The best exchange-traded funds (“ETFs”) can deliver excellent returns for investors while reducing their investment risks – all for one low cost. With thousands of ETFs available, however, it may be tough for investors to find the top funds that meet their needs.
Investors on the hunt for funds may find it useful to divide the market into convenient categories such as index ETFs, international ETFs, and dividend ETFs. This article also includes sections on the best sector ETFs, the best real estate investment trust (“REIT”) ETFs, and the best bitcoin ETFs.
How Marketwise Selected These ETFs
Marketwise chose the best ETFs based on the following criteria:
- Strong annual long-term returns, typically over five years
- Low cost (i.e., low expense ratio)
- Popular segments of the market, such as dividends or sectors
- No leveraged or short ETFs
Data from Morningstar as of March 6, 2026
Best Index ETFs
The funds below are based on major stock indexes such as the S&P 500 Index, which includes hundreds of America’s top companies, or the Nasdaq 100 Index, which includes many of the top tech stocks, including all of the Magnificent 7 stocks.
These funds are among the largest in the world in terms of the total assets under management. They’re some of the most popular indexes to invest in and have posted solid long-term returns.
Best International ETFs
International ETFs offer investors ownership in foreign stocks without the hassle of having to buy them on a foreign exchange. Funds may offer various types of exposure, such as to developed markets or emerging markets, or they may invest based on geography, such as Asia or Europe.
Best Sector ETFs
This type of ETF invests only in one specific industry of stocks, such as energy, financials, or semiconductors. Sector funds can be a great idea for investors looking to ride a specific trend instead of trying to pick the winners in an industry.
Best Dividend ETFs
The best dividend ETFs own only stocks that pay dividends. These stocks tend to be more stable than the market as a whole, making them more attractive for certain types of investors (such as retirees) looking for regular income. See this article for more top dividend funds.
Best REIT ETFs
REITs are a special kind of stock that pays no corporate tax in exchange for paying out most of its taxable income as a dividend. These companies may own a variety of real estate types (apartments, cell towers, medical buildings, and commercial). REIT ETFs can be a popular way to generate a cash dividend without having to analyze individual REITs.
Best Bitcoin ETFs
The best bitcoin ETFs track the spot price of bitcoin closely, allowing investors to generate nearly the same returns of bitcoin without having to buy it on a crypto exchange. With an ETF, investors don’t need to worry about the security of their crypto – that’s up to the fund company.
Are ETFs a Good Type of Investment?
ETFs are an excellent investment for investors at all levels. They offer a range of benefits:
- Strong long-term returns:The best ETFs can deliver double-digit annual returns for years and years.
- Wide investment choice:ETFs can give you exposure to many different sectors of the market, depending on your needs, such as high-growth stocks or dividend stocks.
- Diversification:Since ETFs own dozens – sometimes hundreds – of stocks, they reduce investment risk. Any single stock won’t hurt the fund’s performance too much.
- Low cost:The best ETFs charge a low expense ratio, which is the annual fee to own the fund shown as a percentage of your investment in it. For example, a fund with a 0.10% expense ratio would charge $10 annually for every $10,000 invested in the fund.
- Tax-efficient:ETFs are structured to be more tax-efficient than mutual funds. They make only minimal capital-gains distributions, meaning tax liabilities are lower for investors.
But not all ETFs are the same. The performance of the ETF depends on what it owns. Stock ETFs will tend to generate high returns over time, though they can be volatile in the short term. In contrast, bond ETFs will be more stable in the short term, but the returns will be lower.
It’s vital that you understand what your ETF owns – its investing mandate – so that you can understand its potential long-term returns. Look at a fund’s long-term performance (five- and 10-year annualized returns) to get a sense of how it could perform over time.
Regards,
James Royal
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