Grading The 25 Largest ETFs

Do your ETFs make the grade?

Reviewed by: Allan Roth
Edited by: Allan Roth

The 25 largest U.S.-listed ETFs have about $2.9 trillion in assets. They represent less than 1% of the 2,621 total U.S.-listed ETFs, but about 44% of the nearly $6.6 trillion in ETFs.

So, chances are, you own at least one or more of these. Let’s begin with the final grades and then I’ll explain my grading system.


AUM Rank Ticker Name Expense Ratio AUM $B Diversification Fees Overall Grade
1 SPY SPDR S&P 500 ETF Trust 0.09% $403.65 B B B
2 IVV iShares Core S&P 500 ETF 0.03% $305.56 B A A-
3 VTI Vanguard Total Stock Market ETF 0.03% $273.39 A+ A+ A+
4 VOO Vanguard S&P 500 ETF 0.03% $255.99 B B A-
5 QQQ Invesco QQQ Trust 0.20% $194.56 C D+ C-
6 VEA Vanguard FTSE Developed Markets ETF 0.05% $105.81 B+ A+ A-
7 IEFA iShares Core MSCI EAFE ETF 0.07% $101.47 B- A+ B+
8 AGG iShares Core U.S. Aggregate Bond ETF 0.04% $89.31 A A A
9 VUG Vanguard Growth ETF 0.04% $86.20 C+ A B
10 VTV Vanguard Value ETF 0.04% $85.49 C+ A B
11 VWO Vanguard FTSE Emerging Markets ETF 0.10% $81.91 C A- B
12 BND Vanguard Total Bond Market ETF 0.04% $81.67 A A A
13 IEMG iShares Core MSCI Emerging Markets ETF 0.11% $80.61 C A- B
14 IWF iShares Russell 1000 Growth ETF 0.19% $75.76 B- C+ B-
15 IJR iShares Core S&P Small-Cap ETF 0.06% $69.90 C- A- B-
16 IWM iShares Russell 2000 ETF 0.19% $68.46 B- C+ B-
17 IJH iShares Core S&P Mid-Cap ETF 0.05% $64.33 C- A- B-
18 VIG Vanguard Dividend Appreciation ETF 0.06% $63.80 C+ B B-
19 GLD SPDR Gold Trust 0.40% $58.34 D- F F
20 EFA iShares MSCI EAFE ETF 0.32% $58.15 B- C- C
21 IWD iShares Russell 1000 Value ETF 0.19% $55.34 C+ C C
22 VO Vanguard Mid-Cap ETF 0.04% $52.96 C+ A B
23 VGT Vanguard Information Technology ETF 0.10% $51.24 C+ B B-
24 VXUS Vanguard Total International Stock ETF 0.08% $50.79 A+ A+ A+
25 VB Vanguard Small-Cap ETF 0.05% $47.99 C- A B-



My grading system is simple: two grades (midterm and final) and one overall grade. I start by grading how diversified the fund is. Narrower funds present a couple of problems.

First, they tend to have higher standard deviations that mathematically result in a high probability of underperformance versus broader funds. Second, there is more performance-chasing, resulting in lower investor returns.

The next grade is on fees, and we all know higher fees result in lower returns. I compare the fees relative to alternative ETF choices in the same asset class, taking into account that international stock ETFs are more expensive than U.S. stock ETFs.

I place no weight on past performance. Also, note that my grading system is different than the established Analytics grading system, which analyzes the ETF’s efficiency, tradability and fit, which are important factors. To see the single largest difference, the SPDR Gold Trust GLD aces the Analytics system, as it does a great job of earning the return of gold, and is extremely liquid.

But mean old professor Roth flunks the SPDR Gold Trust (GLD), because it’s very undiversified, because owning the metals itself costs 0.40% less annually, and because it’s not a proper vehicle to own gold long term. Even my huge gold mistake was less costly than buying a gold ETF while paying fees over the past few decades.


I grade these 25 ETFs from an A+ to an F.  With the exception of GLD, grades ranged from an A+ to a C-, so all other ETFs at least got a passing grade. Though it may seem like I’m an easy grader, think of this as an honors class. For the most part, these ETFs became the largest by being more diversified, with far lower fees than the average ETF. So an ETF like a triple levered inverse ETF never would have made this class.

Yet it’s also important to note that there are many ETFs not in the top 25 that would have also aced my grading system. For example, the iShares Core S&P Total U.S. Stock Market ETF (ITOT) would have received the same A+ as the Vanguard Total Stock Market ETF (VTI), as it has nearly as many holdings and the same expense ratio.

In addition, there are times when a narrower ETF is warranted.  My first index funds back in the 1980s were S&P 500 index funds, as they were the first ones launched when John Bogle changed the investing world.

These funds represent roughly 80% of the U.S. stock market. So I own an extended market index fund that is a completion fund owning the other 20% of the U.S. stock market. Buying small and midcap ETFs doesn’t complete the total stock market.

Finally, I’m not above having a little fun. I recently purchased an ultra narrow and pricey ETF, but that was for gambling rather than investing.

Admittedly, grading is almost always subjective, so you may strongly disagree. But before complaining, at least take a look at the following rationale for each ETF.


Ticker Overall Grade Holdings Explanation
SPY B 500 80% of US Market, there are lower cost ways to own.
IVV A- 500 80% of US Market but very low fees.
VTI A+ 3836 100% of US Market with low fees and all securities lending profits returned.
VOO A- 500 80% of US Market but very low fees.
QQQ C- 100 Only 100 holdings with high fees though it has been hot.
VEA A- 3916 Owns most of world but misses emerging markets and small cap, low fees.
IEFA B+ 2878 Misses out on Canada, emerging markets, small cap though low fees.
AGG A 9582 Owns all investment grade US fixed rate taxable bonds with low fees.
VUG B 283 Misses out on core and value though very low fees.
VTV B 342 Misses out on core and growth though very low fees.
VWO B 4066 Misses out on developed markets with fairly low fees.
BND A 9265 Owns all investment grade US fixed rate taxable bonds with low fees.
IEMG B 2504 Owns all investment grade US fixed rate taxable bonds with low fees.
IWF B- 493 Has more holdings than Vanguard Growth but much higher fees.
IJR B- 676 Only 600 holdings in category representing 10% of the market but with low fees.
IWM B- 1984 Nearly 2000 holdings representing 30% of the market but with high fees.
IJH B- 400 Only 400 holdings of a small piece of the market.
VIG B- 247 Owning 247 holdings of a larger slice of the market with fairly low fees.
GLD F 1 Own gold outright if you must.
EFA C 827 Mises out on Canada, emerging markets, and small cap along with high fees.
IWD B- 827 Misses out on core and growth with higher fees.
VO B 364 Misses out on large and small cap but with very low fees.
VGT B- 357 Broader than QQQ but too narrow and expensive.
VXUS A+ 8014 Broadest of the international funds with 8,014 holdings with low fees.
VB B- 1474 Misses out on large and midcap but with low fees.


Investing is all about “minimizing expenses and emotions; maximizing diversification and discipline.”

Stick with the ETFs that minimize fees and maximize diversification. Doing so will serve you far better than going with past performance or your gut feeling about which parts of the market will outperform.

Allan Roth is the founder of Wealth Logic LLC, an hourly based financial planning firm. He is required by law to note that his columns are not meant as specific investment advice. Roth also writes for the Wall Street Journal, AARP and Financial Planning magazine. You can reach him at [email protected], or follow him on Twitter at Allan Roth (@Dull_Investing) · Twitter.

Allan Roth is founder of Wealth Logic, an hourly based financial planning and investment advisory firm. He also benchmarks portfolio performance for foundations and other business concerns. Roth's website is You can reach him at [email protected] or follow him on Twitter at Allan Roth (@Dull_Investing) · Twitter