an average maturity of about 9 years and an expense ratio of 0.15%.
Where To Buy These iShares ETFs
Luckily, all the above iShares ETFs should be available at any major broker. My choice is M1 Finance. The broker has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, intuitive pie visualization, and a sleek, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.
Disclaimer: While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.
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