three-cheapest-etfs

Which are the three cheapest ETFs? All you need to know

Earlier we read about three costliest ETFs regarding their expense ratio. In this article we will know the three cheapest ETFs regarding their expense ratio

Two of the most successful long-term investment vehicles are mutual funds and exchange-traded funds (ETFs). You may even have some of these in your pension fund.  

However, a part of your portfolio is dedicated to a charge termed an expense ratio each year. It’s critical to understand the costs you’re paying no matter what you’re investing in. 

And, given the prevalence of mutual funds and exchange-traded funds (ETFs), many of us pay an annual expense ratio out of our portfolios. 

What is an Expense Ratio? 

The fee that mutual-fund or exchange-traded fund charges investors is Expense ratio. This charge covers the costs of management, asset allocation, marketing, and other services.  

These charges are calculated as a portion of an investor’s annual cost. ETF expense rates are often less than 1%. That means you spend less than $1 per year on expenses for every $100 you invest.

Three cheapest ETFs in terms of their expense ratio

Rank ETF SymbolExpense Ratio
1 JP Morgan Betabuilders U.S. Equity ETFBBUS0.02%
2 Vanguard Total Stock Market ETFVTI0.03%
3 iShares Core S&P 500 ETFIVV0.03%

JP Morgan Betabuilders U.S. Equity ETF 

BBUS invests in the top 85% of stocks in the US equity market by market capitalization across all sectors. The fund includes large cap and mid-cap stocks.  

Common shares, preferred shares, and REITs are forms of equity securities. BBUS, part of the “BetaBuilders” suite, offers low-cost, plain-vanilla access to US stocks, except for small-cap enterprises, which can be used as a primary investment or complement BBMC or BBIN.  

The fund might invest up to 20% in futures to track the index more closely. The index recalibration is done every three months. The MSCI ESG Fund Rating for JPMorgan BetaBuilders U.S. Equity ETF is AA, with 7.61 out of ten

Performance 

Performance [as of 18/03/22]1 year3 years5 years10 years
BBUS10.62%17.92%
MSCI USA IMI12.14%17.85%15.10%14.24%

The fund invests entirely in the United States. 

Top 10 Holdings 
JP Morgan Betabuilders U.S. Equity ETF  top 10 holdings

Source: etf.com

BBUS details 
BrandJPMorgan
Expense Ratio0.02%
YTD Return-7.79%
AUM$1.05B
Number of Holdings632
Avg. Spread ($)$0.04
Average Daily $ Volume$8.51M

Vanguard Total Stock Market ETF 

VTI is a strong option for buyers or investors looking for broad equity exposure across the market, including micro-caps. The fund is impartial, with no gambles on businesses, sizes, or styles.  

The fund is handled passively and is always fully invested. The ETF has tracked various broad indexes over the years, including Dow Jones, MSCI, and, as of June 2013, CRSP. Its current index closely resembles the MSCI benchmark.  

Like all other Vanguard ETFs, portfolio transparency is reported monthly rather than daily. The MSCI ESG Fund Rating for Vanguard Total Stock Market ETF is AA, with 7.36 out of 10. 

Performance 

Performance [as of 18/03/22]1 year3 years5 years10 years
VTI3.94%15.79%13.74%13.58%
CRSP U.S. Total Market6.94%16.74%14.33%13.73%

The fund invests entirely in the United States. 

Top 10 Holdings 
Vanguard Total Stock market ETF top 10 holdings

Source: etf.com

 VTI details 
BrandVanguard
Expense Ratio0.03%
YTD Return-7.81%
AUM$285.63B
Number of Holdings4033
Avg. Spread ($)$0.03
Average Daily $ Volume$1.22B

iShares Core S&P 500 ETF 

IVV, one of numerous ETFs that reflect the S&P 500 Index, provides good exposure to large-cap stocks.  

Despite popular belief that the S&P 500 index gives pure market-cap access to the US market, the index’s committee has the authority to omit individual companies.  

IVV also has a smaller skew than our benchmark because it trades at a lower market capitalization. Nonetheless, our research shows that these discrepancies are mainly academic, as the fund provides excellent coverage.  

IVV is organized as a 1940 Act Fund, which, in comparison to other structures, makes it more appealing to buy-and-hold investors because dividends are reinvestible.  

The fund issues daily positions. The MSCI ESG Fund Rating for the iShares Core S&P 500 ETF is AA, with 7.79/10. 

Performance 

Performance [as of 18/03/22]1 year3 years5 years10 years
IVV8.98%16.70%14.35%13.97%
S&P 50011.53%17.54%14.91%14.25%

The fund invests entirely in the United States. 

Top 10 Holdings 
top 10 holdings iShares Core S&P 500 ETF three cheapest ETFs

Source: etf.com

IVV details 
BrandiShares
Expense Ratio0.03%
YTD Return-7.13%
AUM$324.85B
Number of Holdings507
Avg. Spread ($)$0.03
Average Daily $ Volume$3.99B
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