Top ETF Investments to Consider in 2017

Following a strong first quarter with the S&P 500 rising over 7%, the subsequent months have seen a mix of market consolidation and caution. Overall, valuations have become quite high, leading investors to seek safer alternatives. Currently, ETFs (exchange-traded funds) present a more attractive option compared to individual stocks due to their diversification, which helps reduce potential losses and mitigate the impact of poor-performing equities. What investment approach should be adopted for the remainder of the year? Here are some of the best ETF options for 2017:

iShares Core Conservative Allocation ETF (AOK)
Type:

Asset Allocation (Conservative)
Expense Ratio: 0.25%
The iShares Core Conservative Allocation ETF (AOK) is tailored for conservative investors, functioning as a diversified portfolio in a single fund. Asset allocation funds typically blend cash, bonds, and stocks to meet specific investment goals. Conservative funds emphasize bonds over stocks, focusing on stability rather than growth, whereas more aggressive funds lean toward equities.
AOK allocates 1% in cash, 32% in equities, and 67% in fixed-income assets.

It also invests about 35% overseas, with allocations in Germany (3%), U.K. (4%), and Japan (5%). This exposure is gained through various iShares funds, including the iShares U.S. Credit Bond ETF and the iShares Core S&P 500 ETF.

ProShares Short S&P500 ETF (SH)
Type: Inverse Index
Expenses: 0.89%
The ProShares Short S&P500 ETF is suitable for investors who are either bearish on the market or want to hedge existing long positions. This ETF maintains an unleveraged short stance against the S&P 500, aiming to deliver 1% for every 1% decline in the index. It closely tracks an inverse chart of the S&P 500 ETF. However, investors should be aware that due to daily compounding, longer-term returns could differ in magnitude and direction. It’s a useful tool for hedging against market downturns rather than long-term holdings.

Pimco Enhanced Short Maturity ETF (MINT)
Type: Short-Term Bonds
Expenses: 0.35%
For those seeking stability, MINT offers liquid assets with minimal risk, providing a modest income and little growth potential. Its current yield exceeds 1%. The fund’s goal is to outperform money market funds by investing in short-term investment-grade debt from companies like Verizon and Barclays. Over the past five years, it has maintained a stable price range around $100.5 to $101.5, emphasizing safety and liquidity.