The Best ETFs to Buy Now

The best ETFs to buy now

Investors wondering where to find the best ETFs to buy can take heart in the fact that there have never been more options available.

Popular websites such as Yahoo Finance and Morningstar are just two great tools for DIY investors that offer simple screeners where you rank ETFs based on the specific criteria you're seeking.

Of course, a screener should just be a starting point in your research. You should always take the time to visit the ETF sponsor's website and do a little digging of your own.

With that in mind, let's take a look at the five best ETFs to buy now.

Data is as of June 17. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Charles Lewis Sizemore, CFA

I am the chief investment officer of Sizemore Capital Management LLC, a registered investment advisor based in Dallas, Texas, where I specialize in dividend-focused portfolios and in building alternative allocations with minimal correlation to the stock market. I am a regular contributor to several financial media outlets including Kiplinger, Forbes and MarketWatch, where I have been writing about stock and fund picks and investing topics for years.

Vanguard 500 Index ETF

• Type: Large blend
• Assets under management: $656.8 billion
• Dividend yield: 1.3%
• Expenses: 0.03%, or $3 annually for every $10,000 invested

Any discussion of the best ETFs to buy must start with a good S&P 500 index fund. This is where the ETF revolution started, and, decades later, it remains one of the best long-term builders of wealth you can buy.

As a market cap-weighted collection of 500 of the biggest American companies, the S&P 500 gives you instant access to industry leaders such as Apple (AAPL), Nvidia (NVDA), Meta Platforms (META) and Broadcom (AVGO).

In an uncertain market environment, it makes sense to stick with the biggest and best.

The S&P 500 Index is the most common benchmark for mutual funds, exchange-traded funds, hedge funds and just about everything else under the sun for a reason: It's exceptionally hard to beat over time.

In a report published earlier this year, S&P Global found that 90% of active large-cap fund managers underperformed the S&P 500 in the last 15 years.

Virtually every major exchange-traded fund sponsor has an S&P 500 index ETF product, and, by definition, they're all the same, which is literally the point. They all track the S&P 500.

That means the only way to differentiate the funds is by cost. With an expense ratio of just 0.03%, the Vanguard 500 Index ETF (VOO), also one of the best Vanguard ETFs, might as well be free to own. We're talking about $3 in annual expenses for every $10,000 invested.

The iShares Core S&P 500 ETF (IVV) offers identical exposure at the same expense ratio of 0.03%, while the older SPDR S&P 500 ETF Trust (SPY) charges a slightly higher 0.095%.

Take your pick. But whichever one you choose, long-term investors should consider making an S&P 500 index ETF a mainstay in their portfolios.

Learn more about VOO at the Vanguard provider site.

Vanguard Dividend Appreciation ETF

• Type: Large blend
• Assets under management: $105.3 billion
• Dividend yield: 1.8%
• Expenses: 0.05%

One of the best measuring sticks for quality is a company's history of raising its dividend.

Accountants can and sometimes do fudge the numbers on earnings. A creative accountant can even fudge the numbers on sales.

But dividends don't lie; they're paid in cold, hard cash.

There is no greater sign of management confidence than a dividend increase. Every additional dollar paid in dividends is a dollar no longer available to cover expenses.

It sends a powerful signal that management expects a lot more cash to come in to replace it.

Furthermore, the payment of a dividend encourages good behavior from management. It shows that they take their investors seriously and like to reward them.

A CEO who is on the hook to pay a dividend is a CEO who is less likely to blow the company's cash on vanity projects that destroy value.

With this in mind, investors seeking the best ETFs to buy now should look at the Vanguard Dividend Appreciation ETF (VIG).

VIG tracks the S&P U.S. Dividend Growers Index, which includes U.S. companies that have consistently increased their dividends every year for at least 10 consecutive years.

The index excludes the top 25% highest-yielding eligible companies from the index to avoid "yield traps," or companies at risk of cutting their dividends.

VIG is not one of Wall Street's best high-yield ETFs, with a dividend yield of not even 2%. But that's OK. The dividend in this case is less about raw yield and more about quality.

The dividend ETF is a who's who list of solid American blue chip stocks such as Broadcom, Microsoft (MSFT) and Walmart (WMT).

Learn more about VIG at the Vanguard provider site.

Vanguard U.S. Quality Factor ETF

• Type: U.S. Equity
• Assets under management: $391.4 million
• Dividend yield: 1.4%
• Expenses: 0.13%

When the world seems a little more chaotic than usual, a focus on quality makes sense.

Let's look at one of the best ETFs to buy that's specifically dedicated to identifying quality stocks: the Vanguard U.S. Quality Factor ETF (VFQY).

VFQY is a factor exchange-traded fund, what is sometimes referred to as a "smart beta" ETF.

Rather than simply choosing stocks based on market cap or sector, a factor ETF selects stocks based on fundamental or technical characteristics, such as profitability or momentum.

In the case of VFQY, the fund's investments are chosen based on Vanguard's quantitative assessment of a company's earnings and balance sheet quality.

The Vanguard U.S. Quality Factor ETF has some overlap with the S&P 500 and other major indexes, as giants such as 3M (MMM) and Apple are significant holdings.

But the fund's top 10 holdings include lesser-known names, such as industrial stocks Cintas (CTAS) and Fortinet (FTNT).

In typical Vanguard style, you won't have to pay much for this access. The ETF has an expense ratio of just 0.13%.

Learn more about VFQY at the Vanguard provider site.

SPDR Gold MiniShares

• Type: Commodities focused
• Assets under management: $15.8 billion
• Dividend yield: 0.00%
• Expenses: 0.10%

There's a lot of uncertainty swirling in the market at the moment.

The Federal Reserve has paused its rate-cut campaign amid sticky inflation, and concerns are rising that policies from the Trump administration will keep price growth elevated.

Volatility is likely to pick up in reaction, so having a crisis hedge such as gold in your portfolio isn't the worst idea.

Investing in gold is not easy for the average retail investor, though. But an excellent – and simple – way to get exposure to the precious metal is via the SPDR Gold MiniShares (GLDM).

GLDM is an exchange-traded fund backed by real, tangible gold bullion. Its share price tracks the price of gold, minus its very modest management fee.

This gold ETF is one of the cheapest ways to own the precious metal, as its expense ratio is extremely low at 0.10%.

Having at least a small allocation to gold in your portfolio makes sense in any environment. It makes a lot more sense amid rising uncertainty.

This is why the SPDR Gold MiniShares is on this list of the best ETFs to buy now.

Learn more about GLDM at the SPDR provider site.

iShares 1-3 Year Treasury Bond ETF

• Type: Short-term bond
• Assets under management: $23.9 billion
• SEC yield: 3.9%*
• Expenses: 0.15%

For a while, the Federal Reserve's rate-hike campaign made short-term bonds a sought-after investment.

Though the central bank started cutting at its September meeting, it has since paused efforts to lower the federal funds rate. As such, current yields of nearly 4% should stick for a little while longer.

That might not be get-rich-quick money, but it's enough to keep ahead of headline inflation without the ups and downs of the stock market.

Consider the iShares 1-3 Year Treasury Bond ETF (SHY). This ETF does exactly what its name suggests. It holds a portfolio of U.S. government securities maturing in one to three years.

There are different ways to measure bond risk. The first is credit risk, or the chance that the issuer defaults and can't pay.

Considering the U.S. government controls the printing presses and has the power to tax us all into oblivion, it's safe to say it can pay its debts.

Interest-rate risk is also a factor. When market yields rise, bond prices fall, and not by a small amount. Long-term bonds with maturities of 20 years or more saw worse price declines than the S&P 500 last year.

SHY has no credit risk and, given its short time horizon, very limited interest-rate risk.

At a 3.9% yield, the risk-free return for one of Wall Street's best ETFs to buy isn't too shabby, either.

* SEC yield reflects the interest earned after deducting fund expenses for the most recent 30-day period and is a standard measure for bond and preferred-stock funds.

Learn more about SHY at the iShares provider site.

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