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
ETF | Ticker | Assets Under Management (AUM) | Expense Ratio | Description |
|---|---|---|---|---|
Vanguard S&P 500 ETF | $764.9 billion | 0.03% | Fund that tracks the S&P 500 | |
Invesco QQQ Trust | $384.2 billion | 0.2% | Fund that tracks the Nasdaq-100 | |
Vanguard Growth ETF | $195.7 billion | 0.04% | ETF that invests in large-cap U.S. growth stocks | |
iShares Core S&P Small-Cap ETF | $86.0 billion | 0.06% | Fund that tracks the S&P SmallCap 600 index | |
Schwab U.S. Dividend Equity ETF | $72.0 billion | 0.06% | ETF that invests in 100 high-yielding U.S. stocks with histories of increasing their dividends | |
Vanguard Total Stock Market ETF | $550.0 billion | 0.03% | Fund that holds more than 3,500 U.S. stocks of all sizes | |
iShares Core MSCI Total International Stock ETF | $50.4 billion | 0.07% | ETF that holds around 4,250 international stocks of all sizes |
1. Vanguard S&P 500 ETF
Vanguard created the index fund. If you're looking for an S&P 500 index fund, the Vanguard S&P 500 ETF (VOO -0.58%) is hard to beat.
It offers a dirt-cheap expense ratio of just 0.03%, compared to the 0.22% average for similar funds. This lower expense ratio means that for every $10,000 invested with the fund, investors will pay just $3 in annual fees versus $22 in a typical competing fund.
The Vanguard S&P 500 ETF is one of the largest and most popular ETFs. It was the largest ETF by assets under management, or AUM, in October 2025. The ETF's combination of low costs and large size makes it a great choice if you're looking to invest in the broader market. Because of its history, diversification, and exposure to blue chip stocks, many investors consider it one of the best ETFs to buy and hold.
The S&P 500 has an excellent track record of delivering returns for investors. Over the last 50 years, the average stock market return, as measured by the S&P 500, has been 8% with dividends reinvested. The Vanguard S&P 500 ETF is a low-cost way to capture the market's returns.
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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