Best ETFs of July 2024
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 4:08 p.m. UTC July 2, 2024
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Editor’s Note: This article contains updated information from a previously published story.
Looking for a more tax-efficient and flexible alternative to mutual funds for an investment portfolio? Consider buying an exchange-traded fund, or ETF. These nifty investment vehicles allow investors to easily access diversified portfolios of equity, fixed income or alternative assets.
To help investors find the best ETFs on the market in 2024, we assessed the U.S. ETF universe with a strict list of criteria that screened for expense ratios, assets under management, trading volume, level of diversification, track record and strategy. This helped us identify long-lived ETFs that possess low fees and strong liquidity.
Robinhood
Best ETFs
- SPDR S&P 500 ETF Trust (SPY).
- iShares Core S&P 500 ETF (IVV).
- Vanguard S&P 500 ETF (VOO).
- Vanguard Total Stock Market ETF (VTI).
- Vanguard FTSE Developed Markets ETF (VEA).
- iShares Core MSCI EAFE ETF (IEFA).
SPDR S&P 500 ETF Trust (SPY)
iShares Core S&P 500 ETF (IVV)
Vanguard S&P 500 ETF (VOO)
Vanguard Total Stock Market ETF (VTI)
Vanguard FTSE Developed Markets ETF (VEA)
iShares Core MSCI EAFE ETF (IEFA)
Compare the best ETFs
| FUND (TICKER) | CATEGORY | EXPENSE RATIO | TOTAL ASSETS |
|---|---|---|---|
SPDR S&P 500 ETF Trust (SPY)
| U.S. Fund Large Blend
| 0.095%
| $547.5 billion
|
iShares Core S&P 500 ETF (IVV)
| U.S. Fund Large Blend
| 0.03%
| $491.8 billion
|
Vanguard S&P 500 ETF (VOO)
| U.S. Fund Large Blend
| 0.03%
| $473.3 billion
|
Vanguard Total Stock Market ETF (VTI)
| U.S. Fund Large Blend
| 0.03%
| $395 billion
|
Vanguard FTSE Developed Markets ETF (VEA)
| US Fund Foreign Large Blend
| 0.06%
| $132.5 billion
|
iShares Core MSCI EAFE ETF (IEFA)
| US Fund Foreign Large Blend
| 0.07%
| $116.7 billion
|
Methodology
Our curated rankings of the top ETFs were created by screening funds for several must-have metrics:
Total assets: All ETFs on this list have accrued minimum assets under management of at least $10 billion.
Expense ratio: Each ETF on this list has a net expense ratio of 0.1% or lower.
Strategy: An ETF must be passively managed by tracking an external benchmark index to qualify for this list.
Track record: Each ETF on this list has at least a 10-year performance history.
Management: All ETFs on this list come from established U.S. asset management firms that have accrued at least $1 trillion in total ETF AUM.
Diversification: All ETFs on this list have a broad-market focus by targeting stocks from both growth and value styles, from more than one market-cap size and most stock market sectors.
Remember that what ultimately constitutes the best ETF for an individual investor’s needs will depend on their circumstances, such as risk tolerance, investment objectives and time horizon.
An experienced ETF analyst selected the funds above, but they may not be right for your portfolio. Before purchasing any of these funds, do plenty of research to ensure they align with your financial goals and risk tolerance.
Why other funds didn’t make the cut
In this ranking, we screened the U.S. ETF universe for funds with traits that demonstrated economy of scale, popularity and consistency. This meant screening for a high level of AUM, daily trading volume, long track record and firm reputation. As a result, all ETFs on this list come from three large well-known managers: Vanguard, BlackRock and SPDR.
Smaller, less liquid, newer ETFs from less well-known managers were not included. That doesn’t mean these ETFs are inferior or unworthy of consideration. Instead, we focused on ETF giants that provide broad-based products suitable for various investors.
Next, we imposed a maximum expense ratio of 0.1% to ensure that all eligible ETFs had low fees. Fees come directly from an ETF’s returns, so keeping these minimal is critical to ensure good long-term investment outcomes.
We also filtered out ETFs that had a narrow focus. ETFs that only targeted growth, small-cap, or energy sector stocks did not make the list. While these ETFs have their uses, our ranking of the best overall ETFs focuses on those with broad diversification across equity styles, market-cap sizes and sectors.
Finally, we excluded actively managed ETFs and factor-based, or “smart beta,” ETFs that combine active and passive investing elements. These ETFs use special rules-based methodologies to target specific factors that are proven to drive equity returns, such as value, low volatility or quality.
We excluded actively managed and factor-based ETFs after reviewing the results of the latest SPIVA Scorecard from the S&P Dow Jones Indices, which measures the performance of actively managed funds worldwide against their index benchmarks.
Final verdict
ETFs are a great way of gaining diversified exposure to various asset classes, often at a low cost and with great liquidity and transparency.
Our pick for the best overall ETF is the SPDR S&P 500 ETF due to a combination of longevity, high AUM, excellent liquidity, low fees and an options chain. These traits make SPY a popular pick for retail or institutional investors looking for short-term trading tools or long-term buy-and-hold picks.
Frequently asked questions (FAQs)
ETFs can be a good investment for beginners. They can offer diversified exposure to a broad range of assets such as stocks, bonds, commodities or even a blend of assets. This can be a great way to combine an investment portfolio with minimal knowledge or research.
ETFs are also easy to purchase and sell as they are traded on major exchanges, just like individual stocks, which makes it easier for beginners to manage their portfolios.
Finally, beginners can start investing with a relatively small amount of money, as the cost of investing in ETFs is simply the price of a single share.
Despite the many advantages of ETFs, there are some drawbacks investors should consider. First, ETFs are subject to expense ratios. This can erode returns over time, whereas individual stocks do not charge such fees.
Some niche ETFs holding exotic assets may not be as liquid and have a greater bid-ask spread, making buying and selling them more challenging and potentially costly. Finally, ETFs may be too diversified for investors looking to make a high-conviction investment in a single stock.
As with any investment, the level of safety in ETFs ultimately depends on the specific assets tracked, with equities being riskier and high-quality fixed-income being less volatile. Generally, ETFs provide diversification, so they can be considered safer than investing in individual stocks.
This is because the value of most ETFs isn’t tied to the performance of a single company, as it is with individual stocks. However, in a market downturn or crash, ETFs can and have lost substantial value due to market risk. To understand the riskiness of an ETF, make sure to scrutinize its strategy, holdings and historical volatility closely.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
