How many ETFs should I own?

You can build a complete portfolio with 1–3 ETFs: US stocks, international stocks, bonds. More isn't necessarily better—avoid overlap.

Should I choose Vanguard, iShares, or Schwab ETFs?

All offer excellent low-cost options. Compare expense ratios and coverage. VTI (Vanguard), ITOT (iShares), and SCHB (Schwab) are all great total market ETFs. Pick the cheapest for your broker.

What's a thematic ETF?

A thematic ETF focuses on a theme like clean energy, robotics, or cannabis. They often have higher fees and concentrated risk. Use as a small 'satellite' holding, not your core.

How to Choose the Right ETF for Your Portfolio | Investors Lab

Key Criteria

1. Expense ratio. Lower is better. Broad market ETFs often charge 0.03%–0.15%. Avoid anything over 0.5% unless there's a specific reason.

2. Coverage. What does it hold? S&P 500 = 500 large US companies. Total market = 3,000+. Total world = US + international. Match the index to your goal.

3. Liquidity. High trading volume = tight bid-ask spreads. Popular ETFs like SPY, VOO, QQQ are very liquid.

4. Tracking error. Does the ETF closely follow its index? Check the fund's tracking difference.

Common ETF Categories

US large-cap: S&P 500 or total market
US small-cap: Russell 2000 or similar
International: Developed markets, emerging markets, or total international
Bonds: Total bond, Treasuries, corporate
Dividend: Dividend aristocrats or high-dividend strategies

Pitfalls to Avoid

Theme/sector ETFs: Often have high fees and narrow exposure. Use sparingly.
Leveraged/inverse ETFs: For short-term trading only. Not for buy-and-hold.
Duplicate exposure: Don't hold five overlapping US large-cap ETFs. Pick one core and build around it.

Starter combo: One US total market ETF + one total international ETF + one bond ETF = simple diversified portfolio.