3 Great ETFs for 2026 and Beyond

Key Concepts

• Diversification: Spreading investments across different asset classes (stocks, bonds) and geographies (US, International) to reduce risk.
• ETFs (Exchange Traded Funds): Investment funds traded on stock exchanges, offering diversified exposure to specific markets or asset classes.
• Market Cap Weighting: An index construction method where investments are proportional to the company’s market capitalization (share price x shares outstanding).
• Basis Points: A unit of measurement used in finance to describe the percentage difference in yield; 100 basis points equals 1%.
• Duration: A measure of a bond's sensitivity to interest rate changes.
• Credit Risk: The risk that a bond issuer will default on its debt obligations.
• Yield Curve: A graphical representation of the yields of bonds with different maturities.
• Investment Grade: Bonds with a relatively low risk of default, as rated by credit rating agencies.

Market Performance in 2025 & the Importance of Diversification

2025 saw strong performance across various asset classes, including US and international stocks, and even bonds benefiting from rate cuts. Despite a volatile period in April, markets largely trended upwards. However, the April sell-off highlighted the importance of diversification. The speaker emphasizes that relying on a single market or asset class can be detrimental to a portfolio, advocating for diversification across both countries and asset classes to mitigate risk. This diversification allows investors to “sleep soundly at night knowing that one stock, one bond, or one market won't derail their retirement plans.”

Vanguard Total World Stock ETF (VT)

The Vanguard Total World Stock ETF (VT) is presented as a strong option for global diversification. It holds approximately 10,000 stocks across over two dozen countries, with an annual expense ratio of just six basis points. VT receives a Morningstar Medalist rating of Gold. The ETF tracks a market-cap weighted index, meaning larger companies receive a greater allocation. This approach is considered efficient as it reflects the market’s collective valuation of each stock and minimizes turnover. While the US receives significant weighting due to the performance of large tech companies like Nvidia, the ETF is positioned to benefit from growth in other markets when US stocks underperform. The speaker notes, “It’s a snapshot of the global stock market.”

State Street Spider Portfolio S&P 500 ETF (SPYM)

The State Street Spider Portfolio S&P 500 ETF (SPYM), recently rebranded with a new ticker, provides exposure to the US stock market at a very low cost. Its expense ratio is only two basis points, earning it a Gold Morningstar Medalist rating. SPYM tracks the S&P 500 index, which comprises the 500 largest US companies. Like VT, it is market-cap weighted. The index also incorporates a quality tilt by requiring new entrants to be profitable. The speaker highlights that many companies within the S&P 500 possess “durable competitive advantages,” making it an efficient and cost-effective way to access the US market. The S&P 500 is described as a well-known and “great index.”

Dimensional Core Fixed Income ETF (DFC)

The Dimensional Core Fixed Income ETF (DFC), launched in 2021, offers a unique approach to bond investing. With an expense ratio of 17 basis points, DFC aims to outperform the market by actively managing its duration and credit risk profile. The fund’s managers analyze current bond prices to identify those with the highest expected return potential, while adhering to a global investment-grade mandate. The strategy dynamically adjusts its portfolio: tilting towards shorter-term bonds when the yield curve is flat or inverted, and towards lower-rated bonds when credit spreads widen, and vice versa. This systematic approach is intended to provide a competitive edge over passive bond funds. The speaker states these “measured leans should give the fund a leg up on passive competitors.”

Connecting the ETFs & Long-Term Strategy

The three ETFs – VT, SPYM, and DFC – are presented as complementary components of a diversified long-term investment strategy. VT provides broad global equity exposure, SPYM focuses on the US equity market, and DFC offers fixed income diversification. The speaker explicitly recommends holding these ETFs “well past 2026,” emphasizing a long-term investment horizon. The logical connection between the sections is the overarching theme of diversification and the presentation of specific, low-cost ETFs to achieve it.

Data & Statistics

• VT Expense Ratio: 6 basis points
• VT Holdings: Approximately 10,000 stocks across >2 dozen countries
• SPYM Expense Ratio: 2 basis points
• SPYM Holdings: Largest 500 US stocks
• DFC Expense Ratio: 17 basis points
• DFC Launch Date: 2021

Conclusion

The video advocates for a diversified investment approach, particularly through the use of low-cost ETFs. Vanguard Total World Stock ETF (VT), State Street Spider Portfolio S&P 500 ETF (SPYM), and Dimensional Core Fixed Income ETF (DFC) are presented as excellent options for achieving broad market exposure and mitigating risk. The key takeaway is that diversification is not just a theoretical concept but a practical strategy for long-term investment success, allowing investors to navigate market volatility and achieve their financial goals.