Betting on the best ETFs to buy now can help simplify your investment strategy.
ETFs, or exchange-traded funds, are a compelling way for investors to beat the market without having to manage a boatload of individual stocks. Moreover, these funds tend to offer exposure to multi-year trends and themes, making them ideal bets for diversifying investment portfolios.
As we advance, ETFs will continue gaining popularity, with their appeal largely tied to their low-maintenance nature, minimal fees, and the ability to target a swath of stocks with a single investment.
That said, here are the three best ETFs to buy, effectively aligning with a strategic, low-cost investment approach. These top ETFs have been excellent performers over the years, with robust fundamentals while offering healthy long-term upside potential. Moreover, they have had an excellent track record of offering steady returns for their investors, which adds to their attractiveness.
Best ETFs to Buy: iShares US Technology ETF (IYW)
Investing in the iShares US Technology ETF (NYSEARCA:IYW) feels like a tech enthusiast’s dream come true. IYW stock offers access to some of the elite U.S. tech companies, including heavyweights that have led the market to monumental gains. Roughly 45% of its total assets are made up of three of the biggest tech stocks in Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and Nvidia (NASDAQ:NVDA). With these elite U.S. tech companies leading the charge, IYW stock is positioned enviably to outperform the broader market with considerable aplomb.
Moreover, IYW’s appeal is bolstered further by its reasonable 0.40% expense ratio, making it a cost-effective option for tech investors. Also, IYW stock has trumped broader market gains and then some over the past decade. Its 10-year return stands at 531%, which comfortably beats the S&P 500’s 179% gain. This discrepancy can be seen across multiple time horizons, including last year where IYW stock was up 43% while the broader market was up 24%.
Global X Artificial Intelligence & Technology ETF (AIQ)
AI has been hands-down the biggest investing trend in the past year, and perhaps the Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) offers investors a front-row seat to the industry’s finest. With a robust annual growth of 31% in the past year and over 120% in the past five years, AIQ stands out as a top performer among AI-focused ETFs. Its portfolio of 91 holdings and a competitive 0.68% total expense ratio make it an attractive option for those looking to pounce on the burgeoning AI and big data sectors.
Moreover, with its top 10 holdings representing 36% of total assets, AIQ stock effectively mitigates risk better than most of its peers. Nvidia plays a key role in driving its stock, but its investments across the AI landscape effectively shield it from downside risk. This strategic distribution ensures that the remaining portfolio components can sustain the fund’s performance when Nvidia is in correction territory.
Avantis U.S. Large Cap Value ETF (AVLV)
The Avantis U.S. Large Cap Value ETF (NYSEARCA:AVLV) offers investors an excellent opportunity to tap into high-quality, bargain large-cap U.S. stocks. By focusing on stocks trading at lower valuations and strong profit margins, the Avantis ETF aims to significantly enhance potential returns.
The ETF currently manages over $3.6 billion in assets, spanning various sectors, including healthcare, technology, financial services, etc. Moreover, it has holdings in 314 companies, with investments in some of the stock market’s darlings, including Meta (NASDAQ:META), JPMorgan Chase (NYSE:JPM), Costco (NASDAQ:COST)
The fund’s balanced approach, targeting undervalued profitable companies, gives it an edge. It effectively provides an investment vehicle for diversifying their portfolio with strong, stable, and growth-oriented assets. Moreover, AVLV stock yields 1.62%, with two consecutive years of payout growth. Though its payout growth rate may be unimpressive, I wouldn’t want bet against the massive potential of large-cap U.S. stocks.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
