ETFs have a reputation for being safe investments. Not only do they tend to minimize risk by tracking entire indexes, but they also tend to have much lower costs than mutual funds. ETFs are usually a great way for an investor to easily diversify their portfolio with minimal risk.
However, that does not mean that all ETFs are low risk.
Depending on the index it tracks, a given ETF can hold as many poor stocks as the worst mutual fund. This is why you always need to do proper diligence on all of the holdings of each ETF you invest in.
We do all of this diligence for you. We apply our work on almost 3,000 individual stocks to the holdings of all of the ETFs we cover, and we’re able to rate each fund on the quality of its holdings. When combined with our total annual costs rating, which takes into account all of the costs of being in a given fund for the average holding period, this level of diligence allows us to have the most complete and transparent fund ratings in the business.
The following is a list of the riskiest ETFs under our coverage.