Exchange-traded funds (ETFs) are investment vehicles that trade like a stock but give investors ownership of a broad range of stocks or other assets. ETFs offer investors an appealing alternative to owning individual stocks.
Exchange-Traded Fund (ETF)
There are all kinds of ETFs available. Some track major indexes, such as the S&P 500 or the Nasdaq Composite. Others give investors exposure to certain parts of the world, like China or emerging markets. And some ETFs concentrate on certain sectors, such as technology or banking, or specific types of stocks, like dividend or growth stocks.
In a challenging market environment, ETFs can help reduce one considerable risk of owning an individual stock since they tend to be less volatile. Although they're similar in principle to mutual funds, they're easier to buy and trade than typical mutual funds and tend to have lower fees. If you're looking for ETFs to invest in, keep reading to see seven of the best.
Top seven ETFs to buy now
There are several types of ETFs that investors can buy, including:
- Broad index funds: Many of the largest ETFs focus on tracking a broad market index such as the S&P 500 or the Nasdaq-100. These funds enable investors to gain diversified market exposure through a single low-cost fund.
- Sector ETFs: These ETFs focus on stocks in a specific stock market sector, such as technology, energy, or healthcare.
- Asset-focused funds: Asset-focused funds invest in a specific asset class such as government bonds, dividend stocks, small-cap stocks, or commodities.
- Thematic ETFs: Thematic funds invest in an investment theme such as semiconductor stocks, artificial intelligence (AI), international stocks, or clean energy.
With those fund types in mind, here are some of the best ETFs to buy this month.
Exchange-Traded Fund (ETF) and Ticker | Assets Under Management (AUM) | Expense Ratio | Description |
|---|---|---|---|
Vanguard S&P 500 ETF (NYSEMKT:VOO) | $840.1 billion | 0.03% | Fund that tracks the S&P 500 |
Invesco QQQ Trust (NASDAQ:QQQ) | $407.7 billion | 0.2% | Fund that tracks the Nasdaq-100 |
Vanguard Growth ETF (NYSEMKT:VUG) | $202.7 billion | 0.04% | ETF that invests in large-cap U.S. growth stocks |
iShares Core S&P Small-Cap ETF (NYSEMKT:IJR) | $88.0 billion | 0.06% | Fund that tracks the S&P SmallCap 600 index |
Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD) | $71.7 billion | 0.06% | ETF that invests in 100 high-yielding U.S. stocks with histories of increasing their dividends |
Vanguard Total Stock Market ETF (NYSEMKT:VTI) | $573.1 billion | 0.03% | Fund that holds more than 3,500 U.S. stocks of all sizes |
iShares Core MSCI Total International Stock ETF (NASDAQ:IXUS) | $52.6 billion | 0.07% | ETF that holds around 4,250 international stocks of all sizes |
1. Vanguard S&P 500 ETF
NYSEMKT: VOO
Key Data Points
NASDAQ: QQQ
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If you're looking to gain exposure to big tech stocks, Invesco QQQ Trust (QQQ -1.97%) is an excellent choice. The ETF tracks the Nasdaq-100 index, which includes 100 of the Nasdaq's largest nonfinancial companies.
The top stocks in the ETF are Nvidia (NVDA -3.59%), Apple (AAPL -2.90%), Microsoft (MSFT -1.25%), Broadcom (AVGO -4.87%), and Amazon (AMZN -3.70%). As one of the best-performing ETFs, it boasts an affordable expense ratio of 0.2%.
As of January 2026, the Invesco QQQ Trust had generated a total return of around 491% over the past decade. A $10,000 investment made in this ETF 10 years ago would be worth more than $59,911 today.
The Nasdaq-100's focus on innovative technology companies positions it to continue delivering strong total returns, especially as artificial intelligence (AI) accelerates growth in the tech sector in the coming years.
3. Vanguard Growth ETF
NYSEMKT: VUG
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If you want to invest in growth stocks but don't want to be an active stock picker, the Vanguard Growth ETF (VUG -2.42%) makes that easy. The ETF holds large-cap growth stocks and tracks the CRSP US Large-Cap Growth index.
Like Invesco QQQ Trust and Vanguard S&P 500, the Vanguard Growth ETF's biggest holdings are Nvidia, Apple, and Microsoft. The growth-focused ETF also held many other growth stocks among the roughly 160 companies in the fund as of January 2026. The Vanguard Growth ETF offers a rock-bottom expense ratio of just 0.04%. Its low cost makes it a good deal for anyone looking for a growth stock ETF.
4. iShares Core S&P Small-Cap ETF
NYSEMKT: IJR
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NYSEMKT: SCHD
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6. Vanguard Total Stock Market ETF
Should you invest in ETFs?
Exchange-traded funds can work for almost any kind of investor, regardless of your investing style or the type of stocks you're looking to invest in. Hundreds of ETFs offer exposure to a wide range of sectors and different investing goals, such as dividends or growth. These funds have several benefits, including:
- Potentially lower risk and volatility compared to investing in individual stocks.
- A passive investment with a low management fee.
- Ability to invest broadly in a sector or trend through a simple investment vehicle.
However, there are also some drawbacks to investing in ETFs that investors need to consider, including:
- They have the potential to underperform a portfolio of individual stocks.
- The higher management fees of some funds can eat into their returns.
- Leverage and other factors can cause some funds to deliver poor long-term performance.
For most investors, holding at least one or two high-quality ETFs makes sense, especially if you want to eliminate some of the work of picking individual stocks. The list above offers a good start if you're looking for some of the best ETFs to buy.
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