With an astonishing $2 trillion in assets managed, BlackRock is the single largest ETF issuer in the marketplace. Through its iShares suite of more than 300 different ETFs, it probably offers a fund option no matter what style, region or sector an investor wishes to target.
Like Vanguard, BlackRock is a low cost leader. Of the 383 different ETFs the company operates, not a single one has an expense ratio of more than 1%. In fact, 58 of those ETFs charge just 0.10% or less, with some charging as little as 0.03% annually.
That makes the iShares ETFs a terrific fund family with which to be a diversified and well-rounded portfolio. Too much variety of choice, however, can result in paralysis by analysis. For many investors, targeting just a handful of the cheapest ETF options available will more than do the job.
Here are 15 iShares that are among the cheapest available and would be ideal to use as core portfolio holdings that you could buy and hold forever.
iShares Core S&P 500 ETF (IVV)
Many investors want to use an S&P 500 fund as the basis of their portfolio and then build around it. IVV simply tracks the popular index and charges just 0.03% annually, meaning you're paying next to nothing to hold a well-diversified portfolio.
iShares Core S&P Total U.S. Stock Market ETF (ITOT)
Total market ETFs are ideal cornerstone holdings because they hold companies of all sizes, instead of just sticking with the largest and most well-known names. This fund might be a better option than IVV because it covers virtually the entire U.S. equity market over just the large-cap universe.
iShares Core U.S. Aggregate Bond ETF (AGG)
AGG is great if you simply want broad coverage of the U.S. bond market, but it's not necessarily perfect. Because of the bull market in bonds that has lasted for well over two decades, government bonds account for nearly 2/3 of the portfolio. Adding some corporate bond exposure to AGG might be advisable (I'll offer a couple of choices in just a moment).
iShares Core Dividend Growth ETF (DGRO)
One of my absolute favorite dividend ETFs, DGRO targets companies with 5+ consecutive years of dividend growth and a minimum payout ratio threshold to ensure that dividend payments are sustainable. The result is an ultra-cheap portfolio that yields nearly 2.5% and is one of the top-rated funds in its peer group.
iShares Core MSCI EAFE ETF (IEFA)
IEFA is one of the cheapest ETFs you'll find for broad foreign developed markets exposure. This fund shouldn't be confused with BlackRock's other similar fund, the iShares MSCI EAFE ETF (EFA). EFA came first with a 0.32% before IEFA came later with an expense ratio of 0.07%. They're essentially the same fund, so choose IEFA over EFA.
iShares Core S&P Small-Cap ETF (IJR)
IJR is one of several small-cap focused ETFs and this one simply tracks the S&P 600 Small Cap Index. Many investors prefer to target the Russell 2000 for small-cap coverage instead of the S&P 600 (there's an iShares offering for that which I'll get to in a moment), but the 0.06% expense ratio of this ETF is very competitive.
iShares MBS Bond ETF (MBB)
MBB focuses on the government mortgage-backed bond market. From a risk standpoint, this fund is roughly on par with what you'd expect from an intermediate-term government bond ETF. It does currently yield about 0.5% more, however, which makes it attractive from a risk/return perspective within the government securities market.
iShares Edge MSCI Minimum Volatility USA ETF (USMV)
Low and minimum volatility strategies (and, yes, there is a difference) were popular especially during the COVID bear market, but make a lot of sense as a risk-reducing portfolio addition. Despite its more defensive posturing, it doesn't really provide a yield boost as its 1.5% yield only matches that of the S&P 500.
iShares National Muni Bond ETF (MUB)
MUB provides access to an investment-grade portfolio of more than 2,000 muni bonds of all maturities. The federally tax-free nature of munis are the big attraction, but the fact that the fund avoids bonds subject to the alternative minimum tax is another advantage.
iShares TIPS Bond ETF (TIP)
With inflation risk about to become a greater consideration over the next couple of years, the ability to add inflation protection to your portfolio will become a greater theme. While not typically big yield providers, the principal balance adjusts with changes to inflation rates making it an ideal core holding even in smaller percentages.
iShares Russell 2000 ETF (IWM)
This is iShares other primary small-cap ETF. IWM isn't quite as cheap as some of the other funds on the list, its expense ratio is 0.19%, but it's still by far the largest Russell 2000 linked ETF, even beating out Vanguard's fund which comes at half the price.
iShares Core MSCI Emerging Markets ETF (IEMG)
IEMG could be considered the sister fund to IEFA and they even have the same backstory. It's the lower cost version of the iShares MSCI Emerging Markets ETF (EEM) and has grown to become the 4th largest ETF in the iShares lineup.
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)
Whereas AGG focuses on the entire fixed income market, LQD targets just the investment grade corporate bond segment. AGG, which dedicates nearly 2/3 of its assets to government bonds, feels underweight to corporate bonds considering their place in the U.S. investment landscape. LQD would be a nice complement to AGG or any other government bond ETF.
iShares Core Total USD Bond Market ETF (IUSB)
IUSB is probably a better option for bond exposure than either AGG or LQD. It has a comparatively lower allocation to government securities overall and even adds a modest 7% weight to junk bonds. With an expense ratio of just 0.06%, I prefer IUSB from both a cost and diversity standpoint.
iShares Core High Dividend ETF (HDV)
Another dividend ETF, HDV targets stocks with above average yields, but also screens for financial health to make sure dividends are sustainable. It uses the Morningstar Distance To Default and Economic Moat ratings in order to identify higher quality companies within the high yield universe.