Asset allocation ETFs allow you to allocate your assets over various asset classes, hence the name. Lot of investors spend great amount of time trying to figure out which individual stocks are best to buy, but spend relatively little time deciding on which types of stocks or bonds they should buy. This is where the asset allocation ETFs come in. They allow you to invest in different asses classes, diversifying the risks, which would otherwise come with individual stocks. Often when a specific stock performs well, stocks in the same asset class follow anyway, making it less time consuming and risky than individual stock picking. Asset allocation ETFs able you to invest in asset classes including large, mid and small cap stocks, growth stocks, value stocks ever sector and international stocks. If that is not sufficient you can also diversify with emerging market stocks, short-term bonds, long-term bonds and mid term bonds and also real estate investment trusts.
