ETF Alternatives: Another option for exposure to large cap U.S. stocks is the Equal Sector Weight ETF (EQL), which maintains equivalent allocations to each of the nine major sectors [see also Equal Weight ETFs: Comparing Similar (But Different) Strategies].
7. PowerShares QQQ (QQQ)
Overview: This popular trading vehicle offers exposure to the tech-heavy NASDAQ.
ETF Alternatives: First Trust’s QQEW is an interesting product; that ETF includes the stocks of the NASDAQ 100, but with an equal weighting (about 1%) assigned to each. The result is a more balanced portfolio that avoids big concentrations in names like Research In Motion and Baidu.
8. Barclays TIPS Bond Fund (TIP)
Overview: The most popular fund in the Inflation Protected Bonds ETFdb Category, TIP is a low risk fund that has become popular in part because of lingering concerns about inflation.
ETF Alternatives: There is no shortage of ETF options for combating inflation; we like WisdomTree’s RRF, which combines exposure to U.S. and international TIPS with commodity exposure.
Short-term TIPS are also intriguing, as these bonds should be less sensitive to interest rate hikes that often accompany climbs in CPI. ETF options in this space include STPZ and STIP.
9. Total Stock Market ETF (VTI)
Overview: For broad exposure to U.S. stock markets, the cost efficient and incredibly deep VTI is tough to beat.