According to BlackRock (NYSE: BLK), exchange-traded funds (ETFs) represent 12.6% of equity assets in the United States. Investors are gravitating toward ETFs for their low fees and built-in diversification. 

ETFs provide the perfect entry point if you're interested in a certain industry. Using an ETF as a foundational holding, and then adding positions in your favorite stocks over time, is a great way to manage risk. The Invesco Aerospace & Defense ETF (PPA 2.79%), the iShares Global Clean Energy ETF (ICLN -2.29%), and the Utilities Select Sector SPDR (XLU 1.92%) stand out as three top ETFs that are worth a look now. 

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This ETF's underperformance won't last forever

Lee Samaha (Invesco Aerospace & Defense ETF): The 7.6% increase in 2023 isn't bad for the Invesco Aerospace & Defense ETF. Still, it's significantly behind the 15.9% return of the S&P 500, and it's arguably a disappointment considering the favorable backdrop for defense spending orders. 

In reality, defense orders have improved at RTX, Boeing, and General Electric, which are all in the Invesco ETF. 

However, ongoing supply chain issues, some caused by the very conflict in Europe that's stimulating defense spending, have created product shortages and margin pressures. In short, defense companies are having difficulty fulfilling orders. Quoting GE CEO Larry Culp on the recent earnings call: "Demand is not our fundamental challenge in the Defense arena; throughput is. And the supply chain challenges that we've talked about and everyone talks about certainly applied to defense."

That said, the supply chain issues won't last forever, end demand remains solid, and it's possible that a slowdown in the economy could ease the supply chain pain for defense companies. 

All told, this could prove an excellent time to get exposure to defense. The Invesco ETF -- designed to invest in companies involved "in the development, manufacturing, operations and support of U.S. defense, homeland security, and aerospace operations" -- is an ideal way to invest in the theme.

The best clean-energy ETF out there

Daniel Foelber (iShares Global Clean Energy ETF): If you're interested in renewable energy, one of the best places to start is the iShares Global Clean Energy ETF. It includes some of the top solar technology companies, major utilities, panel and turbine manufacturers, and more.

One of the greatest challenges with investing in renewable energy is that so many top companies aren't traded on U.S. exchanges. By purchasing shares of an ETF, you're able to get access to foreign companies that would otherwise be complicated or simply tedious to own stock in.

Another standout quality of the ETF is that it features an expense ratio of just 0.4%, which is reasonable for the services it provides.

Finally, a third feature worth discussing is that one share in the ETF is $16.09 at the time of this writing, which is a lot cheaper than buying a single share of many of the stocks in the ETF. Granted, there are fractional share options available. But overall, the ETF provides an affordable entry point into a diversified portfolio of renewable-energy companies.

The ETF hit a 52-week low on Aug. 18 and is currently hovering around a three-year low. The main reason for the sell-off is that the solar industry and the wind industry are in a cyclical downturn. Growth is slowing. And higher interest rates are making it far more expensive to fund utility-scale projects.

Now is the perfect time to take a look at this clean energy ETF, which is down more than 30% over the past year.

This inexpensive utilities ETF can power your portfolio with passive income

Scott Levine (Utilities Select Sector SPDR)Falling more than 10% year to date, the Utilities Select Sector SPDR hasn't provided investors with much to celebrate in 2023. Patient investors who are happy to swim upstream while others are flapping their fins to head downstream, however, will find the opportunity in this utilities ETF interesting -- especially considering the alluring 3.3% yield and the low 0.1% expense ratio.

Providing exposure to a variety of utilities, the Utilities Select Sector SPDR attempts to represent the utilities sector of the S&P 500. With a 15.7% weighting, NextEra Energy represents the largest holding in the ETF. A leader in clean energy, NextEra Energy foresees strong growth in the years ahead, based on its ample backlog of renewable-energy projects. Southern Company and Duke Energy represent the second and third largest holdings, respectively, in the ETF. While the Utilities Select Sector SPDR has exposure to a variety of utilities -- water, independent power producers, and gas -- it's electric utilities that account for the majority of the ETF's holdings, representing a 66% weighting.

Oftentimes, it's conservative investors who are most frequently attracted to the utilities sector. But that doesn't mean other types of investors shouldn't consider carving out a niche of their portfolios for the Utilities Select Sector SPDR. Even those who are more focused on growth opportunities should fortify their holdings with a less aggressive investment like the Utilities Select Sector SPDR to mitigate their risk exposure.