Investors can spread risk across US stocks, international markets, bonds, real estate and inflation-protected securities using exchange-traded funds. Broad-market funds such as Vanguard Total Stock Market ETF (VTI) and Vanguard Total International Stock ETF (VXUS) can form the core of a portfolio, while bond and sector ETFs provide additional exposure to different parts of the market.
Building a diversified investment portfolio does not necessarily require buying dozens of individual stocks. A selection of exchange-traded funds (ETFs) can provide exposure to thousands of securities across different markets and asset classes.
The following 10 ETFs cover different roles within a portfolio. They are examples for research rather than a ranking of expected returns or a recommendation to buy every fund.
10 ETFs for Different Parts of a Diversified Portfolio
1. Vanguard Total Stock Market ETF (VTI)
Vanguard Total Stock Market ETF (VTI) provides broad exposure to the US equity market, including large, mid-sized and small companies.
It can serve as a core holding for investors who want exposure to a wide range of US businesses through one fund. Because it owns stocks across the market, however, it remains exposed to broad equity-market declines and has significant exposure to the largest companies.
2. Vanguard Total International Stock ETF (VXUS)
Vanguard Total International Stock ETF (VXUS) invests in stocks outside the US, including companies in developed and emerging markets.
Pairing an international fund with a US stock ETF can reduce reliance on one country's market. International stocks can still decline during global sell-offs and may introduce currency and geopolitical risks.
3. Vanguard S&P 500 ETF (VOO)
Vanguard S&P 500 ETF (VOO) tracks the S&P 500, which represents large US companies across major industries.
The fund provides exposure to established businesses without requiring investors to select individual stocks. However, it overlaps substantially with VTI, so holding both does not necessarily provide as much additional diversification as adding a different asset class or international exposure.
4. Vanguard Total Bond Market ETF (BND)
Vanguard Total Bond Market ETF (BND) provides exposure to a broad range of US investment-grade bonds.
Bonds can help balance a portfolio dominated by stocks and provide income. Their prices can still fall when interest rates rise, while corporate bonds also carry credit risk. Investors should consider the fund’s duration and the role bonds play in their overall allocation.
5. Vanguard Total International Bond ETF (BNDX)
Vanguard Total International Bond ETF (BNDX) holds investment-grade bonds issued outside the US. The fund generally hedges foreign-currency exposure back to the US dollar.
It can broaden the fixed-income portion of a portfolio beyond domestic bonds. Its performance depends on international interest rates, credit conditions and currency-hedging effects.
6. Schwab US Dividend Equity ETF (SCHD)
Schwab US Dividend Equity ETF (SCHD) focuses on US companies selected using dividend-related and fundamental measures.
It may appeal to investors seeking equity income and exposure to established dividend-paying businesses. Dividends are not guaranteed, and a dividend-focused strategy can underperform broader markets during periods when high-growth stocks lead.
7. Schwab US REIT ETF (SCHH)
Schwab US REIT ETF (SCHH) invests in US real estate investment trusts, giving investors exposure to publicly traded property companies.
Real estate can provide a different source of income and market exposure from conventional stocks and bonds. REITs are sensitive to borrowing costs, property valuations, occupancy rates and economic conditions, so they are not a guaranteed hedge against stock-market losses.
8. Schwab US TIPS ETF (SCHP)
Schwab US TIPS ETF (SCHP) invests in Treasury Inflation-Protected Securities, whose principal adjusts with changes in the US Consumer Price Index.
TIPS can help protect purchasing power against inflation over time. Their market prices can still decline when real interest rates rise, and inflation protection does not eliminate all investment risk.
9. Vanguard FTSE Emerging Markets ETF (VWO)
Vanguard FTSE Emerging Markets ETF (VWO) provides exposure to companies in emerging economies.
Emerging markets can add geographic diversification and access to economies with different growth drivers from the US. They can also experience greater volatility due to currency movements, political changes, market liquidity and differences in corporate governance.
10. Vanguard Total World Stock ETF (VT)
Vanguard Total World Stock ETF (VT) holds stocks from both US and international markets, offering global equity exposure through one fund.
It can simplify portfolio construction for investors who want a broad global stock allocation. Because it is an equity fund, it does not replace bonds or cash for investors who need lower volatility or funds for near-term spending.
Investors comparing these options can also consult Schwab’s ETF overview for information on fund categories, expenses and portfolio construction.
How to Combine ETFs Without Duplicating Exposure
Owning more ETFs does not automatically make a portfolio more diversified. VTI and VOO, for example, overlap heavily in large US companies. Adding both may increase the number of fund positions without meaningfully broadening the underlying exposure.
A simpler portfolio can combine a broad US stock fund, an international stock fund and a bond fund. Investors who want a single global equity holding could consider VT, then determine separately whether bonds or other assets are appropriate for their goals.
The traditional 60/40 portfolio is another framework investors use, with 60% allocated to stocks and 40% to bonds. It is not suitable for everyone, and the appropriate mix depends on an investor’s capacity to withstand losses, income needs and time horizon.
Costs matter, too. Expense ratios reduce returns over time, while frequent trading can create additional costs and potential tax consequences. Diversification can reduce the impact of poor performance in one company, but it cannot eliminate losses. Investors should review their allocations periodically and rebalance when their portfolio moves materially away from their intended mix.
For more guidance on investing and building long-term wealth, the central principle is to select funds that serve distinct purposes rather than collecting ETFs without a clear plan.