What Is a High Yield ETF?

A Performance-Based Look at MSTY vs. MSTR Over the Past Year

As income-focused investors look for ways to generate higher returns in a volatile market, the question often arises: What is a high yield ETF, and how does it compare to owning individual stocks? One category gaining attention is option income ETFs — particularly the YieldMax suite, which includes ETFs like MSTY, based on MicroStrategy (MSTR).

In this article, we’ll examine what high yield ETFs are, how the YieldMax strategy works, and how MSTY has performed over the last year compared to directly holding MSTR stock. The goal is to understand the trade-offs between high monthly income and total return, especially in a year marked by market volatility.

Understanding High Yield ETFs

A high yield ETF is an exchange-traded fund that prioritizes income generation, typically offering annualized yields that far exceed those of traditional dividend-paying funds. These ETFs may invest in high-yield corporate bonds, preferred stocks, or, in the case of YieldMax ETFs, use options-based strategies to enhance income.

YieldMax ETFs do not own the underlying stocks directly. Instead, they use derivatives to simulate long exposure to a stock and then generate income by systematically selling call options. This strategy produces steady monthly cash flow but limits upside participation if the stock rises sharply.

The Strategy Behind MSTY

MSTY, the YieldMax MSTR Option Income Strategy ETF, is designed to deliver income by writing call options on a synthetic long position in MicroStrategy (MSTR). This approach enables the fund to:

• Generate monthly option premium income

• Distribute that income to shareholders as high-yield monthly dividends

• Mitigate capital requirements by not holding the underlying stock

This is an appealing strategy for income-focused investors, especially when the underlying stock is volatile — which MicroStrategy is, due to its significant Bitcoin exposure.

Performance Comparison: MSTY vs. MSTR (April 2024 – April 2025)

Over the past 12 months, both MSTY and MSTR delivered strong returns, but for different reasons. Here’s a breakdown of their performance:

While MSTY provided significant income that helped smooth out volatility, its capped upside resulted in lower total return than owning MSTR outright. Investors who held MSTR captured more of the stock’s sharp rise, especially during Bitcoin rallies.

Key Trade-Offs: Income vs. Growth

The primary difference between MSTY and MSTR lies in income generation versus growth potential. MSTY is built for consistent yield through options premiums, while MSTR is a volatile asset with high potential upside — and high downside risk. Importantly, MSTY’s performance will lag significantly if the underlying stock makes a sustained breakout due to the call option caps.

For instance, when MicroStrategy surged over 70% during Bitcoin’s rise from late 2023 into early 2024, MSTY captured only a portion of that rally due to the option overlay. However, in periods of flat or declining markets, MSTY’s income-generating strategy may outperform pure equity exposure on a risk-adjusted basis.

Tax Considerations and Risks

Investors should be aware that high yield ETFs using options may introduce complex tax implications. Distributions may not qualify as qualified dividends and could include return of capital or short-term capital gains.

Additionally, the risk of capital loss remains. If the underlying stock declines significantly, the income from selling options may not be enough to offset portfolio losses. This makes risk management and proper position sizing crucial when investing in ETFs like MSTY.

Conclusion: Is MSTY a High Yield ETF Worth Considering?

To answer the question, “What is a High Yield ETF?” — MSTY represents a modern, options-based answer. It fits within a growing category of derivative-enhanced income ETFs that aim to provide high monthly payouts in exchange for limited price appreciation.

In the past year, MSTY performed admirably, delivering over 45% total return, even amid market fluctuations. However, it underperformed the underlying stock, MSTR, which gained nearly 74% due to the full benefit of rising Bitcoin prices and investor sentiment.

For income-focused investors who prefer a rules-based, option-selling approach with limited upside and enhanced cash flow, MSTY can be a useful tool. For those seeking full exposure to high-growth, high-volatility assets like MicroStrategy — and who are willing to accept the risks — direct stock ownership remains the better path.

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SCHD: Should You Buy Schwab US Dividend Equity ETF?

If you’re looking for a high-quality dividend ETF then there’s a good chance that you’ve come across the Schwab US Dividend Equity ETF (Nysearca: SCHD) before. This ETF is highly regarded by investors. So much so that CNBC and Morningstar have called it the gold standard for dividend funds. Is this ETF a must-have for your dividend portfolio? Or, are there better options out there?

What’s an ETF?

As a quick reminder, an exchange-traded fund (ETF) is a financial product that tracks an underlying index, sector, or asset class. If a stock were a fruit then buying an ETF is a bit like buying a fruit basket, you get many small pieces from lots of different fruits.

Many investors prefer buying ETFs because they help you easily diversify your portfolio. Buying shares of an ETF essentially means you never have to worry about picking the right stocks.

For example, let’s say that you’re bullish on the future of AI. But, you aren’t sure which company(s) will emerge as leaders in AI over the coming years and you don’t want to risk investing in the wrong companies. In this case, you could simply invest in an ETF that tracks a range of AI stocks instead of trying to handpick certain companies.

You can read more about how ETF investing works here. Now, let’s discuss Schwab US Dividend Equity ETF (SCHD).

What is SCHD?

The Schwab US Dividend Equity ETF is a passive ETF whose goal is to “track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Dividend 100™ Index.” This means that SCHD tracks the top 100 biggest, most reliable dividend-paying companies in America.

Buying shares in this fund is a low-cost and tax-efficient way for investors to get access to some of the most financially stable companies that pay consistent, reliable dividends. If you buy shares in SCHD then you won’t have to worry about researching individual dividend stocks. 

Additionally, an expense ratio of 0.06% means you will only pay $0.60 in fees for every $1,000 that you invest. This is much lower than many actively managed funds. But, still not as cheap as doing your own research.

The SCHD focuses on the quality and sustainability of dividends, mainly looking for companies that increase their dividends over time. Its five biggest holdings are:

1. Cisco Systems (Nasdaq: CSCO) which makes up 4.12% of the index
2. AbbVie (NYSE: ABBV) which makes up 4.11% of the index
3. Home Depot (NYSE: HD) which makes up 4.06% of the index
4. Amgen (Nasdaq: AMGN) which makes up 4.04% of the index
5. Chevron (NYSE: CVX) which makes up 4.04% of the index

This stock-based index is most concentrated in the following five industries:

1. Financials which makes up 17.42% of the index 
2. Healthcare which makes up 15.71% of the index 
3. Consumer Staples which makes up 13.89% of the index 
4. Industrials which makes up 13.51% of the index 
5. Energy which makes up 12.84% of the index 

Should You Buy SCHD?

This depends on your investment strategy and goals. However, if you’re an investor looking to get exposure to a wide range of high-quality dividend stocks then SCHD certainly presents a good solution. This fund has a long and proven history of consistently increasing its dividend payout. 

Here’s a quick snapshot of its dividend payments over the past few years (it pays dividends quarterly):

• Q1 2024: $0.8241 per share
• Q1 2023: $0.5965 per share
• Q1 2022: $0.5176 per share
• Q1 2021: $0.5026 per share
• Q1 2020: $0.4419 per share

You can see that the fund has consistently increased its dividend payments over the years. However, there were a few quarters where dividend payments dipped (mainly, in the wake of the 2020 pandemic). 

Since 2020, SCHD’s stock price has also increased by roughly 34%. This shows the year-over-year dividend and stock appreciation growth that you can expect to experience from this fund. But, remember that past performance is not a guarantee of future results.

That said, a dividend ETF like SCHD might not be the best choice for investors with a longer time horizon. If you plan to keep your money invested for a longer period of time (say, 10 years or more) then you might be better off sticking with a regular ETF. 

Dividend ETFs Vs Stock Market ETFs

Dividend ETFs are popular for their ability to reliably pay money to investors via dividends. Some investors rely on these dividends for income. But, many investors choose to reinvest the dividends back into the fund. If your goal is long-term capital appreciation then you might be better off going with a general stock market ETF.

Stock market ETFs can often outperform dividend ETFs. For example, consider an ETF like the SPDR S&P 500 ETF Trust (Nysearca: SPY) which tracks the overall performance of the S&P 500. Or, the Fidelity NASDAQ Composite Index ETF (Nasdaq: ONEQ) which tracks tech-centric NASDAQ index. Here’s how these two ETFs have fared against the SCHD since 2020:

• SCHD: 34%
• SPY: 70%
• ONEQ: 101%

Dividend ETFs are great because they reliably pay dividends. But, they also tend to track later-stage companies whose high-growth periods are behind them. This means that they could miss out on sector-specific rallies – such as the recent artificial intelligence rally. This is why dividend ETFs can often underperform the broader market, in terms of stock price appreciation. However, keep in mind that the above returns do not factor in reinvested dividends, so it’s not entirely an apples-to-apples comparison.

Ultimately, SCHD is a great choice for investors who are looking for an ETF that reliably pays increasingly growing dividends. But, it might not be the best idea for investors who prioritize stock price appreciation and have a longer time horizon.

You can learn more about ETF investing here:

1. 5 Monthly Dividend ETFs for Income Portfolios 
2. ETFs That Short the Market
3. ETFs: Pros and Cons

I hope that you’ve found this article valuable when it comes to learning about SCHD and whether or not you should buy it. If you’re interested in learning more then please subscribe below to get alerted of new investment opportunities from InvestmentU.

Disclaimer: This article is for general informational and educational purposes only. It should not be construed as financial advice as the author, Ted Stavetski, is not a financial advisor. Ted also did not own shares of SCHD at the time of writing.

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Read This Before Buying any Bitcoin ETF

In January 2024, the Securities and Exchange Commission (SEC) made it legal for financial companies to release exchange-traded funds (ETFs) that can track the price of bitcoin.

In this article, I’ll break down why you should avoid buying a Bitcoin ETF at all costs – as well as my thoughts on why BTC is set to rally.

3 Reasons Why You Should Never Buy a Bitcoin ETF

They Charge Unnecessary Fees

A Bitcoin ETF is essentially just a financial tool that tracks the spot price of Bitcoin while charging you a fee to do so. But…you can easily do this yourself by opening a crypto wallet and buying Bitcoin. So, why would you pay another company to do it for you?

According to Nerdwallet, most Bitcoin ETFs charge between 0.5% to 1.5%. Now, you might think that these financial institutions are using some sort of secret strategy when tracking Bitcoin’s price. Right? Like, maybe they have a special crypto wallet that uses ultra-safe encryption technology. Nope. According to Nerdwallet, most Bitcoin ETFs on the market use Coinbase (Nasdaq: COIN). Again, this is easily something that you could do yourself – for free.

I guess it’s true that some BTC ETFs invest in futures while others invest in Bitcoin mining stocks. So, buying a Bitcoin ETF for the sake of tracking all of the BTC mining stocks might make a bit of sense. But, if you’re solely interested in getting exposure to Bitcoin then it makes zero sense to buy an ETF.

Now, I know what you’re thinking. Some of these ETFs have really cool names, like the “Bitwise Bitcoin Strategy Optimum Roll ETF”: (NYSEARCA: BITC). With a name like that, this ETF must have a unique trading strategy that outperforms Bitcoin, right?

Wrong.

Bitcoin ETFs Underperform BTC

I checked the 6-month returns of Nerdwallet’s Top 10 Best ETFs and, guess what? All 10 of them have underperformed Bitcoin’s return over the same period.

I know this is a bit of a small sample size. After all, a 6-month window isn’t very long. There’s a chance that these funds will go on to outperform BTC over the next 1 year, 5 years, or 10 years. But, I doubt it. Over the past 6 months, most of these ETFs weren’t even close to mirroring BTC’s return. They have all underperformed BTC by 20-30% or even more in some cases.

So, again, you’re essentially paying a company a fee to underperform the return of Bitcoin. On top of that, buying a Bitcoin ETF goes against everything that Bitcoin stands for.

A Bitcoin ETF is Against Bitcoin’s Ethos

If you’re a fan of Bitcoin and the decentralized finance movement then you know that bitcoin is all about people regaining control over their money. Right now, money is controlled by the government, central banks, and consumer banks. 

1. The government takes your money through taxation
2. The central bank devalues your money through inflation
3. Consumer banks determine what you can or can’t do with your money.

Whenever you want to do something with your money, one of these three entities is standing by to make your life difficult.

Didn’t pay enough taxes? Here’s the government ready to audit you and demand all of your financial information.

Saving money so that you can buy a home? Well, the Fed raised interest rates so now you can’t afford the mortgage.

Want to send money to a friend? The bank says you have to wait until Monday.

The main purpose of Bitcoin is to solve issues in our financial system and eliminate financial middlemen. In doing so, Bitcoin gives you more control over your finances. If you buy a Bitcoin ETF then you’re just perpetuating the system that already exists. Bitcoin might not be a perfect solution to all of the problems I listed above. But, it’s the best alternative we have if we want to regain control over our money.

That said, even though I’m opposed to buying a Bitcoin ETF, I still think buying Bitcoin is a great idea. Here’s why.

Bitcoin’s Pending Surge

TLDR: Trillions of dollars will soon be invested in BTC = prices goes up.

The SEC’s decision to allow Bitcoin ETFs has ushered in a new age for the cryptocurrency industry. With this new rule, Bitcoin is no longer a fringe asset that’s used by drug dealers to launder money. Instead, BTC is officially a legitimate financial product that’s certified and approved by the world’s biggest financial institutions. This is a massive context switch.

During its initial announcement, the SEC said that it approved 11 applications for BTC ETFs. Over the coming years, I’m sure that dozens more funds will enter the industry. This means that wealth advisors around the world are starting to advise their clients to buy Bitcoin and other crypto assets. This will trigger a massive influx of money into BTC.

Visual Capitalist estimates that there are 59.4m millionaires in the world. These people make up just 1.1% of the world’s population. But, they account for roughly 45.8% of the world’s wealth – which is approximately $210 trillion. The overwhelming majority of these millionaires do not manage their own wealth. When you think of the average millionaire, you conjure up images of:

1. Trust fund kids whose family owns businesses, real estate, or similar assets
2. Famous celebrities like actors, athletes, singers)
3. High-paid professionals like doctors, lawyers, CEOs

Do you really think any of these personalities are sitting around managing their own wealth? Absolutely not.

Imagine The Rock balancing his portfolio each quarter. Or, America’s top brain surgeon buying shares of $VOO on Robinhood (Nasdaq: HOOD). Not happening. For the most part, wealthy millionaires have someone else manage their money. Usually, a family office or similar high-end wealth management service. I’m talking about the types of investment firms that require $50 million in assets just to schedule a meeting.

Over the coming years, these private family offices will start to recommend BTC ETFs to their clients. This will result in trillions of dollars of privately managed wealth pouring into Bitcoin – likely resulting in a massive spike in price. Even if just 1% of privately managed wealth is invented in Bitcoin, it will result in $2.1 trillion flowing into BTC over the coming years.

I feel especially strong about this, thanks to the great wealth transfer.

Will BTC Replace Gold?

I have a very strong conviction that Bitcoin will eventually replace gold as the world’s default “safe haven” investment. I say this because America is currently undergoing the greatest wealth transfer of all time. 

Over the next two decades, Baby Boomers will transfer $84 trillion to their kids (Mainly, Millennials and Gen Z). This means that many younger generations will suddenly find themselves responsible for investing the family fortune. And, they’ll likely show a stronger preference for Bitcoin and crypto than their parents did.

Most advisors recommend keeping between 5% to 10% of your portfolio in gold. These talking points have been repeated so often that few people dare to question them. However, I think this mentality will gradually start to change over time. After all, how many younger investors are really interested in buying gold? For the most part, they only do it because “it’s what you do.”

But, you can’t spend gold. It barely increases in price (compared to other assets). You can’t even really use it, outside of jewelry or fashion pieces. BTC, on the other hand, can be easily transferred, spent, sent to friends/family, and has proven to increase dramatically in value over time. For these reasons and more, I believe that BTC will eventually replace gold as the default “safe haven” investment.

Anyway, I hope that you’ve found this article valuable when it comes to learning why you should never buy a Bitcoin ETF. If you’re interested in reading more, please subscribe below to get alerted of new articles.

Disclaimer: This article is for general informational and educational purposes only. It should not be construed as financial advice as the author, Ted Stavetski, is not a financial advisor. 

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Is SPDR S&P 500 ETF a Good Investment?

Over the past few decades, many institutional and retail investors have increasingly turned to passive ETFs because they cater to a more hands-off approach. Additionally they offer lower costs, transparency, flexibility and are tax efficient. SPDR S&P 500 ETF is one such ETF on many investors’ radar. But, is SPDR S&P 500 ETF a good investment? Let’s examine this popular ETF to find out.

What Is SPDR S&P 500 ETF?

The SPDR S&P 500 ETF or SPY ETF tracks stocks in the S&P 500 Index as measured by market capitalization. These include 500 of the largest (large-cap) publicly traded U.S. companies across all 11 GICS sectors. In January of 1993, State Street Global Advisors began trading the SPY ETF. It was the first ever ETF listed in the United States.

With a trading volume of around 73 million, the SPY ETF is extremely popular. Stocks in the SPY ETF are chosen by a committee with considerations for market size, liquidity and strength of industry. Currently the fund carries a lot of big tech stocks, such as Apple Inc (Nasdaq: AAPL), Microsoft Corporation (Nasdaq: MSFT) and Google – Alphabet Inc Class A (Nasdaq: GOOG).

The performance of the S&P 500 is a primary indicator of the health and stability of the United States economy. The SPY ETF has been through three recessions, bull and bear markets, as well as the longest economic expansion in U.S. history.

SPY ETF Overview

• 10-Year Performance 11.04%
• Expense Ratio: 0.09%
• Yield 1.91%
• Number Of Stocks: 506
• Top 10 Holdings: 25.1%

What Does “SPY” Stand For?

Why Are Reddit Investors Buying SPY ETF?

When you think of Reddit, and subreddits for investors, what’s the first thing that comes to mind? I’m betting it’s not diversification or risk management. But that’s exactly what we’ve been seeing lately. SPDR S&P 500 ETF is trending on Reddit ahead of stocks like GameStop Corp. (NYSE: GME) and Tesla Inc (Nasdaq: TSLA).

Recently Reddit and other social platforms decided to make Bed Bath & Beyond Inc (Nasdaq: BBBY) their latest meme stock. We all saw how that worked out. BBBY stock has fallen 70% and as I wrote earlier this week…

Bed Bath & Beyond has continued its massive downsizing. This week, the company released a list of the first 56 stores that would be closing. Leadership had previously stated that the closing of 150 of their “lower-producing” banner stores would be part of the ongoing changes. In addition to the store closings, Bed Bath & Beyond has released more than 20% of their staff.

So needless to say, that hasn’t worked out so well. Many of those impulsive meme investors may be looking to improve their chances of success. So, have Reddit investors traded in their meme stock tendencies for sound, diversified investing? Or is this simply a reaction to the ongoing bear market? Only time will tell, but it is refreshing to see nonetheless.

Is SPDR S&P 500 ETF a Good Investment?

The SPDR S&P 500 ETF does not come with zero risk. If fact, it’s considered to be suitable for investors looking to take on a moderate degree of risk. However, the SPDR S&P 500 ETF Trust has a four-star Morningstar rating and has generated an average annual return of around 10% since inception. And as we’ve seen in the past, regardless of what is happening in the world, the S&P always seems to recover from downturns.

Rather than hand-picking stocks or bonds for the fund, a fund manager buys all of the assets that the index tracks. So instead of you having to worry about diversification and tracking dozens of stocks, the SPDR S&P 500 ETF removes all the guesswork. This is a huge benefit that comes alongside a great track record. SPY ETF has a current expense ratio of 0.09%, which is the ETF equivalent of fund management fees.

SPDR S&P 500 ETF Dividend

SPY has a dividend yield of 1.65% and paid $6.18 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Sep 16, 2022.

SPDR S&P 500 ETF Top 10 Holdings

SPY Sector Weightings (%)

Final Thoughts on SPDR S&P 500 ETF

Since the SPDR S&P 500 ETF replicates the S&P 500 Index, it is ideal for passive index investing. Additionally, the fund does have a 1.65% dividend yield, making it an even more enticing buy. And with an average annual return of 10% it’s ideal for buy and hold investors.

If you’re an investor in the S&P 500, you may want to consider following IU Einstein Alexander Green. Since Alexander Green’s first recommendation in 1999, the average Oxford Communiqué (our flagship newsletter) position has returned 23.61%, versus the S&P 500’s average return of only 10.74%… That’s more than DOUBLE the returns of the S&P 500.

Is SPDR S&P 500 ETF a good investment? For the answer to this question and more, consider signing up for one of our free newsletters. Visit our best investment newsletters page and select a mailing that works for you. Join today to become a smarter, more profitable investor.

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Smart Beta Investing Has Underlying Problems

Whether markets are up or down, investors are always looking for ways to beat the odds. Everyone wants to feel like their investing strategy is as solid as it possibly can be, regardless of the market conditions. One such strategy is a smart beta investing approach.

What is Smart Beta Investing?

Roughly fifteen years ago, a professional services firm called Towers Watson coined the term “smart beta.” However, the term was around long before that, dating back to the 1970s. It took more than 30 years for the first beta ETF to launch in 2003. Since then, smart beta fund managers have been tweaking and refining their investment strategies and methodologies.

According to ETF.com, “with 1,209 ETFs traded on the U.S. markets, Smart Beta ETFs have total assets under management of $1,574.77B. The largest Smart Beta ETF is the Vanguard Value ETF VTV with $101.00B in assets.”

Smart beta refers to enhanced indexing strategies that seek to exploit certain performance factors in an attempt to outperform a benchmark index. Smart beta investing is essentially a combination of both active and passive investing. Taking the best of the two for the most optimal outcome.

Smart beta aims to give investors an edge by lowering risk, increasing diversification and decreasing overall cost. All this while creating the most optimal portfolio possible. Efficiency and value are the two main points of interest. At least one or more of these factors are rolled up into customized indexes or ETFs. However, as IU Einstein and Quantitative Expert Nicholas Vardy explains…often the instant a smart beta strategy is introduced through an ETF, it stops working.

The Underlying Problem

Just last month, Nicholas Vardy wrote an article for Liberty Through Wealth called “The Underlying Problem with Smart Beta ETFs“. In it he explains some of the less noted issues with the investing approach.

“These smart beta ETFs bet on factors like momentum or the Dividend Aristocrats to beat the market. Each of these strategies is backed by research conducted at the world’s leading investment firms and business schools. Yet I’ve been disappointed by the real-world performance of smart beta ETFs. It seems that the instant a strategy is introduced through an ETF, it stops working.”

Nicholas goes on to reference an essay from Stanford Medicine professor John Ioannidis, called ‘Why Most Published Research Findings Are False”. In it, Ioannidis reveals how the “results published in many medical research papers cannot be replicated by other researchers.” Ioannidis’ financial counterpart, Campbell Harvey, a professor of finance at Duke University, estimates that “at least half of the 400 “market-beating” strategies identified in top financial journals over the past years are worthless. He challenges academics to take any so-called winning strategy and ask a different set of researchers to replicate it. And chances are about 50-50 that they can’t. Even worse, Harvey argues that his fellow academics are in complete denial about the problem.”

Data Manipulation

Vardy then goes on to talk about how smart beta data can be manipulated…

“In statistics, a p-value represents the probability that a finding is statistically significant – attributable to an actual factor and not pure chance. For example, it will show whether a particular drug works or whether value stocks outperform over time.

The problem is this: Researchers twist the data – blatantly or subconsciously. They may cherry-pick the metrics used or adjust the time period studied to obtain a statistically significant result. We can blame “the system” for this problem.

Young finance professors can publish a paper with an eye-catching find in a prestigious journal – and they just might get tenure. As a result, investment strategies that look terrific on paper often flop in the real world.”

Smart Beta Investing – Summarized

As Nicholas and others have pointed out, many of the strategies surrounding smart beta investing are quite impressive. However, now that the term smart beta has been around for more than a few decades, it has lost some of its magic. The real world performance of smart beta ETFs has often missed the mark.

To learn more about smart beta investing, value investing, insider trading and more…sign up for one of our free e-letters today. Just visit our best investment newsletters page and select a free mailing that fits your investing style. If you’d like to follow more of Nicholas Vardy’s work, sign up for Liberty Through Wealth today.

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The 3 Best Healthcare ETFs to Buy

The U.S. healthcare industry is monstrous. In 2020, Americans collectively spent a combined $4.1 trillion on healthcare according to information from Insider Intelligence. With 330 million U.S. citizens, this comes out to approximately $12,400 per person. Additionally, thanks to an exponentially growing population, this market is likely not slowing down anytime soon. Analysts expect that the U.S. healthcare industry could grow to as much as $6.2 trillion by 2028. This means that identifying the best healthcare ETFs to buy should be a big focus for investors over the coming years.

Benefits of Healthcare ETFs

An exchange-traded fund (ETF) is a fund that invests in a large portfolio of securities. ETFs are designed to track a particular index, sector, commodity, or asset. The most common example of an ETF is the SPDR S&P 500 ETF. Furthermore, this fund tracks all the companies in the S&P 500. The ETFs listed below all track companies that operate in the healthcare industry.

There are plenty of benefits to investing in ETFs. To start, buying shares in one of the ETFs below will instantly diversify your portfolio. Instead of owning one or two healthcare stocks, you can invest in the entire industry. One way to envision this is to think of a fruit bowl. Instead of buying one whole piece of fruit, you can buy a fruit bowl. With a fruit bowl, you get a few slices of many different types of fruit.

ETFs are also lauded as a more reliable alternative to stock picking. Investing in ETFs reduces the time, stress, and risk of picking stocks yourself. If you prefer to, you can spend hours researching all the different healthcare companies. Or, on the other hand, you can just buy an ETF and get exposure to the entire industry.

Last, ETFs are known for having incredibly low fees. Over time, investing in low-fee funds can greatly enhance your total return.

With that in mind, let’s examine the three best healthcare ETFs to buy. To come up with this list, I selected the three largest ETFs based on total assets under management (AUM). “Assets under management” is the total amount of money that the fund manages for investors. In general, larger funds are likely to be more reliable.

No. 3 Health Care Select Sector SPDR Fund (NYSE: XLV)

Assets Under Management: $38.6 billion

The Health Care Select Sector SPDR Fund is by far the biggest healthcare ETF. In fact, it’s over twice as large as the next biggest fund. This, by itself, qualifies it as one of the best healthcare ETFs to buy. The Health Care Select Sector SPDR Fund seeks to give investors exposure to the overall healthcare industry. It does this by investing in companies that operate in pharmaceuticals, health care equipment, biotechnology and healthcare providers. The bulk (28.4%) of the fund’s holdings are companies that operate in the pharmaceutical space.

This fund’s top holdings are UnitedHealth Group, Johnson & Johnson, Pfizer, AbbVie and Thermo Fisher. It’s down 6% so far YTD but up 63% over the past five years.

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How to Short Crypto: Four Ways to Capitalize off Market Downturns

The crypto markets have been in a freefall since hitting highs in late 2021. And many folks think things are poised to continue to fall amidst the current crypto winter. Some crypto tycoons like Richard Heart (the guy behind Hex and PulseChain) think this correction could drag Bitcoin all the way back down to $11,000 a token. If that turns out to be true, knowing how to short crypto could be a very lucrative proposition. And we’re here to help.

Just a couple years ago, the idea of Bitcoin hitting $11,000 would be cause for celebration among crypto devotees. But for those that got in at the height of the recent crypto boom, it could feel catastrophic. Which is why we’re going to show you four ways to try and make up some of those losses should Bitcoin continue its downward trajectory.

How to Short Crypto No. 1: Margin Trading

Crypto purists may not be too enthusiastic about centralized exchanges. But crypto’s growing popularity made it a necessary evil to draw in more folks. Anyone that’s stumbled through the annoying process of buying crypto on decentralized exchanges should get it. Plus, they made it easier than ever to trade fiat currency for digital coins.

But in addition to simplicity, most centralized exchanges allow for margin trading. Now typically, margin trading is done to maximize returns on upward movement. However, some exchanges like Kraken and Binance allow folks to borrow tokens outright. From here, folks can then sell those tokens right back on the market.

Eventually, the brokerage is going to want their tokens back though. If the tokens continue to go down in value, that’s not a big deal. You just buy them at the (hopefully) lower price. Then once you return them, you can simply pocket the difference. When it comes to learning how to short crypto, this is probably the easiest. And it doesn’t require signing up for new accounts with another service. You can learn more about margin trading here.

Short Strategy No. 2: Futures Markets

When Bitcoin and its crypto brethren went big in 2017, it grew so popular that a futures market was built around some of the larger tokens. These days, the Chicago Mercantile Exchange (CME) allows folks to short crypto. Here’s how it works…

To short crypto, you essentially sell a futures contract. This is a bet that the price will go down in the future. Here, someone buys the contract from you for the going price of a token. Then when they demand their cryptocurrency contract filled by the seller, he or she would simply buy the tokens at the lower price and fulfill their end of the obligation, pocketing the difference.

These days, it’s not just the CME that offers derivatives trading. Popular exchanges like Kraken, eToro and even TD Ameritrade offer ways to trade futures contracts now. In fact, this might be an even easier way to learn how to short crypto for folks that are unfamiliar with some of the popular crypto exchanges. And if you’d like to learn more about futures trading, just follow this link.

The Big (Crypto) Short No. 3: Inverse ETFs

Those familiar with the stock market should know there’s an ETF for seemingly everything. Betting inflation will continue to rise? There are a whole bunch of them to invest in. Think space travel stocks are about to see a boon in popularity? Look no further than the Procure Space ETF (Nasdaq: UFO). So naturally, there are several of them based on profiting from Bitcoin’s breakdown.

One of the first inverse crypto ETFs to hit the market was BetaPro Inverse Bitcoin ETF, which is traded on the Canadian stock exchange. Since then, the ProShares Short Bitcoin Strategy ETF (NYSE: BITI) has been launched here in the U.S. And there are likely more to follow soon.

And now that you’ve learned how to short crypto the three easiest ways, we’ll close out with one with a bit more of a learning curve…

Short Play No. 4: Prediction Markets

You’re probably aware that you can go to the FanDuel website or pop open the Caesars Sportsbook app on your phone to bet on sports. If you want to try and predict who’s gonna win the Superbowl, the World Series or the World Cup, it’s that simple. Guess right and you can be handsomely rewarded. Well, there’s a similar process for betting on which direction crypto will go.

These prediction markets might fall more in favor with those looking for a pure crypto play too. There are several decentralized prediction markets out there to choose from. Gnosis, for instance, is a platform for prediction market applications on the Ethereum blockchain. PlotX is a cross-chain prediction market protocol. This one makes it so users can make crypto price predictions in hourly, daily or weekly timeframes.

Then there’s Polymarket. This is an outlet for betting on a wide variety of hot topics. Want to make a wager that you know how long Vladimir Putin will stay in power? How about whether Jack Dorsey returning as CEO of Twitter (NYSE: TWTR)? The list of things you can bet on at the Polymarket website is a long one. And naturally, there are all sorts of crypto-related ones.

Here you can bet whether Celsius Network will announce its bankruptcy by July 13? Do you think Ethereum (ETH) will be above $1,200 on July 1? So far, the yes votes are winning. So a bet that it won’t could lead to a tidy payout.

So if you came here wondering how to short crypto, now you’ve got four easy ways to go about it. That being said, we do have some advice…

The Bottom Line on How to Short Crypto

Predicting which way the markets are going to go at any given time is nearly impossible. And that’s doubly true when it comes to cryptocurrencies. At least in the stock market investors have access to a wide array of fundamental information to make a more educated bet. But we don’t quite have the same thing when it comes to crypto.

Sure, we can read the whitepapers, look at trading volume and seemingly follow the influx or efflux of cash toward a given token. But shorting the crypto markets comes with a fair share of risk. The crypto markets are extremely volatile. Sudden increases in price can happen at a moment’s notice.

So just because you know how to short crypto, doesn’t necessarily mean you should. And even if you think you’ve got a hot tip that’s telling you which way crypto prices are going, remember, don’t bet more than you can comfortably lose. Short positions can cost investors a lot of money. They’ve even been responsible closing down some hedge funds. So be careful out there and good luck.

The post How to Short Crypto: Four Ways to Capitalize off Market Downturns appeared first on Investment U.

6 Infrastructure ETFs to Watch in 2022

Infrastructure ETFs offer investors a diversified approach to this lucrative sector. Moreover, the infrastructure industry sits at the brink of global disruption. Investors can get in on companies making the changes that are shifting capital availability, changing environmental priorities and rapid urbanization. Moreover, this presents a unique opportunity for investors to get in early on disruptions in this sector.

List of 6 Infrastructure ETFs

• Global X U.S. Infrastructure Development ETF (BATS: PAVE)
• iShares Global Infrastructure ETF (Nasdaq: IGF)
• FlexShares STOXX Global Broad Infrastructure Index Fund (NYSE: NFRA)
• iShares U.S. Infrastructure ETF (BATS: IFRA)
• SPDR S&P Global Infrastructure ETF (NYSE: SSGA)
• Alerian Energy Infrastructure ETF (NYSE: ENFR)

Below, I’ll go over the highlights for these infrastructure funds below. This includes a description of each fund, the fund’s top holdings and investor returns.

Infrastructure ETFs to Buy in 2022

Global X U.S. Infrastructure Development ETF

Expense Ratio: 0.47%

Holdings: 98

The Global X US Infrastructure Development ETF offers exposure to domestic infrastructure development. The list includes companies with a focus on construction and engineering, raw materials, composites and transportation companies. It also includes companies with a heavy focus on construction equipment production and distribution. It seeks to track the S&P Global Infrastructure Index.

PAVE manages assets worth around $4 billion, making it the largest dedicated infrastructure ETF on Wall Street. Among its holdings are stocks that are publicly traded in the construction materials, heavy equipment, engineering and construction sectors.

The portfolio has a broad scope despite a targeted approach. Global X U.S. Infrastructure Development ETF has about 98 total positions. Some of the company’s top holdings include Nucor, Sempra Energy, Deere & Co., Fastenal and CSX. Moreover, this fund is highly diversified with no assets representing more than around 4% per holding.

Similar to the performance of the rest of Wall Street, the fund has lost about 20% this year so far.

iShares Global Infrastructure ETF

Expense Ratio: 0.43%

Holdings: 75 

The iShares Global Infrastructure ETF offers exposure to companies that provide transportation, communication, water and electricity services. It also seeks to track the S&P Global Infrastructure Index.

The index tracks the performance of the stocks of large infrastructure companies around the world. It contains companies in developed markets around the world. So, you should keep in mind that this fund is not exclusive to U.S.-based stocks. However, nearly 40% of this ETF contains U.S.-based companies. Moreover, some of the international companies in this ETF do business in the states. If you’re looking to invest in a domestic infrastructure ETF, check out the iShares U.S. Infrastructure ETF in the list below.

This fund currently has more than $3 billion in total assets. Its top holdings include Atlantia, Transurban, Enbridge, Aena and NextEra Energy. This fund is highly diversified, similar to the infrastructure ETF above. Its top holding carries 5% of the fund.

This infrastructure ETF is faring well despite ongoing market volatility. The fund is down around 3% so far in 2022.

FlexShares STOXX Global Broad Infrastructure Index Fund

Expense Ratio: 0.48%

Holdings: 220

FlexShares STOXX Global Broad Infrastructure Index Fund seeks to track STOXX Global Broad Infrastructure Index. The index reflects the performance of public infrastructure companies in the developed and emerging markets. It targets loosely-defined infrastructure sectors including energy, communications, utilities, transportation and government outsourcing.

This fund has around $2 billion in total assets. However, this fund is the largest infrastructure ETF in terms of holdings. The fund currently has around 220 holdings. Its top holdings consist of the Canadian National Railway, Canadian Pacific Railway, Verizon, Comcast and Enbridge. Similar to the ETFs above, this fund is highly diversified. Its top holding accounts for 5% of the entire fund.

This fund is in the red so far in 2022 with it being down 12%. However, it’s performing relatively well compared to the rest of the market. The fund’s stability is largely due to this fund’s diversification.

iShares U.S. Infrastructure ETF

Expense Ratio: 0.30%

Holdings: 163

The iShares U.S. Infrastructure ETF tracks the NYSE FactSet U.S. Infrastructure Index. It offers exposure to two groups of infrastructure companies: owners and operators, such as railroads and utilities, and enablers, such as materials and construction companies. So, investing in this fund can provide investors with access to infrastructure companies that may benefit from increased infrastructure activity in the United States.

This infrastructure ETF is smaller than the rest with assets reported around $1 billion. Despite this, this fund is one of the most diversified on this list. It has over 160 holdings in total. Furthermore, each stock in this fund accounts for less than about 1% of the portfolio. So, the wide diversification helps combat market volatility.

This infrastructure ETF is down nearly 13% in 2022. However, this fund is promising long-term with returns of nearly 30% in the last five years. So, this fund should pick up when the market cools down a bit.

SPDR S&P Global Infrastructure ETF

Expense Ratio: 0.40%

Holdings: 75

The SPDR S&P Global Infrastructure ETF seeks to track the performance of the S&P Global Infrastructure Index. The index comprises 75 of the largest publicly listed infrastructure companies.

The index has exposure to companies across transportation, utility and energy infrastructure sub-industries. Approximately 42% of its portfolio consists of industrials and 39% focuses on utilities. The remaining 20% consists of energy stocks.

This infrastructure fund’s top holdings include Atlantia, Transurban, Enbridge, Aena and NextEra Energy. Moreover, this fund is similar to the others with its diversification. The top holding in this fund carries around 5% weight in the fund.

This fund is holding up well with ongoing market volatility with -3% returns in 2022. So, this is one of the promising infrastructure ETFs as the market goes back to normal.

Alerian Energy Infrastructure ETF

Expense Ratio: 0.35%

Holdings: 33

The Alerian Energy Infrastructure ETF targets the Alerian Midstream Energy Select Index. This index includes companies operating in the midstream energy infrastructure sector in North America. It includes corporations and master limited partnerships (MLPs) dealing with pipeline transportation, rail and energy storage and processing.

Approximately 90% of the fund’s holdings are in companies involved in the gathering, processing and transportation of natural gas and petroleum. Its top holdings include Enbridge, Enterprise Products Partners, TC Energy, Energy Transfer and Cheniere Energy. This fund is less diversified than the others on this list with its top three holdings representing over 25% of the fund.

This ETF is in the green so far in 2022 with returns over 6% year-to-date. Moreover, with the rest of the market generally in the red, this presents a huge opportunity for investors looking to get in on diversified infrastructure stocks.

The Final Line on Infrastructure ETFs

Infrastructure ETFs offer investors a diversified, lower-risk approach to investing in this sector. Moreover, investing in disruptors of the industry can produce big returns for investors.

However, make sure to do your research before investing. Returns on investments are never guaranteed and there are always risks with investing. However, this is where doing a deep dive on a fund can make all the difference.

For other infrastructure investment opportunities, check out these infrastructure stocks. There are lots investment opportunities to consider today…

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