Dream ETF portfolio: MOAT, IBIT, SCHD, COWZ and QQQ

on Mar 14, 2024
  • Exchange-traded funds are great assets for long-term investors.
  • Having a diversified ETF portfolio can help investors generate strong returns.
  • MOAT, IBIT, SCHD, COWZ, and QQQ are five of the best ETFs to buy.

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Exchange-Traded Funds (ETFs) are some of the best assets to invest in, especially for long-term investors. These funds offer diversification, often at a low cost. According to YCharts, there are now over 3,152 ETFs in the US. 

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A great ETF portfolio should include two key elements: growth and income or returns. As we have seen in the past, investing in a single ETF can lead to substantial losses. For example, people who invested in SQQQ have lost most of their funds as it has lost over 90% of its value over time.

A good ETF portfolio should also let you Sleep Well at Night (SWAN). So, here are the five funds I believe should be in a dream ETF.

VanEck Wide Moat ETF (MOAT)

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The VanEck Wide Moat ETF (MOAT) is one of the best ETFs in the industry. It has over $14 billion in assets and charges an expense ratio of 0.47%. The fund invests in companies that have a wide moat or a competitive advantage in their industry.

Warren Buffett loves moats because these firms are difficult to dethrone in their respective industries. Veeva Systems is the biggest constituent in the fund. This is a software company that focuses on the healthcare industry.

Intercontinental Exchange, the parent company of the NYSE is another big company in the fund. It is hard to dethrone ICE in the industries it dominates. The other top companies in the MOAT ETF are Disney, Ecolab, Autodesk, and CME Group. 

The MOAT ETF has a great track record. Its stock, excluding dividends, has jumped by more than 89% in the past five years and by 30% in the past 12 months.

Pacer US Cash Cows 100 ETF (COWZ)

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The Pacer US Cash Cows 100 ETF (COWZ) is another SWAN ETF to buy and hold. This fund focuses on the most important metric in a company’s financial results: free cash flow. This is an important number that looks at all the funds that remain after a company does everything.

The fund is made up of some of the top companies in the US in terms of FCF. Most of its constituents are in the energy sector and include the likes of Marathon Petroleum, Valero, and Phillips 66. Other big parts of the fund are Qualcomm, Abbvie, Lennar, and Booking Holding.

The benefit of investing in this fund is that it has a good record of dividend growth and has a big exposure in the energy sector. The latter benefit offsets QQQ, which is mostly made up of technology companies.

iShares Bitcoin Trust (IBIT)

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The iShares Bitcoin Trust (IBIT) is one of the eleven spot ETFs that was launched in January. As such, you can feel free to replace it with other Bitcoin ETFs.

The benefit of investing in Bitcoin is that it has proven itself over 15 years. It always bounces back after falling. It has also survived major black SWAN events like Covid-19, high-interest rates, and key collapses like Mt.Gox and FTX.

Further, Bitcoin is the rarest major asset. It has a supply cap of 21 million and over 19.6 million have been mined already. Millions more have been lost and mining difficulty is expected to rise after the halving event. It has also outperformed all asset classes in the past 15 years.

Schwab US Dividend Equity ETF

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The iShares US Dividend Equity Fund (SCHD) is another SWAN ETF to invest in, as I have written before. This is a fund that is well-known for its strong dividend growth and consistent returns. 

SCHD is also made up of many value companies, with the most notable ones being Broadcom, Abbvie, Home Depot, and Chevron. Most of its companies are in the industrials sector followed by financials, health care, and technology. 

Invesco QQQ ETF 

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Finally, the Invesco QQQ ETF is another great ETF to buy. It is a fund that tracks the Nasdaq 100 index, which focuses on the technology sector. The benefit of investing in this fund is that it has most of the futuristic companies in the world.

For example, it has companies like Microsoft and Salesforce that are changing the corporate world and Nvidia which is changing the AI industry. It also has companies like Google, Amazon, and Apple, which dominate key industries. This explains why QQQ is one of the best-performing ETF in Wall Street.


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