Since the fund’s inception in 2006, it has earned an average rate of return of around 14% per year. To earn at least $2 million in total savings, you’d need to save around $450 per month for 30 years while earning a 14% annual return.
3. SPDR S&P Software & Services ETF (XSW)
The SPDR S&P Software & Services ETF (NYSEMKT: XSW) includes 186 stocks, and it tracks the software and services segment of the S&P Total Market Index — which includes sub-industries such as application software, data processing, and IT consulting.
This ETF is younger than the other two on the list, as it was established in 2011. However, it’s also earned higher returns, with an average rate of return of around 22% per year since its inception. At that rate, you’d need to save around $100 per month for 30 years to accumulate $2 million.
Keep in mind, though, that because this fund doesn’t have an extensive track record, there are no guarantees you’ll see returns this high over the long run. All niche ETFs are riskier than broad-market funds, and your investments could experience higher levels of volatility.
Building a balanced portfolio
If you choose to invest in any tech ETF, it’s important to make sure the rest of your portfolio is well-diversified. In other words, don’t invest all your money into a single ETF — especially a niche ETF.
About the Author
