ETFs Are Wildly Popular. How Much of Your Portfolio Should Be in Them?

Exchange-traded funds have become wildly popular among investors, particularly young people who use do-it-yourself investing platforms that can auto-invest client money in ETFs. But the question remains: is there a downside to holding nothing but ETFs in your portfolio? Not really, according to some Bay Streeters, as long as you strike the right asset composition. “It’s fine having a portfolio that’s 100 percent in ETFs,” said Ted Rechtshaffen, CEO and wealth adviser at TriDelta Financial. “It’s more about what the overall asset mix and risk is in the portfolio.” Rechtshaffen likens ETFs to a refrigerator—it’s about the contents. He said looking inside someone’s fridge tells you more about the person’s diet than glancing at the fridge door. Similarly, the specific securities in the funds tell you more about the risks in the portfolio....