It hasn’t always been easy for Americans over the past few years — not with pandemic-fueled lockdowns, sky-high inflation, political gridlock and job layoffs at times. Yet the great American experiment survives in times of strife, and U.S. companies and financial markets are a great example of that resilience.
After all, U.S. companies make products the world wants to buy, and the U.S. stock market historically has stood at the top of the global market performers, thus giving investors a great reason to invest in U.S. publicly traded companies.
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That’s the case with these 10 exchange-traded funds, or ETFs, that are heavily invested in American companies — all of which deserve a closer look in the second half of 2023:
| ETF | Expense ratio |
| iShares Russell 2000 ETF (ticker: IWM) | 0.19% |
| ProShares S&P 500 Dividend Aristocrats ETF (NOBL) | 0.35% |
| Consumer Discretionary Select Sector SPDR Fund (XLY) | 0.10% |
| iShares U.S. Aerospace & Defense ETF (ITA) | 0.39% |
| Vanguard REIT ETF (VNQ) | 0.12% |
| Invesco Dynamic Building & Construction ETF (PKB) | 0.60% |
| Alerian MLP ETF (AMLP) | 0.87% |
| VanEck BDC Income ETF (BIZD) | 10.92% |
| iShares 20+ Year Treasury Bond ETF (TLT) | 0.15% |
| SPDR Nuveen Bloomberg Municipal Bond ETF (TFI) | 0.23% |
iShares Russell 2000 ETF (IWM)
This ETF aims to track the performance of the small-cap sector of the economy and held nearly $49 billion in assets as of June 30. The fund has returned 8.1% year to date, which has underperformed the S&P 500’s gain of 15.9% for the first half of 2023. Yet, it’s stocked with up-and-coming U.S. companies like Super Micro Computer Inc. (SMCI), Shockwave Medical Inc. (SWAV) and Texas Roadhouse Inc. (TXRH).
With the increasingly benign U.S. inflation rate favoring small businesses, IWM is a tried-and-true positive performer in the small-cap ETF field year after year that could accelerate as the economy picks up speed.
Expense ratio: 0.19%, or $19 per $10,000 invested
ProShares S&P 500 Dividend Aristocrats ETF (NOBL)
Investors looking to pad their passive income portfolios with recurring dividend payments should take a closer look at the ProShares S&P 500 Dividend Aristocrats ETF, which closely mirrors the S&P 500 Dividend Aristocrats Index. Not only do all of the companies in the index have to be in the S&P 500, but they need to have boosted dividends annually over the past 25 years and also meet the fund’s specific criteria for market capitalization and liquidity.
The fund is up 6.7% over the past month versus 5.1% for its category, and it holds shares in 67 stocks in the S&P 500, including U.S. industry mainstays like Cardinal Health Inc. (CAH) and Brown & Brown Inc. (BRO).
Expense ratio: 0.35%
Consumer Discretionary Select Sector SPDR Fund (XLY)
With the U.S. economy turning tepidly in an upward direction, the Consumer Discretionary Select Sector SPDR Fund seems like a good play for the second half of 2023. The underlying data suggests burgeoning strength in consumer sentiment, lower inflation and rising retail sales. All of the above should benefit XLY shareholders, with the fund already up 32.1% through June 30. Having broad exposure to the consumer discretionary sector seems like a good idea, and this fund, which includes familiar U.S. corporate brands like Amazon.com Inc. (AMZN), Tesla Inc. (TSLA), Home Depot Inc. (HD) and McDonald’s Corp. (MCD), should do the trick.
Expense ratio: 0.10%
iShares U.S. Aerospace & Defense ETF (ITA)
Fly America’s friendly skies with this rising ETF, which includes all-American aerospace and defense staples like Raytheon Technologies Corp. (RTX), Boeing Co. (BA) and Lockheed Martin Corp. (LMT). Congressional leaders haggled with the White House to cut a massive last-minute budget and spending deal (called the Fiscal Responsibility Act of 2023) in late May, and more than $136 billion in spending cuts were included in the bill signed by President Joe Biden on June 3. Defense spending was largely spared from the cuts, largely due to the ongoing military conflict between Russia and Ukraine.
In the aftermath of the spending legislation, which suspended the federal debt limit until 2025, ITA looks like a safe and profitable investment that’s insulated from significant government spending restrictions. The fund is only up 4.8% compared with a 15.4% gain for its category on a year-to-date basis, according to VettaFi’s ETF Database, but as an industrial-heavy fund (99% of the portfolio), ITA looks like a relatively bulletproof fund option going forward.
Expense ratio: 0.39%
Vanguard REIT ETF (VNQ)
The U.S. real estate market is holding its own in 2023, as high inflation, high mortgage rates and thinning residential home inventories throw a triple-whammy at home buyers and real estate investment trust, or REIT, investors. This fund tracks high-quality REITs and does particularly well in periods of lower interest rates, where the U.S. economy is eventually headed.
While inflation remains relatively high at the midpoint in 2023, analysts expect the Federal Reserve to either pause or reduce rates upon any significant sign of inflation stability. One sector sticking point is commercial real estate, which is reeling from a massive decline in rental and lease properties due to the rise of remote work.
But with a yield of 4.3% annually and a history of competitive returns against broader stock indexes and significantly lower volatility, this Vanguard ETF looks like a good landing spot as the economy recovers.
Expense ratio: 0.12%
Invesco Dynamic Building & Construction ETF (PKB)
This powerhouse U.S. building and construction fund is pouring it on in 2023, up 33.6% year to date compared with 32.9% for its category. The fund has more than 90% of its assets in building and construction companies and includes American sector mainstays like Lennar Corp. (LEN), Tractor Supply Co. (TSCO) and Toll Brothers Inc. (TOL).
The fund shouldn’t slow down anytime soon, with homebuilder sentiment up to a one-year high, as measured by the National Association of Home Builders (NAHB) Housing Market Index. Additionally, the construction industry seems to be in hiring mode again after a year of relative inactivity, with construction employment up to 25,000 new workers in May 2023.
Expense ratio: 0.6%
Alerian MLP ETF (AMLP)
This $6.2 billion fund offers a hefty 8.3% dividend yield, but it only returned 7.4% on a year-to-date basis as of June 30 — significantly lower than the S&P 500’s return so far this year. Despite the weaker 2023 performance, there’s much to like about AMLP. The fund showed resilience with a 25.5% overall return in 2022, a downward-spiraling year for the infrastructure sector.
It also holds some of the leading lights in the master limited partnership (MLP) field, including Magellan Midstream Partners LP (MMP), Plains All American Pipeline LP (PAA) and Enterprise Products Partners LP (EPD), which accounted for about 38% of the portfolio as of the end of June.
Expense ratio: 0.87%
VanEck BDC Income ETF (BIZD)
This fund is smaller in stature compared with the powerhouse American ETFs listed above, but it can still pack a punch for investors. The fund favors business development companies, or BDCs, that largely finance small and midsize U.S. companies that are either private businesses or thinly traded public companies that may otherwise have no path to funding.
The fund boasts an 11.4% yield and has returned 11.9% year to date as of June 30, though its net expense ratio of 10.92% due to external BDC management fees may be a deterrent. The yield bonus with BIZD is a big one, though: Just like REITs, BDCs must pay at least 90% of taxable income to their investors in the form of dividends, which adds another wealth-building component to an intriguing niche fund category.
Expense ratio: 10.92%
iShares 20+ Year Treasury Bond ETF (TLT)
Bond investors can choose from myriad fixed-income fund options in the U.S. Treasury bond category. Wall Street analysts refer to Treasury-based ETFs as a “defensive-minded” portfolio strategy, and there’s nothing wrong with that, especially if you’re nearing or in retirement and are in capital preservation mode. TLT fits the bill here, with a portfolio stacked with bonds that mature in 20 years or more.
While that longevity does come with higher investment rate risk, it also comes with higher payouts, and that’s something any investor can get behind. The fund yields 2.9%.
Expense ratio: 0.15%
SPDR Nuveen Bloomberg Municipal Bond ETF (TFI)
Another reliable way to preserve hard-earned cash — and get paid decently to do so — is via municipal bonds that borrow investor money on behalf of public entities like states and local municipalities. Like any municipal bond fund, the Nuveen Bloomberg Municipal Bond ETF comes with a nice feature that any American can appreciate, as the interest earned on muni bond investments is tax-free at the federal level and largely so at the state level. TFI, with a yield of 2.1%, is up more than 2% on a year-to-date basis as of June 30.
Expense ratio: 0.23%
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10 All-American ETFs to Buy Now originally appeared on usnews.com
Update 07/03/23: This story was published at an earlier date and has been updated with new information.
