Exchange-traded funds (ETFs) allow investors to buy a collection of stocks or other assets in just one fund with (usually) low expenses, and they trade on an exchange like stocks. ETFs have become tremendously popular in the last decade and now hold trillions of dollars in assets. With literally thousands of ETFs to choose from, where does an investor start? Below are some of the top ETFs by category, including some highly specialized funds.
What is an ETF and how does it work?
An exchange-traded fund may hold positions in many different assets, including stocks, bonds and sometimes commodities.ETFs most often track a specific index such as the Standard & Poor’s 500 or the Nasdaq 100, meaning they hold positions in the index companies at their same relative weights in the index.So by buying one share in the ETF, an investor effectively purchases a (tiny) share in all the assets held in the fund.
ETFs are often themed around a specific collection of stocks. An S&P 500 index fund is one of the most popular themes, but themes also include value or growth stocks, dividend-paying stocks, country-based investments, disruptive technologies, specific industries like information technology or healthcare, various bond maturities (short, medium and long) and many others.
For running an ETF, the fund company charges a fee called an expense ratio. The expense ratio is the annual percentage of your total investment in the fund. For example, an ETF might charge a fee of 0.12 percent. That means on an annual basis an investor would pay $12 for every $10,000 invested in the fund. Low-cost ETFs are very popular with investors.
Best ETFs of February 2023 by type:
- Equity ETFs
- Bond ETFs
- Balanced ETFs
- Commodity ETFs
- Currency ETFs
- Real estate ETFs
- Volatility ETFs
- Leveraged ETFs
- Inverse ETFs
Top equity ETFs
Equity ETFs provide exposure to a portfolio of publicly traded stocks, and may be divided into several categories by where the stock is listed, the size of the company, whether it pays a dividend or what sector it’s in. So investors can find the kind of stock funds they want exposure to and buy only stocks that meet certain criteria.
Stock ETFs tend to be more volatile than other kinds of investments such as CDs or bonds, but they’re suitable for long-term investors looking to build wealth. Some of the most popular equity ETF sectors and their historical performance (as of Jan. 31, 2023) include:
Top U.S. market-cap index ETFs
This kind of ETF gives investors broad exposure to publicly traded companies listed on American exchanges using a passive investment approach that tracks a major index such as the S&P 500 or Nasdaq 100.
Vanguard S&P 500 ETF (VOO)
- 2022 performance: -18.2 percent
- Historical performance (annual over 5 years): 9.2 percent
- Expense ratio: 0.03 percent
Alternatives: Some of the most widely held ETFs in this group also include SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV) and Invesco QQQ Trust (QQQ).
Top international ETFs
This kind of ETF can provide targeted exposure to international publicly traded companies broadly or by more specific geographic areas, such as Asia, Europe or emerging markets. Investing in foreign companies introduces concerns such as currency risk and governance risks, since foreign countries may not offer the same protections for investors as the U.S. does.
Vanguard FTSE Developed Markets ETF (VEA)
- 2022 performance: -15.4 percent
- Historical performance (annual over 5 years): 2.3 percent
- Expense ratio: 0.05 percent
Alternatives: Some of the most widely held ETFs also include iShares Core MSCI EAFE ETF (IEFA), Vanguard FTSE Emerging Markets ETF (VWO) and Vanguard Total International Stock ETF (VXUS).
Top sector ETFs
This kind of ETF gives investors a way to buy stock in specific industries, such as consumer staples, energy, financials, healthcare, technology and more. These ETFs are typically passive, meaning they track a specific preset index of stocks and simply mechanically follow the index.
Vanguard Information Technology ETF (VGT)
- 2022 performance: -29.7 percent
- Historical performance (annual over 5 years): 15.6 percent
- Expense ratio: 0.10 percent
Alternatives: Some of the most widely held ETFs also include Financial Select Sector SPDR Fund (XLF), Energy Select Sector SPDR Fund (XLE) and Industrial Select Sector SPDR Fund (XLI).
Dividend ETFs
This kind of ETF gives investors a way to buy only stocks that pay a dividend. A dividend ETF is usually passively managed, meaning it mechanically tracks an index of dividend-paying firms. This kind of ETF is usually more stable than a total market ETF, and it may be attractive to those looking for investments that produce income, such as retirees.
The best dividend ETFs tend to offer higher returns and low cost.
Vanguard Dividend Appreciation ETF (VIG)
- 2022 performance: -9.8 percent
- Historical performance (annual over 5 years): 9.6 percent
- Expense ratio: 0.06 percent
Alternatives: Some of the most widely held ETFs here also include) Vanguard High Dividend Yield Index ETF (VYM) and Schwab U.S. Dividend Equity ETF (SCHD).
Top bond ETFs
A bond ETF provides exposure to a portfolio of bonds, which are often divided into sub-sectors depending on bond type, their issuer, maturity and other factors, allowing investors to buy exactly the kind of bonds they want. Bonds pay out interest on a schedule, and the ETF passes this income on to holders.
Bond ETFs can be an attractive holding for those needing the safety of regular income, such as retirees. Some of the most popular bond ETF sectors and their returns include:
Long-term bond ETFs
This kind of bond ETF gives exposure to bonds with a long maturity, perhaps as long as 30 years out. Long-term bond ETFs are most exposed to changes in interest rates, so if rates move higher or lower, these ETFs will move inversely to the direction of rates. While these ETFs may pay a higher yield than shorter-term bond ETFs, many don’t see the reward as worthy of the risk.
iShares MBS ETF (MBB)
- 2022 performance: -11.7 percent
- Historical performance (annual over 5 years): 0.2 percent
- Expense ratio: 0.04 percent
Alternatives: Some of the most widely held ETFs also include iShares 20+ Year Treasury Bond ETF (TLT) and Vanguard Mortgage-Backed Securities ETF (VMBS).
Short-term bond ETFs
This kind of bond ETF gives exposure to bonds with a short maturity, typically no more than a few years. These bond ETFs won’t move much in response to changes to interest rates, meaning they’re relatively low risk. These ETFs can be a more attractive option than owning the bonds directly because the fund is highly liquid and more diversified than any individual bond.
Vanguard Short-Term Bond ETF (BSV)
- 2022 performance: -5.5 percent
- Historical performance (annual over 5 years): 1.1 percent
- Expense ratio: 0.04 percent
Alternatives: Some of the most widely held ETFs in this category also include iShares 1-3 Year Treasury Bond ETF (SHY) and Vanguard Short-Term Treasury ETF (VGSH).
Total bond market ETFs
This kind of bond ETF gives investors exposure to a wide selection of bonds, diversified by type, issuer, maturity and region. A total bond market ETF provides a way to gain broad bond exposure without going too heavy in one direction, making it a way to diversify a stock-heavy portfolio.
Vanguard Total Bond Market ETF (BND)
- 2022 performance: -13.1 percent
- Historical performance (annual over 5 years): 0.8 percent
- Expense ratio: 0.03 percent
Alternatives: Some of the most widely held ETFs also include iShares Core U.S. Aggregate Bond ETF (AGG) and Vanguard Total International Bond ETF (BNDX).
Municipal bond ETFs
This kind of bond ETF gives exposure to bonds issued by states and cities, and interest on these bonds is typically tax-free, though it’s lower than that paid by other issuers. Muni bonds have traditionally been one of the safest areas of the bond market, though if you own out-of-state munis in a fund, you will lose the tax benefits in your home state, though not at the federal level. Given the tax advantages, it is advantageous to consider a municipal bond ETF that invests in your state of residence.
iShares National Muni Bond ETF (MUB)
- 2022 performance: -7.4 percent
- Historical performance (annual over 5 years): 1.9 percent
- Expense ratio: 0.07 percent
Alternatives: Some of the most widely held ETFs also include Vanguard Tax-Exempt Bond ETF (VTEB) and iShares Short-Term National Muni Bond ETF (SUB).
Top balanced ETFs
A balanced ETF owns both stock and bonds, and it targets a certain exposure to stock, which is often reflected in its name. These funds allow investors to have the long-term returns of stocks while reducing some of the risk with bonds, which tend to be more stable. A balanced ETF may be more suitable for long-term investors who may be a bit more conservative but need growth in their portfolio.
iShares Core Aggressive Allocation ETF (AOA)
- 2022 performance: -16.2 percent
- Historical performance (annual over 5 years): 4.6 percent
- Expense ratio: 0.15 percent
Alternatives: Some of the most widely held balanced ETFs also include iShares Core Growth Allocation ETF (AOR) and iShares Core Moderate Allocation ETF (AOM).
Top commodity ETFs
A commodity ETF gives investors a way to own specific commodities, including agricultural goods, oil, precious metals and others without having to transact in the futures markets. The ETF may own the commodity directly or via futures contracts. Commodities tend to be quite volatile, so they may not be well-suited for all investors. However, these ETFs may allow more advanced investors to diversify their holdings, hedge out exposure to a given commodity in their other investments or make a directional bet on the price of a given commodity. The best-performing gold ETFs tend to offer highly effective portfolio diversification with added defensive stores of value.
SPDR Gold Shares (GLD)
- 2022 performance: -0.8 percent
- Historical performance (annual over 5 years): 7.1 percent
- Expense ratio: 0.40 percent
Alternatives: Some of the most widely held commodities ETFs also include iShares Silver Trust (SLV), United States Oil Fund LP (USO) and Invesco DB Agriculture Fund (DBA).
Top currency ETFs
A currency ETF gives investors exposure to a specific currency by simply buying an ETF rather than accessing the foreign exchange (forex) markets. Investors can gain access to some of the world’s most widely traded currencies, including the U.S. Dollar, the Euro, the British Pound, the Swiss Franc, the Japanese Yen and more. These ETFs are more suitable for advanced investors who may be seeking a way to hedge out exposure to a specific currency in their other investments or to simply make a directional bet on the value of a currency.
Invesco DB US Dollar Index Bullish Fund (UUP)
- 2022 performance: 9.5 percent
- Historical performance (annual over 5 years): 4.3 percent
- Expense ratio: 0.77 percent
Alternatives: Some of the most widely held currency ETFs also include Invesco CurrencyShares Euro Trust (FXE) and Invesco CurrencyShares Swiss Franc Trust (FXF).
Top real estate ETFs (REIT ETFs)
Real estate ETFs usually focus on holding stocks classified as REITs, or real estate investment trusts. REITs are a convenient way to own an interest in companies that own and manage real estate, and REITs operate in many sectors of the market, including residential, commercial, industrial, lodging, cell towers, medical buildings and more. REITs typically pay out substantial dividends, which are then passed on to the holders of the ETF. These payouts make REITs and REIT ETFs particularly popular among those who need income, especially retirees. The best ETF REITs maximize dividend yields, as dividends are the main reason for investing in them.
Vanguard Real Estate ETF (VNQ)
- 2022 performance: -26.2 percent
- Historical performance (annual over 5 years): 6.6 percent
- Expense ratio: 0.12 percent
Alternatives: Some of the most widely held real estate ETFs also include iShares U.S. Real Estate ETF (IYR) and Schwab U.S. REIT ETF (SCHH).
Top volatility ETFs
ETFs even allow investors to bet on the volatility of the stock market through what are called volatility ETFs. Volatility is measured by the CBOE Volatility Index, commonly known as the VIX. Volatility usually rises when the market is falling and investors become uneasy, so a volatility ETF can be a way to hedge your investment in the market, helping to protect it. Because of how they’re structured, they’re best-suited for traders looking for short-term moves in the market, not long-term investors looking to profit from a rise in volatility.
iPath Series B S&P 500 VIX Short-Term Futures (VXX)
- 2022 performance: -23.8 percent
- Historical performance (annual over 3 years): -37.6 percent
- Expense ratio: 0.89 percent
Alternatives: Some of the most widely held volatility ETFs also include the ProShares VIX Mid-Term Futures ETF (VIXM) and the ProShares Short VIX Short-Term Futures ETF (SVXY).
Top leveraged ETFs
A leveraged ETF goes up in value more rapidly than the index it’s tracking, and a leveraged ETF may target a gain that’s two or even three times higher than the daily return on its index. For example, a triple-leveraged ETF based on the S&P 500 should rise 3 percent on a day the index rises 1 percent. A double leveraged ETF would target a double return. Because of how leveraged ETFs are structured, they’re best-suited for traders looking for short-term returns on the target index over a few days, rather than long-term investors.
ProShares UltraPro QQQ (TQQQ)
- 2022 performance: -79.1 percent
- Historical performance (annual over 5 years): 8.7 percent
- Expense ratio: 0.86 percent
Alternatives: Some of the most widely held leveraged ETFs also include ProShares Ultra QQQ (QLD), Direxion Daily Semiconductor Bull 3x Shares (SOXL) and ProShares Ultra S&P 500 (SSO).
Top inverse ETFs
Inverse ETFs go up in value when the market declines, and they allow investors to buy one fund that inversely tracks a specific index such as the S&P 500 or Nasdaq 100. These ETFs may target the exact inverse performance of the index, or they may try to offer two or three times the performance, like a leveraged ETF. For example, if the S&P 500 fell 2 percent in a day, a triple inverse should rise about 6 percent that day. Because of how they’re structured, inverse ETFs are best-suited for traders looking to capitalize on short-term declines in an index.
ProShares Short S&P 500 ETF (SH)
- 2022 performance: 18.1 percent
- Historical performance (annual over 5 years): -11.2 percent
- Expense ratio: 0.89 percent
Alternatives: Some of the most widely held inverse ETFs also include ProShares UltraPro Short QQQ (SQQQ) and ProShares UltraShort S&P 500 (SDS).
How to invest in ETFs
It’s relatively easy to invest in ETFs, and this fact makes them popular with investors. You can buy and sell them on an exchange like a regular stock. Here’s how to invest in an ETF:
1. Find which ETF you want to buy
You have a choice of more than 3,000 ETFs trading in the U.S., so you’ll have to sift through the funds to determine which one you want to buy.
One good option is to buy an index fund based on the S&P 500, since it includes the top publicly traded stocks listed in the U.S. (Plus, it’s the recommendation of super investor Warren Buffett.) But other broad-based index funds can also be a good choice, reducing (but not eliminating) your investment risk. Many companies offer similar index funds, so compare the expense ratio on each to see which one offers the best deal.
Once you’ve found a fund to invest in, note its ticker symbol, a three- or four-letter code.
2. Figure out how much you can invest
Now determine how much you’re able to invest in the ETF. You may have a specific amount available to you now that you want to put into the market. But what you can invest may also depend on the price of the ETF.
An ETF may trade at a price of $10 or $15 or maybe even a few hundred dollars per share. Generally, you’ll need to buy at least one whole share when placing an order. However, if you use a broker that allows fractional shares, you can put any amount of money to work, regardless of the ETF price. In many cases these brokers do not charge a trading commission either.
Fortunes are built over years, so it’s important to continue to add money to the market over time. So you should also determine how much you can add to the market regularly over time.
3. Place the order with your broker
Now it’s time to place the order with your broker. If you have money in the account already, you can place the trade using the ETF’s ticker symbol. If not, deposit money into the account and then place the trade when the money clears.
If you don’t have a brokerage account, it usually takes just a few minutes to set one up. A handful of brokers such as Robinhood and Webull allow you to instantly fund your account. So in some cases you could be started and fully trading in minutes.
Protect yourself from inflation with ETFs
Inflation is the persistent increase in prices over time, and it gradually reduces your purchasing power. As the economy reopened following the COVID-19 shutdown, business and consumers have rushed to spend, pushing prices on many goods and services higher. To protect yourself from inflation, you need investments that rise faster than it does. And one way to do that is to actually own the businesses – or stock in them – that benefit from inflation.
Often the beneficiary is a high-quality business that can push on those rising prices to consumers. By owning a stake in the business – through stock or a collection of stocks in an ETF – you can benefit when your companies raise their prices. So owning stock can be a way to protect yourself from inflation.
Investors have a good choice of ETFs when it comes to hedging against inflation. Two of the most popular ETFs include index funds based on the Standard & Poor’s 500 index and the Nasdaq 100 index, which contain high-quality businesses listed on American exchanges:
- Vanguard S&P 500 ETF (VOO), with an expense ratio of 0.03 percent
- Invesco QQQ Trust (QQQ), with an expense ratio of 0.20 percent
Both are low-cost funds that give you stakes in some of the world’s best companies, helping protect you from inflation.
What to know about crypto and ETFs in 2023
Currently, there are no ETFs that allow you to invest directly in Bitcoin or other cryptocurrencies. Several companies, including Fidelity, have applied with the Securities and Exchange Commission (SEC) to offer Bitcoin ETFs, but the agency has been slow to approve them. In a recent statement, the SEC questioned whether the Bitcoin futures market could support the entry of ETFs, which aren’t able to limit additional investor assets if a fund were to become too large or dominant.
However, there are ETFs that invest in companies using the technology behind Bitcoin, known as blockchain. These ETFs hold shares in companies such as Microsoft, PayPal, Mastercard and Square. All of these companies use blockchain technology in different parts of their businesses. One thing these ETFs don’t give you is direct exposure to Bitcoin itself, but as blockchain technology continues to grow, the companies in these ETFs could benefit.
It’s unclear when or if ETFs that invest in Bitcoin or other cryptocurrencies directly will be available for purchase. It’s important to remember that cryptocurrencies are highly speculative investments and don’t produce anything for their owners. ETFs that focus on blockchain may ultimately be a safer way to profit from its future innovation.
Exchange-traded fund (ETF) FAQ
Are ETFs a good type of investment?
ETFs are a good kind of investment because of the benefits they deliver to investors, and ETFs can generate significant returns for investors, if they select the right funds.
ETFs provide several benefits to investors, including the ability to buy multiple assets in one fund, the risk-reducing benefits of diversification and the generally low costs to manage the fund. The cheapest funds are generally passively managed and may cost just a few dollars annually for every $10,000 invested. Plus, passively managed ETFs often perform much better than actively managed ones.
How an individual ETF performs depends completely on the stocks, bonds and other assets that it owns. If these assets rise in value, then the ETF will rise in value, too. If the assets fall, so will the ETF. The performance of the ETF is just the weighted average of the return of its holdings.
So not all ETFs are the same, and that’s why it’s important to know what your ETF owns.
What’s the difference between ETFs and stocks?
An ETF may hold stakes in many different kinds of assets, including stocks and bonds. In contrast, a stock is an ownership interest in a specific company. While some ETFs consist entirely of stocks, an ETF and stock behave differently:
- Stocks usually fluctuate more than ETFs. An individual stock usually moves around a lot more than an ETF does. That means you might make or lose more money on an individual stock than you would on an ETF.
- ETFs are more diversified. By buying a stock ETF you’re taking advantage of the power of diversification, putting your eggs in many different stocks rather than just one stock or a few individual stocks. This helps reduce your risk over time.
- Returns on a stock ETF depend on many companies, not just one. The performance of an ETF depends on the weighted average performance of its investments, whereas with an individual stock the return depends entirely on the performance of that one company.
Those differences are some of the most important between ETFs and stocks.
What’s the difference between ETFs and mutual funds?
ETFs and mutual funds both have similar structures and benefits. They both can offer a pool of investments such as stocks and bonds, reduced risk due to diversification (compared to single stock holdings or a portfolio of a few stocks), low management fees and the potential for attractive returns.
But these two types of funds differ in some key ways:
- ETFs are usually passive investments. Most ETFs usually just follow a predetermined index, investing mechanically based on whatever is in the index. In contrast, mutual funds are often actively managed, meaning a fund manager is investing the money, ideally to try to beat the market. Research shows that over the long term passive management usually wins.
- ETFs are often cheaper than mutual funds. Passive investing is cheaper to set up than active management, where the fund company must pay a team of experts to analyze the market. As a result, ETFs are cheaper than mutual funds as a whole, though passively managed index mutual funds can be cheaper than ETFs.
- Commissions may be higher with mutual funds. Today, virtually all major online brokers do not charge a commission to buy ETFs. In contrast, many mutual funds do have a sales commission, depending on the brokerage, though many are also offered for no trading commission, too.
- ETFs do not have sales loads. Sometimes mutual funds may have a sales load, which is a further commission to the salesperson. These funds can be 1 or even 2 percent of your total investment, hurting your returns. ETFs do not have these fees.
- You can trade ETFs any time the market is open. ETFs trade like stocks on an exchange, and you can place an order during the trading day and know exactly the price you’re paying. In contrast, a mutual fund is priced after the market closes and only then are shares traded.
- Mutual funds may be forced to make a taxable distribution. At the end of the year mutual funds may have to make a capital gains distribution, which is taxable to its shareholders, even if they haven’t sold the fund. That’s not the case with ETFs.
Those are some of the biggest differences between ETFs and mutual funds, though both do achieve the same goal of providing investors a diversified investment fund. While it may seem that ETFs are clearly better, sometimes mutual funds are the better choice for low costs.
Are ETFs safe for beginners?
ETFs are a good choice for beginners who do not have a lot of experience investing in the markets. But if the ETF is investing in market-based assets such as stocks and bonds, it can lose money. These investments are not insured against loss by the government.
But ETFs can offer a lot to beginners and even more experienced investors who do not want to analyze investments or invest in individual stocks. For example, rather than trying to pick winning stocks, you could simply buy an index fund and own a piece of many top companies.
By investing in many assets, sometimes hundreds, ETFs provide the benefits of diversification, reducing (but not eliminating) the risk for investors, compared to just owning a handful of assets.
So ETFs – depending on what they’re invested in – can be a safe choice for beginners.
When can you sell ETFs?
One of the big advantages of ETFs is their liquidity, meaning that they’re easily convertible to cash. Investors can buy and sell their funds on any day the market is open.
That said, there’s no guarantee that you can get what you paid for the investment.
Do ETFs have any disadvantages?
ETFs do have some disadvantages but they’re not usually too significant:
- The ETF is only as good as its holdings. If the ETF owns poorly performing assets, it’s going to perform poorly. The ETF structure can’t turn lead into gold.
- ETFs won’t be the highest performers. Due to their diversified nature, ETFs will never be among the highest-performing investments. For instance, an automobile industry ETF will never outperform the best-performing individual auto producer.
- ETFs may not be as focused as they seem. Some ETFs say they give you exposure to a certain country or industry (such as blockchain ETFs). In reality, many of the companies included in these ETFs derive substantial portions of their earnings from outside the target area. For example, an ETF that focuses on Europe may include BMW, though the German car company generates huge sales all over the world. So an ETF can be much less focused on a given investing niche than its name leads you to believe.
For these reasons, you’ll want to understand what assets a given ETF owns and whether that’s what you actually want to own when you buy the ETF.
Recap: Best ETFs of February 2023
- Vanguard S&P 500 ETF (VOO)
- Vanguard FTSE Developed Markets ETF (VEA)
- Vanguard Information Technology ETF (VGT)
- Vanguard Dividend Appreciation ETF (VIG)
- iShares MBS ETF (MBB)
- Vanguard Short-Term Bond ETF (BSV)
- Vanguard Total Bond Market ETF (BND)
- iShares National Muni Bond ETF (MUB)
- iShares Core Aggressive Allocation ETF (AOA)
- SPDR Gold Shares (GLD)
- Invesco DB US Dollar Index Bullish Fund (UUP)
- Vanguard Real Estate ETF (VNQ)
- iPath Series B S&P 500 VIX Short-Term Futures (VXX)
- ProShares UltraPro QQQ (TQQQ)
- ProShares Short S&P 500 ETF (SH)
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
FAQs
What is the best ETF for February 2023? ›
The best-performing ETFs for February 2023 are Invesco Solar ETF (TAN), First Trust NASDAQ Clean Edge Green Energy Index (QCLN) and SPDR S&P Semiconductor ETF (XSD).
What are the best performing ETFs over the last 5 years? ›| Symbol | Name | 5-Year Return |
|---|---|---|
| XSD | SPDR S&P Semiconductor ETF | 191.91% |
| QCLN | First Trust NASDAQ Clean Edge Green Energy Index Fund | 176.69% |
| SMH | VanEck Semiconductor ETF | 144.16% |
| SOXX | iShares Semiconductor ETF | 140.42% |
| ETF | Ticker | Net Assets |
|---|---|---|
| Vanguard 500 Index Fund | (NYSEMKT:VOO) | $744.8 billion |
| Invesco QQQ Trust | (NASDAQ:QQQ) | $145.9 billion |
| Vanguard Growth Fund | (NYSEMKT:VUG) | $132.3 billion |
| Avantis Small-Cap U.S. Value ETF | (NYSEMKT:AVUV) | $4.72 billion |
| Symbol | Name | YTD Return |
|---|---|---|
| BITS | Global X Blockchain & Bitcoin Strategy ETF | 46.74% |
| IBLC | iShares Blockchain and Tech ETF | 45.50% |
| USD | ProShares Ultra Semiconductors | 43.72% |
| FNGO | MicroSectors FANG+ Index 2X Leveraged ETNs | 42.39% |
- The Vanguard Long-Term Bond ETF gives investors a way to profit from a potential bond boom.
- The Vanguard Small-Cap Value ETF should take off if a new bull market begins later in 2023.
- The SPDR S&P Biotech ETF is poised for a big rebound.
- The Best Balanced ETFs of February 2023.
- iShares Core Aggressive Allocation ETF (AOA)
- Cambria Global Asset Allocation ETF (GAA)
- SPDR SSGA Multi-Asset Real Return ETF (RLY)
- iShares Core Moderate Allocation ETF (AOM)
- WisdomTree U.S. Efficient Core Fund (NTSX)
- iShares Core Growth Allocation ETF (AOR)
| Ticker | Fund | Inflows (%) |
|---|---|---|
| NVDS | AXS 1.25X NVDA Bear Daily ETF | 610% |
| BKHY | BNY Mellon High Yield Beta ETF | 552% |
| QTJA | Innovator Growth Accelerated Plus ETF - January | 540% |
| FSIG | First Trust Limited Duration Investment Grade Corporate ETF | 488% |
- 6 Best Growth ETFs to Consider in 2023. ...
- Vanguard Growth ETF. ...
- Vanguard Mega-Cap Growth ETF. ...
- iShares Russell Mid-Cap Growth ETF. ...
- Vanguard Small-Cap Growth ETF. ...
- iShares MSCI EAFE Growth ETF. ...
- ARK Innovation ETF.
Notably, the Schwab U.S. Dividend Equity ETF (SCHD) is the only value-styled ETF to beat ETFs tracking the S&P 500.
What is Vanguard's best performing ETF? ›- Vanguard S&P 500 ETF (ticker: VOO)
- Vanguard Total Stock Market ETF (VTI)
- Vanguard Growth ETF (VUG)
- Vanguard Value ETF (VTV)
- Vanguard High Dividend Yield ETF (VYM)
- Vanguard Dividend Appreciation ETF (VIG)
- Vanguard FTSE Developed Markets ETF (VEA)
What is the safest ETF? ›
- 9 Safest Index Funds and ETFs to buy in 2023. ...
- Vanguard S&P 500 ETF (NYSEMKT:VOO) ...
- Vanguard High Dividend Yield ETF (NYSEMKT:VYM) ...
- Vanguard Real Estate ETF (NYSEMKT:VNQ) ...
- iShares Core S&P Total U.S. Stock Market ETF (NYSEMKT:ITOT) ...
- Consumer Staples Select Sector SPDR Fund (NYSEMKT:XLP)
ETFs don't deliver get-rich-quick results. So it's important to start investing early and then use a buy-and-hold strategy, giving your money plenty of time to compound.
Where to invest 2023? ›- High-Yield Savings Accounts.
- Short-Term Certificates of Deposits.
- Short-Term Government Bonds Funds.
- S&P 500 Index Funds.
- Dividend Stock Funds.
- Real Estate & REITS.
- Cryptocurrency.
- The Vanguard Total Stock Market ETF (VTI) Issuer: Vanguard. Assets under management: $271.6 billion. ...
- The SPDR S&P 500 ETF (SPY) Issuer: State Street Global Advisors. Assets under management: $373.3 billion. ...
- The iShares Core MSCI EAFE ETF (IEFA) Issuer: iShares.
- WisdomTree US LargeCap Dividend ETF (DLN)
- iShares MSCI Global Min Vol Factor ETF (ACWV)
- Vanguard Intermediate-Term Treasury ETF (VGIT)
Amid this, investors might consider buying quality ETFs, Vanguard Short-Term Corporate Bond Index Fund (VCSH), JPMorgan Ultra-Short Income ETF (JPST), and SPDR S&P MIDCAP 400 ETF Trust (MDY) to ensure steady returns for 2023 and beyond.
What stocks will boom in 2023? ›- HAL-0.06 (-0.15%)
- CEGUNCH.
- ENPH-0.15 (-0.07%)
- MCKUNCH.
- NOC-0.94 (-0.20%)
- NFLXUNCH.
- SWKUNCH.
- VFC+0.04 (+0.16%)
Stock prices tend to fall in the middle of the month. So a trader might benefit from timing stock buys near a month's midpoint—the 10th to the 15th, for example. The best day to sell stocks would probably be within the five days around the turn of the month.
Will stock market do well in 2023? ›Unfortunately, analysts are anticipating negative overall earnings growth will continue in the first half of 2023. Analysts project S&P 500 earnings will drop 5.7% year-over-year in the first quarter and another 3.7% in the second quarter.
Should I wait to buy an ETF? ›If you wait to buy an ETF until you are sure it will pay off for you, you'll probably pay a higher price. You are better off to buy sooner—when you are “pretty sure,” rather than “certain.” By the time you're sure an ETF is a good buy, many other investors may have come to share that opinion.
Which ETFs are worth buying? ›
...
7 Best ETFs to Buy Now.
| ETF | YTD total performance as of March 2 market close (includes dividends) |
|---|---|
| ProShares Bitcoin Strategy ETF (ticker: BITO) | 41.3% |
| Vanguard Short-Term Corporate Bond ETF (VCSH) | 0.15% |
| ARK Innovation ETF (ARKK) | 25.4% |
| ARK Next Generation Internet ETF (ARKW) | 29.9% |
| Rank | Symbol | Fund Name |
|---|---|---|
| 1 | SPY | SPDR S&P 500 ETF Trust |
| 2 | IVV | iShares Core S&P 500 ETF |
| 3 | VTI | Vanguard Total Stock Market ETF |
| 4 | VOO | Vanguard S&P 500 ETF |
| Symbol | Name | Avg Daily Share Volume (3mo) |
|---|---|---|
| SPY | SPDR S&P 500 ETF Trust | 82,346,250 |
| QQQ | Invesco QQQ Trust | 52,032,723 |
| LABU | Direxion Daily S&P Biotech Bull 3x Shares | 50,764,480 |
| XLF | Financial Select Sector SPDR Fund | 40,535,102 |
ETFs are very safe and are an excellent option for long-term investments. According to experts, ETFs are not that volatile and show a slight change in their prices compared to stocks and indices because they are diversified and pooled investments of many investors.
What ETF pays the biggest dividend? ›| Dividend ETF Name (ticker) | Dividend Yield |
|---|---|
| JPMorgan Diversified Return International Equity ETF (JPIN) | 2.85% |
| Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) | 6.79% |
| iShares International Developed Property ETF (WPS) | 2.45% |
| SPDR S&P Global Dividend ETF (WDIV) | 4.86% |
- A financial advisor can help you create a financial plan for your passive investments. ...
- Dividend stocks. ...
- Real estate. ...
- Dividend ETFs and index funds. ...
- Bonds and bond funds. ...
- Peer to peer lending. ...
- High-yield savings accounts. ...
- Annuities.
Types of ETFs that can perform relatively well during periods of high inflation include TIPS ETFs, dividend ETFs, and commodity ETFs. However, investors should note that inflation ETFs are not guaranteed to gain in price when inflation is rising.
What is the best ETF against inflation? ›- The Best ETFs To Beat Inflation.
- Vanguard Short-Term Inflation Protected Securities ETF (VTIP)
- SPDR SSGA Multi-Asset Real Return ETF (RLY)
- ProShares Inflation Expectations ETF (RINF)
- Schwab U.S. REIT ETF (SCHH)
- Invesco DB Commodity Index Tracking ETF (DBC)
- Vanguard Total World Stock ETF (VT)
- Methodology.
However, 3x exchange-traded funds (ETFs) are especially risky because they utilize more leverage in an attempt to achieve higher returns. Leveraged ETFs may be useful for short-term trading purposes, but they have significant risks in the long run.
What is the best Vanguard ETF for 2023? ›- The Best Vanguard ETFs of March 2023.
- Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)
- Vanguard S&P 500 Index Fund ETF (VOO)
- Vanguard Emerging Markets Government Bond ETF (VWOB)
- Vanguard Value Index Fund ETF (VTV)
- Vanguard Total International Stock Index Fund ETF (VXUS)
Which Vanguard ETF has the highest return? ›
Vanguard S&P 500 Growth Index (VOOG)
As a result there are multiple growth-oriented Vanguard ETFs that garner the highest ratings from Refinitiv Lipper. But one that stands out is S&P 500 Growth, which has churned out an amazingly consistent 13% average annual returns over the last five and 10 years.
Fidelity and Vanguard both do a good job keeping costs fairly low, but Fidelity has a slight edge overall. Both brokers charge zero commission for stock and ETF trades, but Fidelity charges $0.65 per contract on options trades, while Vanguard charges $1 per contract for customers with less than $1 million in assets.
What is better than an ETF? ›Index mutual funds
They can also be a low-cost way to invest—many have annual expenses of less than 0.10%. A few scenarios where an index fund may be a better option than an ETF: You can buy an index mutual fund that has lower annual operating expenses.
- Disadvantages of ETFs. ETF trading comes with some drawbacks, which include the following:
- Trading fees. ...
- Operating expenses. ...
- Low trading volume. ...
- Tracking errors. ...
- Potentially less diversification. ...
- Hidden risks. ...
- Lack of liquidity.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.
Do you pay taxes on ETF if you don't sell? ›Just as with individual securities, when you sell shares of a mutual fund or ETF (exchange-traded fund) for a profit, you'll owe taxes on that "realized gain." But you may also owe taxes if the fund realizes a gain by selling a security for more than the original purchase price—even if you haven't sold any shares.
How long should you hold an ETF? ›Holding period:
If you hold ETF shares for one year or less, then gain is short-term capital gain. If you hold ETF shares for more than one year, then gain is long-term capital gain.
Ramsey suggested that if you do want to engage in passive investing, you're better off doing it with an index mutual fund than with an ETF that tracks a market or financial index. His reasoning: Mutual funds are meant to be invested in over the long term, while ETFs trade daily.
What ETFs are best during recession? ›XLP, XLV, & XLU represent top recession ETFs in 2023 in my opinion. History suggests these sectors can outperform in bear markets. Healthy dividend yields and strong underlying businesses in the funds can mean ballast for a defensive portfolio.
Which sectors will outperform in 2023? ›- Consumer staples. ...
- Precious metals. ...
- Healthcare.
What is the number one stock for 2023? ›
1. Mastercard. The first top-notch stock that can help you build wealth in the new year is payment processor Mastercard (MA -1.75%).
What industry will boom in 2023? ›- Shipping and delivery services. The rising popularity of online purchases has led to an increased demand for shippers and is fast securing its place as the growth industry front-runner. ...
- The healthcare industry. ...
- Travel and food industries. ...
- Online retail. ...
- The AI revolution.
Data from the past suggest that there are good reasons to believe 2023 may be a good year for the market. Inflation and the earnings contractions may seem bearish, but they might be very bullish. The key mechanism leading the market is that it's 6 to 12 months ahead of the economic data.
Is 2023 a good time to start investing? ›Stocks are down
When something's cheap you can buy more of it for the same price, which makes 2023 a great time to start investing. Using the ratio of stock prices to corporate earnings as a measure of valuation, the S&P 500 now trades its cheapest level in years.
- #1. SPDR® S&P Oil & Gas Equipment&Svcs ETF XES.
- #2. Vanguard Energy ETF VDE.
- #3. SPDR® Kensho Clean Power ETF CNRG.
9:30–9:40 a.m. Stocks that open higher or lower than they closed typically continue rising or falling for the first five to 10 minutes… 9:40–10:00 a.m. … before reversing course for the next 20 minutes—unless the overnight news was especially significant.
Is it better to buy ETF when market is down? ›Many people are inclined to believe that investing in stocks when the market is down is a poor choice. But actually, the opposite tends to hold true. Stock market downturns can be an ideal time to invest because you can get in at lower price points.