Screened ETF List
This screened ETF list is based on a combination of features that are often requested by more cautious equity investors:
- funds with history and reasonable liquidity
- acceptable expense ratios for the type of portfolio
- not too much volatility for the return
- some current yield
- better total returns than bonds
The funds in the list are not recommendations. They are simply idea possibilities for do-it-yourself investors who may find the particular screening criteria useful.
The funds do not represent a full spread of the asset classes which we believe should be in a well designed portfolio.
The universe from which they were filtered is the entire database of hundreds of ETFs at www.IndexUniverse.com.
Important Note:
The fact that cautious investors ask the kinds of questions on which the filter is based, does not mean the funds that make it through the filter are conservative or necessarily good investments. In fact, some of them are aggressive, and some may be poor investments.
It is a raw filtered list of ETFs for further evaluation. Our intent is to save the “do-it-yourself ” investor time and effort by eliminating the hundreds of funds that don’t meet the criteria of the filter.
“Seasoning”:
A much longer list of funds would be generated if the three-year data requirement were modified to include index funds tracking indices that themselves have three-years of data. We believe that three years of “seasoning” is an important selection factor in a world with so many choices, but a new index fund following an established index with its own published history of three years or more can reasonably be seen as “seasoned” for three years.
Richard Shaw
QVM Group LLC
May 16th, 2008 at 12:01 pm
A reader asked, “What figure is ‘reasonable’ liquidity in your opinion?”
That’s a good question.
Personally, I like to see a rapidly moving tape for investments I make for myself or others.
For this screen I was more forgiving. I used the 1-minute charts and wanted to see all or most minutes with trading activity. I did it visually without a bright line test.
There are many newer ETFs with interesting objectives, but with so little trading that you may wait too long for a limit buy to execute and maybe longer for your limit sell to execute.
I don’t like being trapped in a position, even for long term investments. Eventually, exiting will be the, goal and then the time horizon will be short to immediate.
The best situations would allow you to exit whenever you please.
Market orders on thinly traded ETFs are not a good idea.
You might find unattractive Bid-Ask spreads in cases where trading is sporadic or limited.
Reasonable size is also determined by the investor’s bite size.
Someone who wants to put $10,000 into a position has different criteria than someone who wants to put $100,000 or $500,000 into a position.
I certainly would not be willing to be more than 10% of a single day’s trading under any circumstance, and would prefer to be closer to 1% or unobservable in the volumes.