Wise investments are based on sound financial decisions. A lot of time and effort is spent looking for just the right investments to build out a portfolio, including a mix of stocks, bonds, ETFs, mutual funds and more. But that doesn’t guarantee that an investor is aware of all of their potential choices at their disposal or make objective decisions. There are underlying psychological factors that play into all of this.

That’s why using an online stock screener can be an effective way for investors to make better, more informed choices when building their ETF portfolio. 

This technology allows investors to save time looking for investments that match their criteria, decrease the chances of behavioral biases playing a part in the selection of funds, and help to uncover great investment opportunities that you may not have known anything about. And they’re not just for stocks anymore. Here is a look at how to use an online stock screener to build an ETF portfolio.

What is an online stock screener?

Stock screeners are online tools that investors and traders can use to find, analyze, and filter through stocks with the use of custom parameters. Parameters can be changed when the needs of the user change, allowing them to search and discover funds that meet their evolving needs over time, as market factors and industries change.

The more filters that are applied, the narrower the results. 

Online stock screeners allow investors to evaluate hundreds of stock options in a very short period of time. You will be able to see at least a 10-year history on how the stock has performed in the past, to better predict how it might perform in the future. This allows investors to quickly sort out the stocks that do not meet the necessary requirements and focus on the ones that do.

Contrary to popular belief, stock screeners are not just useful for those looking to buy, sell, and trade stocks. They are a great tool for building an ETF portfolio as well.


What is an ETF?

Simply put, an ETF is an Exchange Traded Fund which is a fund that can be traded on an exchange like a stock. Building an ETF portfolio is a great way to invest in a diverse set of assets without having to spend exorbitant amounts of money and time doing so. It’s kind of like getting your cake and eating it too.

As compared to stocks, ETFs certainly have attractive qualities that make it the right investment opportunity for those who are looking for a more low-risk investment option:

  • Allows for diversification across not only verticals but horizontals as well
  • ETFs offer transparency in that the price activities are public
  • Investors are only taxed an ETF is sold

Even though there are similarities between ETFs and stocks, such as the ability to be traded on an exchange or being assigned a unique ticker, there are distinct differences. These include:

  • ETFs are a collection of assets. A stock only represents one asset or one company.
  • ETFs tend to have lower fees associated with buying, selling, and trading.
  • ETFs tend to be a less-risky investment because all of your eggs aren’t in one basket. Even if one asset takes a downward turn, it is not likely that they all will.

The principle behind how ETFs work is quite simple and can be broken down into 4 easy steps. First, an ETF provider analyzes all of the assets available in their market segment. These include, but aren’t limited to stocks, bonds, currencies, and commodities. A virtual “”collection”” is created by the provider and consists of the different assets the manager has chosen, and given a unique ticker (similar to a stock). Each ETF will even have a ticker symbol so that it is easily recognizable. Once launched, investors will have the opportunity to buy shares of that collection, which can be thought of like buying shares of a business. When you buy shares, you aren’t just buying one type of asset in the collection. You are buying a piece of every asset. Investors can then buy, sell, and trade those shares throughout the day on an exchange, just as they would a stock.

And there are a lot of them.

As of 2019, there were more than 5,000 ETFs trading globally, with roughly 1,750 of those based in the U.S. Since their introduction in 1993, ETFs as a class now boast more than $1 trillion in assets under management and the market sees hundreds of new funds launched every year.

Deciding which of all these ETFs are best for you and your portfolio is made easier with the use of a stock screener. 


Using Magnifi to build your ETF portfolio

Online stock screeners are designed to make the investment decision process simple, so using them to build a portfolio of ETF and other fund investments is as straightforward as it sounds. And that’s exactly how the process works on Magnifi. Simply follow these steps:


Choose an investment type

Investors start by choosing what type of investment they are interested in. You can either choose based on the type of company you are looking for such as “”Retail”” or special categories such as “”High Return Retail Funds.”” Let’s use retail, for example. Once inputted, an entire list of funds related to retail will pop up on the screen. This is an all-inclusive list because the only filter as of yet is retail. More than likely all of the results will not meet your investment criteria and will not only include ETFs but also stocks, mutual funds, etc. 


Filter the results

Next, you will want to filter the results to include only those you are interested in. Since you’re only interested in ETFs, exclude every other type of fund including stocks and mutual funds from the search. The list before you will now only show ETFs.


Filter even further

But that’s just the beginning. Let’s say you want to only see ETFs from the sponsor Vanguard. Include that parameter as a filter. For the simplicity of this example, we only set one, but you can set as many as you like including asset class, philosophy, vehicle, volatility, and more. 


Sort your results

Once you’ve settled on your filters, you can now sort the funds based on how you would like to view them. 

You now only have results in front of you that have a high probability of fitting your needs. Choose the investment(s) that makes the most sense for your investing strategy.


Building an ETF portfolio with confidence 

Magnifi allows investors to search for ETFs and mutual funds based on the themes you are most interested in such as “”organic foods”” or “”climate change.‚Äù With our innovative technology, you can easily sort through thousands of options to find the best investments for your portfolio. 

Run a free search on Magnifi today and find the right ETFs to add to your portfolio. 

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]