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Business Insider
15-05-2025
- Business
- Business Insider
How to invest a lump sum of money at any age
Investing a windfall requires considering age, risk tolerance, and financial goals. Younger investors can afford more risk, while older investors should focus on stability. Consult a financial planner to tailor investment strategies to individual circumstances. It's the age-old question when you suddenly come into a bit of money: What should you do with it? Temptations lurk. That bucket-list trip to St. Bart's. The Mercedes C-Class convertible you've always wanted. A seahorse-shaped potato chip currently going for $105,000 on eBay. Oh, that's just me? While the pull of instant gratification is strong, perhaps you've come to the more responsible decision to invest the money. Even then, it's difficult to know where to put your new lump sum. The answer will differ for everyone, depending on when they'll need the money and what their risk tolerance is. But we thought a general guide may be useful for people of all ages who've just received a chunk of money like a bonus, an inheritance, or a tax return. With the help of Chris Chen, a certified financial planner and the founder of Insight Financial Strategists, we've come up with a plan that investors can think about taking with a new windfall, no matter how old they are. While it's impossible to personalize a plan for each individual, the assumption in this case is that the cash will be put aside for retirement. Disclaimer: this is not specialized financial advice, and each investor should consider their own circumstances and consult a financial professional before making decisions. Check out your suggested path below. 20-29 Open a brokerage account. Not a 401(k) or a Roth IRA — those should be set up with an employer and contributed to regularly. Setting up a separate account with a brokerage firm like Vanguard or Ally will prevent you from having to pay penalties if you need the money before retirement age. Once that's done, allocate 80% of the money to stocks and 20% to bonds. The classic portfolio construction is 60% stocks and 40% bonds, but your longer investing timeline means you can withstand the volatility of the stock market. A 20% allocation to bonds will still provide some downside protection. Within stocks, put most of your money into an index fund like the SPDR Portfolio S&P 500 ETF (SPLG). To diversify, allocate around 5-10% to international stocks through a fund like the Schwab International Equity ETF (SCHF). 30-39 Perhaps you already have a stock portfolio. It's not a bad idea to simply throw a new lump sum into existing positions, or into a broad index fund that will grow over a decadeslong period. It could also be a good opportunity to assess how your portfolio is structured, and think about how you can perhaps rebalance with some international exposure it so you're properly diversified. You may also want to diversify into another asset class: real estate. If it's enough money for a down payment, you could lose the lump sum to buy a home. Mortgage rates admittedly aren't great at the moment, but you can always refinance if rates drop in the future. People increasingly have their first kid in their 30s. If that's the case for you, maybe open a 529 plan for college savings. If you're not a parent yet but plan on being one sometime down the line, you can open up a 529 plan for yourself, as the funds can be used for anyone in your family. 40-49 You're starting to get closer to retirement age, but assuming a retirement age of 65, you still probably have enough time to keep your equity exposure aggressive. Put 80% of the money into an S&P 500 index fund and 20% into bonds through a fund like the iShares Core US Aggregate Bond ETF (AGG). If you're lucky enough to feel like you're pretty well covered on your own retirement needs, you might consider opening up a Roth IRA for your kids, if you have them. 50-59 Retirement is on the horizon, so you should start taking a more cautious and active approach to money management. At this point, it's a good idea to hire a Certified Financial Planner to develop a plan that's unique to your needs. A generally good idea heading into retirement is to start building up a three-year "safe bucket," which is enough living expenses to cover three years. You'll have this money in low-risk, shorter-term bonds. Any leftover money can go into stock-market index funds. Stocks are risky and volatile investments that can be subject to significant downside in a short period of time. That's why it's good to have an investing timeline of at least a few years, or even better, more than a decade. 60+ It's the same advice for those in their 50s: start building up enough funds to cover three years of living expenses. These funds will be invested in safe-haven short-term bonds. Extra money can go into a stock-market index fund, though it may be a good idea to allocate part of your stock portfolio to more defensive areas of the market since your investing timeline starts to shorten. Once you retire, you'll start to sell your bond positions year by year to fund your spending. As you sell the bonds, you'll need to sell an equivalent amount in stock positions to keep your "safe bucket" three years deep. The calculus on how much money you'll need to pull out of your portfolio does start to change a bit once you're able to start claiming Social Security as early as 62.
Yahoo
07-04-2025
- Business
- Yahoo
DIA Draws In $844 Million Despite Dow's Historic Plunge
The SPDR Dow Jones Industrial Average ETF Trust (DIA) pulled in $844.2 million Friday, increasing its total assets to $37.7 billion, according to daily fund flows data. The inflows came despite the Dow suffering its second consecutive 1,500+ point drop as markets reeled from China's announced retaliatory tariffs. The leveraged ProShares UltraPro QQQ (TQQQ) attracted $783 million as volatility spiked. The SPDR Portfolio S&P 500 ETF (SPLG) gained $548.1 million, while the safe-haven SPDR Gold Shares (GLD) pulled in $431.6 million, as investors sought protection amid the market rout that sent the S&P 500 into a two-day decline. The Invesco QQQ Trust (QQQ) saw the largest outflows at $976.5 million as tech stocks plummeted, with the Nasdaq 100 entering bear market territory—down more than 22% from its February high. The iShares 20+ Year Treasury Bond ETF (TLT) experienced outflows of $666.9 million. Leveraged ETFs led asset class inflows with $1.1 billion, while U.S. equity ETFs gained $1.5 billion despite the broader market carnage. In total, ETFs added $4.8 billion in new assets. Ticker Name Net Flows ($, mm) AUM ($, mm) AUM % Change DIA SPDR Dow Jones Industrial Average ETF Trust 844.23 37,670.53 2.24% TQQQ ProShares UltraPro QQQ 783.02 21,255.43 3.68% SPLG SPDR Portfolio S&P 500 ETF 548.12 59,858.14 0.92% GLD SPDR Gold Shares 431.55 93,876.51 0.46% IVV iShares Core S&P 500 ETF 397.29 588,474.76 0.07% SGOV iShares 0-3 Month Treasury Bond ETF 331.16 40,311.67 0.82% VOO Vanguard S&P 500 ETF 282.49 598,646.95 0.05% LQD iShares iBoxx $ Investment Grade Corporate Bond ETF 260.90 30,275.51 0.86% VT Vanguard Total World Stock ETF 212.68 42,192.15 0.50% HYG iShares iBoxx $ High Yield Corporate Bond ETF 204.38 15,886.62 1.29% Ticker Name Net Flows ($, mm) AUM ($, mm) AUM % Change QQQ Invesco QQQ Trust Series I -976.54 298,821.88 -0.33% TLT iShares 20+ Year Treasury Bond ETF -666.93 51,243.73 -1.30% IGSB iShares 1-5 Year Investment Grade Corporate Bond ETF -373.15 21,465.34 -1.74% VTV Vanguard Value ETF -250.26 134,338.52 -0.19% MDY SPDR S&P Midcap 400 ETF Trust -217.90 22,343.40 -0.98% XLF Financial Select Sector SPDR Fund -200.75 52,166.89 -0.38% IVW iShares S&P 500 Growth ETF -198.12 52,063.72 -0.38% KBE SPDR S&P Bank ETF -133.85 1,855.32 -7.21% UVXY ProShares Ultra VIX Short-Term Futures ETF -119.14 170.70 -69.80% SMH VanEck Semiconductor ETF -117.75 19,170.39 -0.61% Net Flows ($, mm) AUM ($, mm) % of AUM Alternatives 10.92 9,922.87 0.11% Asset Allocation -22.12 23,007.14 -0.10% Commodities ETFs 449.50 199,541.15 0.23% Currency 204.49 103,127.93 0.20% International Equity 376.17 1,615,420.83 0.02% International Fixed Income 204.50 280,853.86 0.07% Inverse 73.92 15,110.84 0.49% Leveraged 1,092.89 94,723.07 1.15% US Equity 1,454.74 6,270,328.16 0.02% US Fixed Income 983.89 1,645,677.23 0.06% Total: 4,828.91 10,257,713.08 0.05% Disclaimer: All data as of 6 a.m. ET the date the article is published. Data are believed to be accurate; however, transient market data are often subject to subsequent revision and correction by the | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
31-03-2025
- Business
- Yahoo
FV Attracts Big Bucks as Market Drops on Inflation Concerns
The First Trust Dorsey Wright Focus 5 ETF (FV) pulled in $701.9 million Friday, expanding its assets by 16.2% to $4.3 billion, according to daily fund flows data. The SPDR Portfolio S&P 500 ETF (SPLG) attracted $1.6 billion, while the iShares 7-10 Year Treasury Bond ETF (IEF) gained $377.6 million as investors sought fixed-income exposure amid the Dow's 715-point plunge on inflation concerns. The Direxion Daily Semiconductor Bull 3x Shares (SOXL) collected $249.5 million despite broader technology weakness. On the outflows side, the Vanguard S&P 500 ETF (VOO) experienced outflows of $1.2 billion while remaining the largest ETF with $602.3 billion in assets. The iShares Russell 2000 ETF (IWM) saw outflows of $760.6 million as small-caps struggled, while the VanEck Semiconductor ETF (SMH) lost $221.9 million as the market faced pressure from President Donald Trump's auto tariff announcements. U.S. equity ETFs led overall inflows with $3.16 billion, while leveraged products added $546.1 million. The ETF industry collected a total of $5.6 billion in net inflows. Ticker Name Net Flows ($, mm) AUM ($, mm) AUM % Change IVV iShares Core S&P 500 ETF 1,686.16 591,270.65 0.29% SPLG SPDR Portfolio S&P 500 ETF 1,554.00 60,589.25 2.56% FV First Trust Dorsey Wright Focus 5 ETF 701.85 4,324.76 16.23% VGK Vanguard FTSE Europe ETF 391.42 22,014.57 1.78% IEF iShares 7-10 Year Treasury Bond ETF 377.60 34,371.48 1.10% SGOV iShares 0-3 Month Treasury Bond ETF 256.58 39,150.75 0.66% SOXL Direxion Daily Semiconductor Bull 3x Shares 249.52 7,883.37 3.17% GLDM SPDR Gold MiniShares Trust 244.72 12,758.52 1.92% SPHY SPDR Portfolio High Yield Bond ETF 244.43 8,747.93 2.79% DFAC Dimensional U.S. Core Equity 2 ETF 228.44 32,084.83 0.71% Ticker Name Net Flows ($, mm) AUM ($, mm) AUM % Change VOO Vanguard S&P 500 ETF -1,232.03 602,330.87 -0.20% IWM iShares Russell 2000 ETF -760.56 66,147.87 -1.15% SMH VanEck Semiconductor ETF -221.92 20,182.17 -1.10% AGG iShares Core U.S. Aggregate Bond ETF -196.53 124,464.60 -0.16% JAAA Janus Detroit Street Trust Janus Henderson AAA CLO ETF -192.24 21,217.45 -0.91% BIL SPDR Bloomberg 1-3 Month T-Bill ETF -169.62 41,087.60 -0.41% ARKK ARK Innovation ETF -165.25 5,450.81 -3.03% DIA SPDR Dow Jones Industrial Average ETF Trust -148.55 36,836.54 -0.40% XLV Health Care Select Sector SPDR Fund -144.72 38,006.27 -0.38% VV Vanguard Large-Cap ETF -144.46 39,724.72 -0.36% Net Flows ($, mm) AUM ($, mm) % of AUM Alternatives -38.02 9,747.36 -0.39% Asset Allocation 10.73 23,457.98 0.05% Commodities ETFs 225.28 196,950.67 0.11% Currency 112.17 110,097.98 0.10% International Equity 837.24 1,662,937.42 0.05% International Fixed Income -94.82 280,229.43 -0.03% Inverse 11.03 13,411.94 0.08% Leveraged 546.07 107,821.07 0.51% US Equity 3,156.03 6,516,277.50 0.05% US Fixed Income 874.15 1,627,883.90 0.05% Total: 5,639.85 10,548,815.25 0.05% Disclaimer: All data as of 6 a.m. ET the date the article is published. Data are believed to be accurate; however, transient market data are often subject to subsequent revision and correction by the | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
20-02-2025
- Business
- Yahoo
Vanguard ETF poised to overtake State Street's fund as world's biggest
By Suzanne McGee (Reuters) - Vanguard Group's Standard & Poor's 500 ETF is on the edge of finally seizing the title of the world's largest exchange-traded fund from rival State Street Global Advisors' product, the SPDR S&P 500 Trust, according to data from FactSet, LSEG and other sources. As of late Friday, the State Street fund was still clinging to the lead, with $633.1 billion in assets compared with $631.8 billion for the Vanguard ETF. That gap, however, has been narrowing consistently in recent months. Final data for inflows into both ETFs will not be available until later on Tuesday or Wednesday morning, FactSet and others said. Analysts at Citi Research tracking monthly flows into and out of exchange-traded funds reported earlier this month that SPY had $19.4 billion in outflows, accounting for 25.7% of all U.S. equity ETF outflows. Meanwhile, the Vanguard ETF raked in 12.9% of all inflows in January, for a total of $21.3 billion. The SPDR ETF, launched in 1993, was the first U.S. exchange-traded fund. It has reigned as the largest U.S. stock ETF ever since and remains the first choice of hedge funds and traders who prize its liquidity and tight trading spreads. But Vanguard's lower-fee challenger, launched in 2010, won admirers among financial advisors and retail investors interested in paring costs to the bone. "SPY's transition from being primarily an investment tool to more of a trading vehicle has made flows more volatile," said Ryan Jackson, senior analyst of passive strategies at Morningstar. The ETF industry has also undergone massive changes, with the three biggest firms in the U.S. industry - BlackRock, Vanguard and State Street - coming under siege from relative newcomers. "There is now more of a fight for market share," said Anna Paglia, who last year left her post as global head of ETFs at Invesco to join State Street as executive vice president and chief business officer. "SPY does keep growing in size because it's still the most traded ETF in the world," Paglia told Reuters. She added that flows into and out of SPY tend to be seasonal in nature and that outflows early in the year are "not unforeseen." Moreover, Paglia said flows into a retail-focused S&P 500, the SPDR Portfolio S&P 500 ETF remain robust. According to the recent Citi Research report, this ETF - a "mini" version of SPY launched in 2005 designed to appeal to retail investors and with fees of only 0.02% - was the fifth-largest ETF in terms of inflows for January, attracting $3.2 billion. "We don't look at SPY in isolation," Paglia told Reuters. "We look at the ecosystem." That does not alter the reality that Vanguard's ETF may have finally toppled its State Street rival, said Todd Rosenbluth, head of research at VettaFi. "State Street remains a dominant player in the ETF universe, but these are two different products."
Yahoo
19-02-2025
- Business
- Yahoo
Vanguard Rides VOO's Ascent to Top of the ETF Heap
The crown for the world's largest exchange-traded fund has been transferred, at least for now, to the Vanguard S&P 500 ETF (VOO) from the SPDR S&P 500 ETF Trust (SPY), which held the title for most of its 32-year existence. VOO, at $631.8 billion in assets Tuesday morning, edged ahead of SPY by about $1.5 billion, thus wrapping up the months-long asset race for those of us who are paid to pay attention to such things. But this is not the end of the jostling in the ever-evolving $10.7 trillion ETF space. Anyone paying even cursory attention to the asset flow data beneath the ETF industry can appreciate the shifting dynamics along with various driving forces. Sure, VOO surpassed SPY's total assets after net inflows of $121.1 billion last year, nearly five times the $23.6 billion taken in by SPY. But Vanguard Group, overall, has become an asset magnet lately. According to the latest data from ETFGI, Vanguard's $36 billion worth of January inflows represented 40% of the $90 billion that went into ETFs last month. The next-closest firm was BlackRock's iShares, which took in $9.6 billion. State Street Global Advisors, which launched SPY in 1993 as the first U.S. ETF, experienced $11.3 billion worth of net outflows in January. But State Street sees silver linings in its lineup—even as SPY loses its crown. 'It speaks to the maturation of an industry where investors have so many different options to get exposure to broad market equity indexes,' said Matt Bartolini, head of SPDR Americas Research at State Street. He points to the $60 billion SPDR Portfolio S&P 500 ETF (SPLG), which took in $20 billion last year and has already taken in $4 billion this year. On a side-by-side comparison, VOO and SPY each have characteristics that make them viable ETFs for a long time to come. SPY, which charges 9 basis points, has a liquidity advantage that is attractive to options traders and sophisticated investors. 'SPY is a unicorn of an ETF,' Bartolini said. 'Last year it traded over $9 trillion in the secondary market; it's used by a diverse range of clients with diverse motivations and buying behaviors.' Meanwhile, at 3 basis points, VOO likely appeals to investors looking for low-cost broad market index exposure. To that, Bartolini points to SPLG, which charges just 2 basis points. 'It's great to be the biggest ETF in the world, but it only matters if your clients are happy,' he added. Vanguard appears to be hitting on all cylinders following fee cuts to more than half its ETF lineup just last month. But even Vanguard might be facing a wall as an ETF issuer with just six active funds at a time when investor appetite shows a shift toward active strategies. Vanguard also stands out as one of the cryptocurrency ETF holdouts, essentially shutting the door on the most popular ETF category. In an emailed comment regarding the VOO milestone, Rodney Gomegys, Global Head of Equity Investment Group at Vanguard, credited Vanguard's 'unmatched focus on the best interests of our investors.' 'Throughout 2024 and continuing into early 2025, the market environment has been generally favorable to large-cap U.S. equities, which has contributed to continued enthusiasm for S&P 500 ETFs and other large-cap strategies across the industry' he added. 'And as ETF model portfolios continue to gain traction with investors and advisors, allocations to broadly diversified, low-cost, highly liquid ETFs like VOO have continued to increase.'Permalink | © Copyright 2025 All rights reserved Sign in to access your portfolio
