Fee-Free ETFs to Increase Returns

Avoid paying more for your investments than is necessary.

Investment fees sabotage your investing gains. The longer-term results will be drained more quickly, the greater the price. The Securities and Exchange Commission evaluated the worth of a $100,000 portfolio over 20 years, whether the same $100,000 portfolio was invested with a charge of 0.25 percent, 0.50 percent, or 1 percent. After 20 years, the 0.25% fee portfolio lost $10,000 in value due to the 0.5% charge, while the 1% fee portfolio lost over $30,000 in value due to the 0.25% cost. Fortunately, investors in exchange-traded funds, or ETFs, don’t have to spend 1% and even 0.25% to discover a solid investment.

ETF providers are progressively lowering their prices; some have even gotten to offering ETFs with no fees. Here are Fee-Free (NO FEE) ETFs to help you reduce the cost of your investment.

BNY Mellon US Large Cap Core Equity ETF

The Morningstar U.S. Large Cap Index, which follows the performance of the top 70% of U.S. market businesses, is tracked by the BNY Mellon US Large Cap Core Equity ETF, a passively managed ETF. As of publishing, there are 231 holdings in total. This is solely a size play because it does not include environmental, social, and governance (ESG) aspects in its selection process. But it’s a fantastic option if you want to get cheap exposure to companies like Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN).

BKLC, introduced in April 2020, performs a respectable job of following the index, even though the precise weights of each position may differ somewhat from the index.

SoFi Select 500 ETF

The 500 most giant publicly listed U.S. corporations are tracked by SoFi Invest’s fee-free large-cap ETF, at minimum, for the first year. Instead of using the conventional market capitalization weighting employed by many index ETFs, it weights each firm according to three growth signals: sales growth, revenue growth, and forward-looking projections. Higher weights are given to companies in the ETF that perform well on these metrics. The management waived the 0.19% cost ratio on the fund but maintained a close eye on it because they committed to do so only thru June 30, 2021. The cost was waived earlier in November 2021, but anything might change.

SoFi Next 500 ETF

SoFi likewise waives the SoFi Next 500 ETF’s 0.19% cost ratio. The mid-cap variant of the SoFi Select 500 is called SFYX. In addition to weighting those three growth indicators—sales growth, revenue growth, and forward-looking estimates—SFYX owns 500 mid-cap U.S. equities. With 500 holdings, it is highly diversified, with Datadog Inc. (DDOG), the most prominent position, accounting for only 1.51% of the total. Despite this, the fund is still geared toward long-term investors with the financial means to adopt a higher-risk/higher-reward strategy.

BNY Mellon Core Bond ETF

The BNY Mellon Core Bond ETF is only one example of the fee-free ETFs available in the fixed-income market. With 1,840 holdings, the fund follows the Bloomberg Barclays U.S. Aggregate Total Return Indicator, offering investors extensive exposure to the U.S. bond market. It provides monthly payouts and has a yield of 1.65% right now. Compared to other transitional bond funds, it tends to be more conservative and favors Treasury bonds over corporate bonds. Nothing in the portfolio is rated worse than BBB, and over 70% of the bonds are AAA-rated.

Gabelli Love Our Planet & People ETF

One of the most recent sustainable investments is the Gabelli Love Our Earth & People ETF, which was introduced in January 2021. Investing in businesses with sustainability solutions for the benefit of the environment, such as renewable power, clean transportation, and trash reduction or recycling, concentrates on the E, or surroundings, in ESG. LOPP makes at least 80% of its portfolio investments in these U.S.-listed businesses. The advisor to the fund is waiving the fee ratio for at least a year on the first $100 million invested in the fund. This implies there are still many opportunities to invest without paying an expense ratio, with just $11.2 million being invested thus far.

The investment will have an expense ratio of 0.9% after the waiver expires, which is above the median in terms of cost.

Invesco Nasdaq Biotechnology

The Nasdaq Biotechnology Indicator, which covers Nasdaq-listed businesses in the biotechnology and pharmaceutical industries, is tracked by IBBQ. They can be any size of the company. The portfolio of IBBQ contains a good balance of large-, mid-, and small-cap stocks. Its whole portfolio is in the healthcare industry, with several well-known companies, including Moderna Inc. (MRNA) and Gilead Sciences Inc., among its top holdings (GILD). The low trading activity on this fund is significant. The fund may have a broad trading spread, making it difficult for investors with extensive holdings to sell as just 18,000 shares on average change hands daily. The fund was established in June 2021; therefore, it is still very new.

Invesco is waiving the cost ratio for the fund until at least December 17, after which it can increase to 0.19%.

Invesco PHLX Semiconductor ETF

Moreover, Invesco is waiving the SOXQ expense ratio of 0.19% until at least December 17. The fund owns the 30 biggest U.S.-listed semiconductor companies, following the PHLX Semiconductor Sector Index. They include Texas Instruments Inc. (TXN), Qualcomm Inc. (QCOM), Broadcom Inc. (AVGO), Nvidia Corp. (NVDA), and Intel Corp. (INTC). Similar to IBBQ, SOXQ was introduced in June 2021 but has yet to take off. The fund trades less than 30,000 units per day on average and has only $68.2 million in total assets under management. Yet, Morningstar’s experts have confidence in the fund management, which is why they gave it a “bronze” grade.