The best time to start investing, no matter you age is always now. But depending on your age, there are better investment options than others. I recently wrote a piece discussing a few of my favorite Exchange Traded Funds geared for all investors. Now I am working through different age groups and pointing out some of my favorite ETFs that are more focused on each age group based on where investors are in their life cycle and their interests.
A month ago I published a piece geared toward 20-year-olds, and today we are going to focus on ETF options that fit better for those in their 30's. By the time you turn 30, a few things have or will soon likely happen in your life. You will have begun progressing in your career, you are making more money than when you were in your early 20's, you may be a home owner or planning to become one, you either have started a family or again have plans to do so, and lastly maintaining your health. With those three things in mind, I have found a few ETFs that play into those life changes.
The first is the VanEck Vectors Retail ETF (PACF:RTH). I have spoken about RTH before; it's one of my favorite ETFs regardless of age, but I think it fits well in a 30-year-olds portfolio. When you're in that age bracket, you most likely have a higher income. Therefore you can spend a little more money on material things, and you don’t likely live with mom and dad anymore. You may even own a home or at the very least want your place to look and feel more adult-ish.
When I last spoke about RTH, it was in a piece on how to play the housing boom. RTH owns a lot of retail stocks that benefit from new home construction or just people moving in general. Whether it’s a purchase or just changing locations, when you move into a new place most likely you are going to buy some new stuff; new shelves, rugs, towels, furniture, who knows. But what we do know is places like Amazon.com, Target, Wal-Mart, Home Depot, Lowes, Costco Wholesale, sell that kind of "adult" stuff.
But, RTH isn't just a play on housing, it’s a play on you buying stuff in general, remember higher income through progressing with your career. RTH holds retail companies that whether or not you know it, you probably shop at on a weekly basis. Furthermore, buying shares of RTH now, and then regularly over the coming years will help you build a solid position in companies that you will probably be shopping for the next 40-50 years. (I know that sounds like a long time when you're only 30 something.) So start owning a little piece of those places you spend your hard-earned money now and maybe it won't hurt so much when you do overspend at those places.
The next ETF is the PowerShares Dynamic Leisure & Entertainment ETF (PACF:PEJ). This ETF owns a group of stocks that fall under the leisure and entertainment industries. Regardless of whether you have or haven't started a family, you are always doing something new, these companies that garner the bulk of your disposable income. Whether it's general travel, restaurants, and bars, amusement parks, or even casino's, just to name a few, PEJ focuses on four things when picking stocks to hold; the strength of a company's fundamentals is the company relevant to current times, valuation metrics, and its risk level.
PEJ typically holds around 30 stocks that and has an expense ratio of 0.61%, a little high, but is good for those 30-year-olds who travel a lot and have an adventurous lifestyle. By sector PEJ is broken down as 31% airlines, 26% restaurants and bars, 10% hotels and cruise lines, 8% casinos and 8% leisure & recreation. PEJ has been around since 2005 and is currently yielding 0.53% while boasting an 11.7 average price-to-earnings ratio for the stocks it holds.
And lastly, for those 30-year-olds that want to keep that 20-year-old body, The Health and Fitness ETF (BATS:FITS.IV) focuses on companies that are geared toward healthy, fit lifestyles. FITS is an investment play in the healthy fitness-related shift we are seeing take place in the world today. It currently holds 74 stocks with some of the top holdings consisting of Adidas AG, Nike, Foot Locker, Under Armour, Lululemon, and Dick's Sporting Goods.
Despite FITS inception date of June of 2016 and currently only having net assets of just $2.57 million, with more American's getting active and a larger push toward healthy living, FITS investors could see significant returns over the next few decades. The fund also boasts a yield of 0.73%, which will cover the expense ratio of 0.5%.
Furthermore for those 30-year-olds with little one playing sports, owning small pieces of Nike, Adidas, and even Dick's Sporting Goods may make it easier when you spend money on the growing array of activities your kids are involved with.
While the list above is not a full combination of what a 30-year-old's portfolio should look like, these ETFs should help get you started or make excellent additions to your current holdings. Perhaps you're not a 20 or 30-year-old; no problem check back soon to find out what ETFs fit your age group.
Matt Thalman
INO.com Contributor - ETFs
Follow me on Twitter @mthalman5513
Disclosure: This contributor held long positions in Dick's Sporting Goods, Under Armour, Home Depot, and Amazon at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.
