You’ve heard warnings about your low-fee index fund: It’s perilously loaded with
Yet the smart money (think Warren Buffett) still calls index funds most retirement investors’ best bet—and you can de-FAANG without abandoning indexing, says Aaron Brown, former AQR financial market research head. Three Forbes picks:
Invesco S&P 500 Equal Weight (Ticker: RSP)
Buys every stock in the S&P 500 at equal size. With returns of 10.6% over 15 years, it outperforms the S&P at a 20-basis-point cost. Tradeoff: Less exposure to tech, large-caps and momentum.
Vanguard Mid-Cap Fund (Ticker: VO)
A way to own hundreds of midsize U.S. companies. The fund has beaten the S&P 500 over ten years at a five-basis-point cost. Tradeoff: Cap weight means tech is its top exposure.
Invesco Russell 1000 Equal Weight ETF (Ticker: EQAL)
Weights nine sectors equally at a 20-basis-point cost, eliminating bias. Tradeoff: Versus the S&P 500, you’re underexposed to booming tech and overweight laggards. Its 8.9% three-year return falls short of the S&P 500.