For years, I’ve tracked the 'world’s lowest-cost ETF portfolio.' Now I can do one better.
For the past six years, I’ve kept track of what I call the world’s lowest-cost ETF portfolio. It’s an aggressive portfolio holding the ETFs with the lowest expense ratio in six different areas of the market:
- 40 Percent U.S. Equities
- 30 Percent International Developed Market Equities
- 5 Percent Emerging Market Equities
- 5 Percent REITs
- 15 Percent Fixed Income
- 5 Percent Commodities
When I started tracking the portfolio, it had a blended expense ratio of 0.16 percent per year, meaning you paid $16 per year for every $10,000 invested. I thought that was pretty cool.
ETF prices fall year after year, however, and today, that blended expense ratio is down to just 0.08 percent per year.
Here’s the portfolio:
|The World's Lowest-Cost ETF Portfolio|
|U.S. Equity||40%||Schwab U.S. Broad Equity ETF||SCHB||0.04%|
|Developed Markets Equity||30%||Schwab International Equity ETF||SCHF||0.08%|
|Emerging Markets Equity||5%||Schwab Emerging Markets Equity||SCHE||0.14%|
|Fixed Income||15%||Schwab U.S. Aggregate Bond||SCHZ||0.05%|
|REITs||5%||Schwab U.S. REIT ETF||SCHH||0.07%|
|Commodities||5%||UBS E-TRACS DJ-UBS Commodity TR ETN||DJCI||0.50%|
|Blended Expense Ratio||0.08%|
For just $8 a year, you get exposure to more than 4,000 stocks, 1,500 bonds, 25 commodities, 45 different countries and a dozen difference currencies. That’s awesome.
But what if I told you that you could do one better? What if you could actually build a portfolio that paid you 0.05 percent a year to hold it?