While the benchmark S&P 500 index may be up nearly 8% for the year, recent pensiveness in the market incentivizes consideration of safe ETFs to buy. Fundamentally, exchange-traded funds offer relative protection thanks to their broad footprint. By entering the market with several market ideas, you stand a better chance of success.
Not to break the fourth wall but have you ever seen a list of 7 stocks to buy and thought to yourself, wouldn’t it be great to buy all seven securities? With these ETFs to buy for safety, you can basically do just that. You pick a theme that you’re most interested in and find the fund that aligns with your goals. To be fair, these funds do have one drawback: the losers can mitigate or even drag down the winners. Nevertheless, a wider canvas may be appropriate under current circumstances. Therefore, investors should focus on the below safe ETFs to buy.
SPDR S&P 500 ETF Trust (SPY)
While the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) might not be the most imaginative fund out there, if you’re looking for safe ETFs to buy, this is the place to start. According to its prospectus, the SPY seeks to corresponding generally to the price and yield performance of the S&P 500. Since the Jan. opener, the SPY gained a hair over 8%. That’s conspicuously a tick higher than the index it’s tracking.
In terms of holdings, the SPY ranks among the ETFs to buy for safety because of its exposure to established enterprises. Up top stands consumer technology giant Apple (NASDAQ:AAPL) with 7.45% of net assets. In a close second place comes Microsoft (NASDAQ:MSFT) at 6.71%. Rounding out the top three sits e-commerce pioneer Amazon (NASDAQ:AMZN) at 2.84%.
For sector weighting, technology dominates the SPY with an allocation of 26.83%. Down considerably further is the healthcare segment at 14.5%. That’s followed closely by financial services at 12.28%. Finally, the SPY’s expense ratio lands at 0.09%. In contrast, the category average stands at 0.43%.
Invesco S&P 500 High Div Low Volatility ETF (SPHD)
During times of uncertainty, acquiring enterprises that offer strong dividends can be incredibly comforting. Of course, not every investor has the time to filter out the winners from the losers. But that’s where the Invesco S&P 500 High Div Low Volatility ETF (NYSEARCA:SPHD) may prove invaluable. According to its prospectus, the SPHD seeks to track the investment results of the S&P 500 Low Volatility High Dividend Index.
Ranking among the safe ETFs to buy, the top holding is a major tobacco company, carrying 3.27% of total net assets. In second place stands a top player in the telecommunications space, with 3.02% of net assets. As a side note, I own shares of the two enterprises above so I’m avoiding naming the companies. In third place is Verizon Communications (NYSE:VZ) at 2.88% of net assets. For sector weighting, the SPHD mostly targets real estate with an allocation of 18.23%. In second place is the utilities sector at 17.43%, followed by consumer defensive at 11%. Lastly, SPHD’s expense ratio is 0.3%, which is a bit on the higher side. The category average is 0.39%.
Consumer Staples Select Sector SPDR Fund (XLP)
For the ultimate in ETFs to buy for safety, the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP) makes for a tempting proposition. According to its prospectus, the XLP generally corresponds to the price and yield performance of securities listed in the Consumer Staples Select Sector Index. Since the beginning of this year, XLP gained nearly 4% of equity value.
Regarding top holdings, Procter & Gamble (NYSE:PG) perhaps unsurprisingly took pole position with 14.27% of total net assets. In a relatively close second place sits soft drink icon PepsiCo (NASDAQ:PEP) at 10.51%. Fittingly, third place belongs to PepsiCo rival Coca-Cola (NYSE:KO) at 9.71%. For sector weighting, the consumer defensive space naturally dominates at 98.99% of the total allocation. The rest goes to healthcare. Geographically, 100% of all held securities originate in the U.S.
In closing, the expense ratio of the XLP lands at 0.1%. That’s very attractive compared to the category average of 0.46%. Therefore, it’s one of the safe ETFs to buy, along with being one of the cheapest.
Vanguard Utilities Index Fund ETF (VPU)
When faced with an uncertain market environment, utilities offer an excellent place to park your money. Fundamentally, it comes down to the concept of the natural monopoly. While any enterprise can compete with utility providers, the barriers to entry are so steep that most don’t even bother. It’s this same idea that helps undergird the Vanguard Utilities Index Fund ETF (NYSEARCA:VPU).
A top idea for safe ETFs to buy, Vanguard’s most prominent individual holding is NextEra Energy (NYSE:NEE) with 13.8% of total net assets. In a rather distant second is Southern Company (NYSE:SO) at 6.83%, followed right behind by Duke Energy (NYSE:DUK) at 6.69%. Of course, the VPU focuses almost exclusively on the utilities sector with a 99.4% allocation. However, the energy and technology sector make up the rest at 0.45% and 0.15%, respectively. All of the securities originate in the U.S. Lastly, the VPU’s expense ratio comes in at 0.1%. This figure offers a significant discount to the category average of 0.43%.
Invesco QQQ Trust Series 1 (QQQ)
While the tech ecosystem tends to carry a higher growth profile (and thus carries higher risk), the famous Invesco QQQ Trust Series 1 (NASDAQ:QQQ) could rank among the safe ETFs to buy. Basically, with the QQQ fund, you can spread out your wagers across a wide canvas, improving odds of success. Notably, since the January opener, QQQ gained nearly 23% of market value.
In terms of individual holdings, Microsoft commands the top spot with 12.6% of total net assets. Coming right on its heels is Apple at 12.49%. Noticeably further down is Amazon at 6.52%. However, the QQQ also includes other intriguing internet technologies and semiconductor firms.
Breaking down the sector weightings, tech obviously dominates with an allocation of 49.47%. However, the QQQ fund is rather diversified, carrying significant exposure to communication services (16.54%) and consumer cyclical (14.85%). Although the vast majority (97.9%) of firms call the U.S. home, the rest of the holdings cover Europe, emerging Asia and Latin America.
Finally, the QQQ’s expense ratio sits at 0.2%, well below the category average of 0.52%. Thus, it’s one of the intriguing ETFs to buy for safety.
Schwab International Equity ETF (SCHF)
Although the U.S. market tends to be the most resilient, investors may want to rotate out of the domestic arena and into the global sector. For that, investors may want to consider the Schwab International Equity ETF (NYSEARCA:SCHF). According to its prospectus, the SCHF seeks to replicate the total return of the FTSE Developed ex US Index. One of the safe ETFs to buy, the fund comprises of large and mid-capitalization enterprises.
If you’re seeking results, the SCHF presents a profile that’s difficult to argue with. Since the beginning of this year, the fund gained almost 10% of market value. In the past 365 days, the SCHF moved up more than 6%. And over the past five years, it gained nearly 3%. Therefore, it’s remarkably consistent, which symbolizes a top attribute these days. For sector weighting, the financial services dominate the holdings with an allocation of 18.27%. That’s followed closely by industrials at 15.8% and healthcare at 11.94%. For geography, the Eurozone dominates with 27.3% coverage. Japan comes in second place at 21.2%.
To close, the SCHF’s expense ratio comes in at 0.06%, noticeably below the category average of 0.35%.
SPDR Gold Trust (GLD)
Garnering criticism from naysayers for being “just” a commodity, gold and other precious metals present controversy within come circles. However, with so many flashpoints to worry about, the yellow metal swung higher this year. Breaching the $2,000 price point again, the SPDR Gold Trust (NYSEARCA:GLD) looks awfully attractive. If you’re not into doomsday bunkers and hoarding food and ammo, the GLD offers a sensible option for safe ETFs to buy.
Since the beginning of this year, the GLD gained over 9% of market value. In the past 365 days, it’s up nearly 11%. Interestingly, over the past five years, the gold-focused fund stormed to almost 53%. If you’re any bit worried about economic and social stability, the GLD has gotten so much more attractive. Relatively speaking, the GLD isn’t just one of the ETFs to buy for safety. Rather, it can also be quite economical. Its expense ratio sits at 0.4%, conspicuously below the category average of 0.69%.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.