OK, so you’re wondering what are the best ETFs to buy now. Excellent. Do you even know what an ETF is? No problem if you don’t.
What Is an ETF?
As Charles Schwab explains, “ETFs or “exchange-traded funds” are exactly as the name implies: funds that trade on exchanges, generally tracking a specific index. When you invest in an ETF, you get a bundle of assets you can buy and sell during market hours—potentially lowering your risk and exposure, while helping to diversify your portfolio.”
Sounds pretty great, right?
Offering a diversified approach, ETFs provide exposure to various sectors, asset classes, and investment strategies.
NerdWallet breaks it down into an even simpler explanation, “An exchange-traded fund, or ETF, is a basket of investments like stocks or bonds. Exchange-traded funds let you invest in lots of securities all at once, and ETFs often have lower fees than other types of funds. ETFs are traded more easily too.”
An Exchange-Traded Fund (ETF) is a type of investment fund that trades on stock exchanges, much like individual stocks. ETFs are designed to track the performance of a specific index, commodity, sector, or asset class. They offer investors a way to gain exposure to a diversified portfolio of assets without having to buy each security individually.
ETFs are structured as open-ended investment companies or unit investment trusts. They typically hold a basket of assets, such as stocks, bonds, commodities, or a combination thereof. The value of an ETF is determined by the value of its underlying assets.
One of the primary advantages of ETFs is their liquidity. They can be bought and sold throughout the trading day at market-determined prices, providing investors with flexibility and ease of trading. Additionally, ETFs often have lower expense ratios compared to mutual funds, making them a cost-effective investment option.
ETFs come in various types, including equity ETFs, bond ETFs, commodity ETFs, sector ETFs, and thematic ETFs, among others. Each type of ETF offers exposure to a specific segment of the market, allowing investors to tailor their investment strategies to their preferences and objectives.
Overall, ETFs have gained popularity among investors due to their diversification benefits, liquidity, transparency, and cost-efficiency. They serve as valuable tools for building diversified investment portfolios and achieving long-term financial goals.
So, Simply Put, an ETF Is a Cocktail
We like to think of it this way. You could buy securities individually and make your own mix. You could also buy tequila, limes and triple sec and make a margarita at home.
However, you like to go out for a margarita and have a professional put it all together for you, right? As is the same with mixing up an ETF.
9 Best ETFs to Buy Now
So you’re ready to get in the mix and buy some ETFs. Perhaps you use an app like Acorns or Stash. Maybe you are a seasoned investor, or perhaps you are just beginning.
Here’s some ETFs experts recommend buying now.
#1 SOXX iShares Semiconductor ETF
With the semiconductor industry driving technological innovation across various sectors, investing in semiconductor ETFs can offer significant growth potential. SOXX, managed by iShares, tracks the PHLX Semiconductor Sector Index and includes top semiconductor companies like NVIDIA, Intel, and Taiwan Semiconductor.
#2 SMH VanEck Semiconductor ETF
Another noteworthy player in the semiconductor ETF arena is SMH by VanEck. This ETF aims to replicate the performance of the MVIS US Listed Semiconductor 25 Index, providing exposure to the leading semiconductor companies in the United States.
#3 XLK Technology Select Sector SPDR Fund
Managed by State Street Global Advisors, XLK tracks the Technology Select Sector Index, encompassing prominent tech giants like Apple, Microsoft, and Alphabet.
#4 IYW Shares U.S. Technology ETF
IYW offers a comprehensive approach to investing in the U.S. technology sector. Managed by iShares, this ETF tracks the Dow Jones U.S. Technology Index, providing exposure to a diverse range of technology-related companies.
#5 Schwab High Yield Bond ETF
Fixed-income investors seeking attractive yields amid volatile markets may find solace in SCHY. This ETF, managed by Charles Schwab Investment Management, focuses on high-yield bonds, offering income potential with a diversified portfolio.
#6 Vanguard 500 Index ETF (VOO)
VOO is a staple in many investment portfolios seeking exposure to the broader equity market. Managed by Vanguard, this ETF tracks the performance of the S&P 500 Index, providing investors with diversified exposure to 500 of the largest U.S. companies.
#7 SPDR Gold MiniShares Trust
In times of economic uncertainty or as a hedge against inflation, gold often shines as a safe-haven asset. GLDM, managed by State Street Global Advisors, provides investors with a cost-effective and convenient way to invest in gold, tracking the performance of the price of gold bullion.
#8 ARK Innovation ETF (ARKK)
Managed by ARK Invest, ARKK is renowned for its focus on disruptive innovation. This ETF invests in companies that are at the forefront of transformative technologies, including genomics, robotics, and artificial intelligence. With visionary leadership and a forward-thinking approach, ARKK offers investors exposure to potentially high-growth opportunities.
#9 iShares Global Clean Energy ETF (ICLN)
As the world transitions towards renewable energy sources, ICLN presents an enticing investment opportunity. Managed by iShares, this ETF invests in companies involved in the production and distribution of clean energy. With growing environmental awareness and supportive government policies, ICLN offers investors exposure to the rapidly expanding clean energy sector.
What Now?
Now you have already taken a step in buying ETFs, because you just completed this article. Excellent work!
Remember to consult a financial advisor or other financial professional before you make any moves.
