Best blue chip ETFs to buy in 2022
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Blue chip ETFs are funds that invest in a selection of the most stable and established companies in the world. They often contain the largest and best known businesses and offer access to easy diversification. This guide picks five of the best blue chip ETFs for 2022.
What are the top blue chip ETFs to buy?
Our experts have selected five of the top blue chip ETFs for this year listed in the table below. You can scroll lower to find information on each one. Alternatively, open a brokerage account here and invest straight away.
|#||ETF symbol||ETF name||Where to Trade|
|1||SPY||SDPR S&P 500 ETF|
|2||NOBL||Pro Shares S&P 500 Dividend Aristocrats|
|3||EFA||iShares MSCI EAFE ETF|
|4||VUKE||Vanguard FTSE 100 ETF|
|5||AIA||iShare Asia 50 ETF|
1. SDPR S&P 500 ETF (NYSEARCA: SPY)
SPY invests in some of the largest companies within the United States. It tracks the S&P 500 by investing in all of the equities within the index. About a quarter of the ETF is skewed towards the tech industry, with other sectors generally equal in their weighting.
Its top three holdings are some of the largest companies in the world; Apple, Microsoft, and Amazon, which is what you’d expect from a classic ETF that tracks the S&P 500. Since its inception in 2012, the ETF has increased in price by nearly 400%, with 70% of those gains occurring in the 18 months after the covid pandemic swept the world.
The ETF offers an easy way to invest in a broad range of large U.S based companies, which is why it takes top spot on our list. It also pays a dividend to holders, making it suitable for income seeking investors.
2. Pro Shares S&P 500 Dividend Aristocrats (NYSEARCA: NOBL)
Second on our list is the Pro Shares ETF, which only invests in businesses from the S&P 500 index that have increased their dividends in each of the last 25 years. Made up of over 60 companies, each holding has an equal weighting.
The top three industries it invests in are consumer goods, industrials and the financial sector. Some of its holdings are the world’s best known names, including Mcdonalds, Walmart, and Pepsico.
Due to its equal weighting in a wide range of sectors, it offers a well diversified collection of companies, making it a stable investment. Since its inception in 2013, it has grown by over 100% while recovering quickly from a drop due to coronavirus.
3. iShares MSCI EAFE ETF (NYSEARCA: EFA)
Unlike the first two ETFs on our list, the iShares MSCI EAFE, invests in companies not residing in the United States. It seeks to track the investment results of an index made up of large and mid cap stocks located in Europe, Australia, and the Far East.
It has a market cap of over $58 billion and holds some well known companies, including Nestle, Toyota, and Sony. It’s the largest ETF on our list, with nearly 850 companies being held.
Offering exposure to non-U.S. companies, it has produced steady growth of over 200% since its inception. Its largest holding makes up only 2% of its total, meaning no one company can drastically influence its performance.
4. Vanguard FTSE 100 ETF (LSE: VUKE)
This Vanguard ETF attempts to track the performance of the FTSE 100, the UK’s main stock index. Investors in this ETF gain exposure to some of the biggest companies listed in the United Kingdom, many of which are household names across the world.
Its top three holdings include AstraZeneca, Unilever, and Diageo. Performance-wise it has done well, especially in the 18 months post coronavirus. Its largest holding AstraZeneca, has helped boost its price with its vaccine rollout.
It is heavily weighted towards the financial and consumer goods sectors, where nearly 40% of its holdings are. Its low costs and dividend payments have made it one of the most popular ETFs in Europe.
5. iShare Asia 50 ETF (NYSEARCA: AIA)
The final ETF on our list goes to the iShare Asia 50. As its name suggests, it focuses on the Asian market and seeks to track the results of an index composed of the 50 largest Asian companies, known as the S&P Asia 50 index.
Its top two holdings include The Taiwan Semiconductor Company and Tencent Holdings. Both are technology companies, and account for almost a quarter of the ETFs total holdings. The Taiwan Semiconductor Company is the largest semiconductor producer, while Tencent Holdings is the largest video game vendor in the world.
Similarly to the Vanguard ETF above, the iShare Asia is heavily weighted towards the financial services and consumer goods sectors, where about 50% of its companies reside. Since its inception in 2007, it has seen growth in excess of 100%.
Where to buy the best blue chip ETFs
You can buy popular ETFs in the same way as any normal stock. That means that before buying shares in an ETF you will need to sign up to a broker. The table below shows some of the best brokers offering ETFs. You can click the links and sign up in just a few minutes.
What is a blue chip ETF?
An ETF is an investment fund that is available to buy on the stock exchange. You are able to buy shares in an ETF through a stock broker. Each fund is designed to track the performance of a particular index or industry.
Blue chip ETFs give investors access to some of the largest and most stable companies in the world without having to buy individual stocks. These ETFs are not always specific to one industry or sector and offer diversity and exposure to a vast variety of blue chip stocks, generally through indices. Some of the largest blue chip indexes included the S&P 500 and the FTSE 100.
Are blue chip ETFs a good investment?
Yes they can be and are a good way to track some of the world’s best known stock indexes. Although, for investors seeking fast growth, looking at other ETF types may be a more suitable option.
Because of the stability blue chip stocks provide, investing in these types of ETFs can protect a portfolio from market volatility and specific industry struggles. The sheer size of some blue chip ETFs mean they are a cost effective way to gain exposure across a range of companies.
Before buying an ETF you’ll need to register with a broker and keep upto date with the latest news and developments. Both of which you can do by clicking on the links below.
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