Is This Vanguard ETF a Millionaire Maker?
If you've been an investor for any length of time at all, then you've almost certainly been advised to start (and maybe even finish) with index funds like the Vanguard S&P 500 ETF. This fund is of course simply meant to mirror the performance of the S&P 500. And it is good advice. The fact is, in their efforts to "beat" the market, too many investors will actually end up underperforming it. The smart-money mindset is giving yourself the best possible chance at the best possible performance, which means first and foremost owning index funds.
Still, the idea of not trying to at least outperform the broad market is a tough pill for some to swallow. Is there not a happy medium solution that offers the best of both strategies?
There is. The Vanguard U.S. Multifactor ETF (NYSEMKT: VFMF) is a rules-based fund that only holds stocks meeting a well-defined set of criteria meant to ensure above-average quality. Although it's not based on a traditional index, it should in theory still act like one since its managers don't make any discretionary buys or sells.
Source Fool.com
