Best ETFs to Invest in 2025
Exchange-Traded Funds (ETFs) continue to be one of the most popular investment vehicles for both new and seasoned investors due to their diversification, low fees, and market exposure. As 2025 unfolds, investors looking for long-term growth and stability should consider ETFs that have demonstrated consistent performance, solid historical returns, and exposure to future growth trends. Below, we rank and analyze the best ETFs to invest in 2025.
1. Invesco QQQ Trust (QQQ)
Category: Growth, Technology-Heavy
The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100 Index, has consistently outperformed the S&P 500, making it a prime choice for investors seeking exposure to large-cap growth stocks. With nearly 60% of its holdings in technology companies and another 20% in consumer discretionary stocks, QQQ benefits from the AI and cloud computing revolution. Its annualized 5-year return of 18.8% and an expense ratio of 0.20% make it a strong contender for long-term investors.
2. Vanguard S&P 500 ETF (VOO)
Category: Broad Market, Large-Cap
For investors seeking market-wide exposure, Vanguard S&P 500 ETF (VOO) remains a top pick. Tracking the S&P 500 Index, this ETF provides diversified exposure to the U.S. stock market’s largest companies. With a 5-year annualized return of 14.3% and an incredibly low expense ratio of 0.03%, VOO is an excellent core holding for any portfolio.
3. Schwab U.S. Dividend Equity ETF (SCHD)
Category: Dividend, Value Investing
Investors looking for a blend of growth and income should consider Schwab U.S. Dividend Equity ETF (SCHD). With a focus on high-quality, dividend-paying stocks, SCHD provides a solid dividend yield of 3.6% and has returned 12% annually over the past five years with an expense ratio of 0.06% It is particularly attractive for those seeking stability in a volatile market.
4. Vanguard Information Technology ETF (VGT)
Category: Sector-Specific, Technology
For technology-focused investors, the Vanguard Information Technology ETF (VGT) offers exposure to industry leaders such as Apple, Microsoft, and Nvidia. With a 5-year annualized return of 21.45% and an expense ratio of 0.10%, this ETF is ideal for those who believe in the continued dominance of the tech sector.
5. iShares Core MSCI EAFE ETF (IEFA)
Category: International, Developed Markets
Investors looking to diversify internationally should consider iShares Core MSCI EAFE ETF (IEFA), which tracks developed markets outside the U.S. (Europe, Asia, and Australia). With a 5-year return of 6.2% and an expense ratio of 0.07%, this ETF provides global diversification while avoiding the risks of emerging markets.
6. Vanguard Real Estate ETF (VNQ)
Category: Real Estate, REITs
Real estate remains an excellent hedge against inflation, and the Vanguard Real Estate ETF (VNQ) offers exposure to U.S. real estate investment trusts (REITs). Despite 2.4% annualized returns over the last five years and an expense ratio of 0.12%, VNQ remains a key diversifier in a balanced portfolio, particularly for investors seeking income from real estate holdings.
7. iShares 20+ Year Treasury Bond ETF (TLT)
Category: Bonds, Fixed Income
As interest rates stabilize, long-term bonds may become more attractive. iShares 20+ Year Treasury Bond ETF (TLT) offers exposure to U.S. Treasury bonds, which tend to perform well during market downturns. While its 5-year return has been negative (-3.39%) and an expense ratio of 0.15%, it is a valuable risk management tool.
Investment Strategy: Dollar-Cost Averaging (DCA)
Investing in ETFs through dollar-cost averaging (DCA)—consistently investing a fixed amount at regular intervals—can help mitigate the impact of market volatility. This strategy is particularly effective when investing in long-term growth ETFs like QQQ, VOO, and SCHD.
Roundup
The best ETFs for 2025 include a mix of broad market funds, sector-specific ETFs, dividend plays, and fixed income investments. Whether you are a growth investor focused on QQQ and VGT, a value investor looking at SCHD, or a diversified investor considering VOO and IEFA, these ETFs provide solid long-term investment opportunities.
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