Better ETF for Beginners: ITOT's Broad Market Exposure vs. VTV's Low-Risk Stability
On the other hand, VTV's focus on established value stocks may provide a stronger hedge against economic and stock market volatility and also generates a slightly higher dividend yield, which may appeal to income investors or those who want to reinvest those gains for further upside.
Both ITOT and VTV are considered excellent foundational ETFs for most investors, and their low expense ratios and broad coverage mean you can buy into the market without committing yourself to closely following the fluctuations in specific sectors or companies.
Glossary
ETF: Exchange-traded fund; a basket of securities traded on an exchange like a stock.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges its investors.
Dividend yield: Annual dividends paid by a fund or stock divided by its current price, shown as a percentage.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
AUM: Assets under management; the total market value of assets a fund manages.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a specific period.
Large-cap: Refers to companies with a large market capitalization, generally over $10 billion.
Value stocks: Shares of companies considered undervalued compared to their fundamentals, often with lower growth expectations.
Growth stocks: Shares of companies expected to grow earnings or revenue faster than the market average.
Blue chips: Well-established, financially sound companies with a history of reliable performance.
Cyclical sectors: Industries whose performance tends to follow the overall economy's ups and downs.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Sarah Sidlow has positions in Apple, Berkshire Hathaway, Johnson & Johnson, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, JPMorgan Chase, Microsoft, Nvidia, and Vanguard Index Funds - Vanguard Value ETF. The Motley Fool recommends Johnson & Johnson and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Better ETF for Beginners: ITOT's Broad Market Exposure vs. VTV's Low-Risk Stability was originally published by The Motley Fool
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