Exchange-traded funds (ETFs) offer a diversified and efficient way to grow your portfolio, and choosing the right ETFs can significantly boost your portfolio’s performance.
We’ve rounded up five of the best-performing ETFs this year to help you build your portfolio. Whether you’re looking for growth, income or stability, these ETFs are well-positioned to meet various investment goals.
Below are the five best-performing equity exchange-traded funds (ETFs) ordered by year-to-date (YTD) performance for 2024, with expense ratios of 0.25% or below, at least 3 million average daily share volume and at least $50 billion assets under management (AUM). No leveraged or inverse ETFs are included.
| ETF name and ticker | ETF description | Expense ratio | Dividend yield | YTD return |
|---|---|---|---|---|
| Financial Select Sector SPDR Fund (XLF) | The Financial Select Sector SPDR Fund (XLF) tracks the performance of the Financial Select Sector Index, providing exposure to a wide range of financial companies in the S&P 500, including banks, insurance firms, and investment companies. | 0.09% | 1.34% | 34.54% |
| Communication Services Select Sector SPDR Fund (XLC) | The Communication Services Select Sector SPDR Fund (XLC) tracks the performance of the Communication Services Select Sector Index, providing exposure to leading companies in the communication services sector, including media, entertainment, and telecommunication firms within the S&P 500. | 0.09% | 0.91% | 33.35% |
| Schwab US Large-Cap Growth ETF (SCHG) | The Schwab US Large-Cap Growth ETF (SCHG) tracks the performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index, providing exposure to large-cap U.S. companies with strong growth potential. | 0.04% | 1.30% | 30.96% |
| Utilities Select Sector SPDR Fund (XLU) | The Utilities Select Sector SPDR Fund (XLU) tracks the performance of the Utilities Select Sector Index, providing exposure to utility companies in the S&P 500, including electric, gas, and water service providers. | 0.09% | 2.83% | 29.16% |
| SPDR Gold MiniShares Trust (GLDM) | The SPDR Gold MiniShares Trust (GLDM) tracks the performance of the price of gold bullion, providing investors with a cost-effective and convenient way to gain exposure to gold as a store of value or hedge against inflation. | 0.09% | 0.67% | 17.91% |
*Market data from etfdb.com and accurate as of November 20, 2024.
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Thousands of ETFs are available to choose from, so you’ll need to consider a wide range of factors when deciding where to invest your money. These include:
High fees can make a big dent in your overall investment returns. There are two main costs involved when investing in listed funds: brokerage and management fees.
To find the trading platform that offers the lowest fees, you’ll first need to decide how much you want to invest and how many lump sums you’ll be investing over a year. If it’s just a single lump sum, finding a platform that doesn’t charge an inactivity fee will be key. If you plan on frequently buying small amounts, the brokerage fee itself will be more important.
Before deciding whether ETFs are the best investment solution for you, make sure you’re fully aware of how they work and have an in-depth understanding of all the risks involved. These include:
What Matt thinks about investing in ETFs
ETF investing is a no-brainer if you're a beginner investor who's unfamiliar with the markets or you just don't have the time or interest to pick and choose individual stocks. If you want to do no research, total stock market ETFs are available. If you're keen to invest in the Oil and Gas industry, consider an energy sector ETF. You've got plenty of options for low-cost ETFs to help you build the foundation of your portfolio.
— Matt Miczulski, Editor, Investments.
Basic details about a fund can be found in its prospectus, which (in most cases) must be filed with the US Securities and Exchange Commission (SEC) before an ETF can be publicly traded. The prospectus breaks down key information about a fund including:
View all public filings related to ETFs and other regulated US securities on the SEC website. You can also access an ETF’s prospectus by visiting the issuing company’s website.
As of June 2024, the best ETF to buy based on YTD returns is the Technology Select Sector SPDR Fund (XLK).
One of the best ETFs for beginners is an S&P 500 like the the Vanguard S&P 500 ETF (VOO).
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