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Why US Investors Are Smart [Infographic]
To prove the point that US investors are behaving intelligently on the whole, we analyzed over 2,000 ETFs sold in the US only, with the total market value of over $3 Trillion.
Almost 80% of the ETF assets are invested in equity ETFs, which have the highest return: 8% over the last 5 years vs. 4% for the average ETF. So the majority of the assets are producing high returns.
The top 37 ETFs that have combined assets of $1.5 trillion (or half of the entire US ETF market) have an average expense ratio of 0.15% vs. 0.59% for all ETFs.
They also have an average 5-year return of 10% vs. 4% for the average ETF, and 1-year return of 15% vs. 11% for the average ETF.
See the infographic below.
There are some other observations we'd like to share with you. Savvy ETF investors shun currency, commodity and alternatives ETFs, which have an average return of -9% (or below) over the last 5 years.
ETF investors are also reserved about fixed income: only 18% of all assets fall in this bucket, and an average return is less than 2%.
So if you're a savvy investor, put your money in high-asset, low-cost, high-performing ETFs aligned to a board market index.
Don't let the buzz on Stocktwits and Seeking Alpha influence your investment decisions.
And remember to include international (non-US) ETFs in your portfolio.