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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 to buy in 2026.
Investors looking to buy ETFs may find it useful to divide the market into convenient categories such as index, international, and dividend ETFs. Higher-risk Investors also have a variety of more speculative funds to consider, such as the best bitcoin ETFs and the best leveraged ETFs.
ETFs make it easy to invest in market trends without analyzing individual stocks, so even beginning investors can earn attractive returns at low cost.
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
Data from Morningstar as of July 2, 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, such as Microsoft (MSFT) and Amazon (AMZN).
These funds are among the largest in the world by total assets under management. They’re some of the most popular indexes to invest in and have posted solid long-term returns. Note: The Invesco NASDAQ 100 ETF (QQQM) is a better pick than its much larger sibling, the Invesco QQQ Trust (QQQ), since it charges a lower expense ratio (0.15% vs 0.18%).
| Fund | YTD return | 5-year return annualized | Expense ratio | Assets |
| iShares Core S&P 500 ETF (IVV) | 10.0% | 13.2% | 0.03% | $889.1 billion |
| Vanguard S&P 500 ETF (VOO) | 10.0% | 13.2% | 0.03% | $1.7 trillion |
| State Street SPDR S&P 500 ETF Trust (SPY) | 9.9% | 13.1% | 0.095% | $777.4 billion |
| Invesco NASDAQ 100 ETF (QQQM) | 18.4% | 16.2% | 0.15% | $99.7 billion |
| Fidelity Nasdaq Composite Index ETF (ONEQ) | 12.5% | 13.5% | 0.21% | $10.6 billion |
| Vanguard Total Stock Market ETF (VTI) | 10.8% | 12.1% | 0.03% | $2.3 trillion |
| State Street SPDR Dow Jones Industrial Average ETF Trust (DIA) | 9.5% | 10.5% | 0.16% | $44.9 billion |
| Vanguard Russell 2000 ETF (VTWO) | 22.2% | 6.8% | 0.06% | $17.5 billion |
| iShares Russell 2000 ETF (IWM) | 22.1% | 6.6% | 0.19% | $83.2 billion |
Best International ETFs
International ETFs offer investors ownership in foreign stocks without the hassle of buying them on a foreign exchange. Funds may offer various types of exposure, such as developed or emerging markets, or they may invest by geography, such as Asia or Europe.
| Fund | YTD return | 5-year return annualized | Expense ratio | Assets |
| Vanguard FTSE Developed Markets ETF (VEA) | 13.4% | 9.7% | 0.03% | $317.3 billion |
| Vanguard Total International Stock ETF (VXUS) | 12.7% | 8.5% | 0.05% | $652.3 billion |
| iShares Core MSCI EAFE ETF (IEFA) | 9.2% | 8.6% | 0.07% | $184.5 billion |
| Vanguard FTSE Emerging Markets ETF (VWO) | 10.3% | 5.1% | 0.06% | $162.8 billion |
Best Sector ETFs
This type of ETF invests only in a specific industry, such as energy, financials, or semiconductors. Sector funds can be a great idea for investors looking to ride a specific trend rather than picking winners in an industry.
The top semiconductor fund, for example, gives you exposure to the whole sector, including heavyweights like Nvidia (NVDA) and Broadcom (AVGO).
| Fund | YTD return | 5-year return annualized | Expense ratio | Assets |
| Vanguard Information Technology ETF (VGT) | 24.7% | 19.4% | 0.09% | $170.1 billion |
| State Street Energy Select Sector SPDR Fund (XLE) | 19.7% | 18.2% | 0.08% | $35.5 billion |
| State Street Financial Select Sector SPDR Fund (XLF) | 0.9% | 10.1% | 0.08% | $52.8 billion |
| iShares Semiconductor ETF (SOXX) | 99.4% | 33.1% | 0.34% | $42.9 billion |
| State Street Utilities Select Sector SPDR ETF (XLU) | 6.3% | 10.2% | 0.08% | $22.9 billion |
Best Dividend ETFs
The best dividend ETFs are comprised of stocks that pay dividends. These stocks tend to be more stable than the market as a whole, making them more attractive to certain investors (such as retirees) seeking regular income. (Read this article for more top dividend funds.)
| Fund | YTD return | 5-year return annualized | Expense ratio | Assets |
| Schwab U.S. Dividend Equity ETF (SCHD) | 18.0% | 8.5% | 0.06% | $96.3 billion |
| Vanguard High Dividend Yield Index ETF (VYM) | 11.6% | 11.7% | 0.04% | $96.1 billion |
| Vanguard Dividend Appreciation ETF (VIG) | 8.5% | 10.8% | 0.04% | $127.8 billion |
Best Real Estate and REIT ETFs
REITs are a special kind of stock that pays no corporate tax in exchange for paying out most of their 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.
| Fund | YTD return | 5-year return annualized | Expense ratio | Assets |
| Schwab U.S. REIT ETF (SCHH) | 15.3% | 3.7% | 0.07% | $11.2 billion |
| iShares U.S. Real Estate ETF (IYR) | 10.2% | 2.7% | 0.38% | $4.6 billion |
| Vanguard Real Estate ETF (VNQ) | 11.6% | 2.8% | 0.13% | $69.8 billion |
Best Bond ETFs
The best bond ETFs hold collections of bonds that track specific indexes. These indexes may include bonds from across the market or from a sub-section of the market, such as short-term U.S. Treasurys, investment-grade issuers, or foreign issuers.
| Fund | YTD return | 5-year return annualized | Expense ratio | Assets |
| Vanguard Total Bond Market ETF (BND) | 0.6% | 0.0% | 0.03% | $394.4 billion |
| iShares Core US Aggregate Bond ETF (AGG) | 0.6% | 0.1% | 0.03% | $138.1 billion |
| Vanguard Total International Bond ETF (BNDX) | 1.3% | 0.4% | 0.07% | $122.0 billion |
| iShares 0-3 Month Treasury Bond ETF (SGOV) | 1.8% | 3.6% | 0.09% | $94.7 billion |
Best Commodity ETFs
Commodity ETFs let investors buy into the performance of specific commodities or even commodity producers (miners, for example). In some cases, such as gold and silver funds, the fund’s performance can closely track the actual commodity’s price movement.
The list below includes the SPDR Gold MiniShares ETF, which is a better pick than the larger, more well-known SPDR Gold Shares (GLD) because of its lower expense ratio (0.10% vs 0.40%).
Investors can discover more top gold funds and more top silver funds.
| Fund | YTD return | 5-year return annualized | Expense ratio | Assets |
| United States Oil Fund (USO) | 49.3% | 15.3% | 0.86% | $1.7 billion |
| SPDR Gold MiniShares (GLDM) | -6.4% | 17.7% | 0.10% | $27.7 billion |
| iShares Silver Trust (SLV) | -16.8% | 17.3% | 0.50% | $27.9 billion |
Best Trending ETFs
The best-trending ETFs track sectors of the market that have been especially hot lately, including memory, AI, robotics, and space stocks. They’ve shown incredibly strong performance over the last year, but may not have the long-term track record of other funds.
| Fund | YTD return | 5-year return annualized | Expense ratio | Assets |
| Roundhill Memory ETF (DRAM) | 137.2% | N/A | 0.65% | $24.4 billion |
| iShares Future AI & Tech ETF (ARTY) | 51.9% | 11.3% | 0.47% | $3.8 billion |
| WisdomTree Artificial Intelligence and Innovation Fund (WTAI) | 54.5% | N/A | 0.45% | $639.1 million |
| Procure Space ETF (UFO) | 30.0% | 11.9% | 0.75% | $836.3 million |
Alternative ETFs to Consider
The following funds are more speculative, and while they may be popular with some traders, investors should fully understand the risks of investing in them.
Best Bitcoin ETFs
The best bitcoin ETFs track the spot price of bitcoin closely, allowing investors to generate nearly the same returns as 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.
- Franklin Bitcoin ETF (EZBC)
- Bitwise Bitcoin ETF (BITB)
- ARK 21Shares Bitcoin ETF (ARKB)
Best Leveraged ETFs
These funds use derivatives, such as options, to offer the potential for two or even three times the daily gains of a stock or stock index. This structure, however, makes them highly volatile.
- ProShares UltraPro QQQ (TQQQ)
- Direxion Daily Semiconductor Bull 3X ETF (SOXL)
- ProShares Ultra S&P 500 (SSO)
Best Inverse ETFs
These funds use derivatives, such as options, to generate inverse performance relative to the stock or stock index they track. That is, the fund goes up when the stock index falls, and vice versa.
- ProShares UltraPro Short QQQ ETF (SQQQ)
- ProShares UltraPro Short S&P500 (SPXU)
- Direxion Daily Semiconductor Bear 3X ETF (SOXS)
Are ETFs a Good Investment in 2026?
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, the annual fee to own the fund, expressed as a percentage of your investment. For example, a fund with a 0.10% expense ratio would charge $10 annually for every $10,000 invested.
- Tax-efficient: ETFs are structured to be more tax-efficient than mutual funds. They make only minimal capital gains distributions, which means 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 investment mandate – so you can assess 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.
ETFs vs. Mutual Funds
ETFs have surged in popularity over the last two decades, effectively displacing mutual funds as the preferred way to invest in a basket of stocks. They offer investors a number of advantages over traditional mutual funds:
- ETFs are often passive, while many mutual funds are active: The most popular ETFs simply track a preselected index, such as the S&P 500, rather than actively trying to beat the market. In contrast, many mutual funds try to beat the market by using a team of analysts who decide what to invest in and how much to invest.
- ETFs are typically cheaper to own than mutual funds: Because they’re simply tracking an index, ETFs can charge a lower expense ratio for their funds (i.e., the fund’s cost to investors). In contrast, mutual funds tend to be more expensive because they need to pay a team of analysts.
- ETFs trade throughout the day: ETFs trade on the exchange much like a regular stock, allowing investors to buy and sell at any time the market is open. In contrast, mutual funds trade only after the market closes, so investors can never be fully sure of their purchase or sale price until the trade closes.
- ETFs usually have no minimum investment: Often, the only minimum investment in an ETF is the cost of a share, though many brokers let investors buy partial shares these days. In contrast, many mutual funds have $1,000, $3,000, or even $10,000 minimum initial investments, making it harder to get started.
- ETFs have tax advantages over mutual funds: ETFs incur capital gains taxes only when investors sell them. In contrast, mutual funds may pass on capital gains liability to investors even if the investor has not sold a share of the fund.
Besides these advantages, ETFs also offer investors a wide range of themed investments, based on sectors, stock indexes, bonds, and almost any other category you could imagine.
Regards,
James Royal, PhD
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