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Why ETFs Deserve a Spot in Your Portfolio
Exchange-traded funds have changed the way ordinary people invest. Instead of picking individual stocks and hoping for the best, you can buy a single ETF and instantly own hundreds of companies. That built-in diversification cuts risk without sacrificing returns.
But not all ETFs are created equal. Some track narrow sectors, others charge fees that eat into your gains, and a few have become go-to choices for both beginners and seasoned investors. Below are seven of the best ETFs to buy right now, chosen for their low costs, strong track records, and smart exposure.
If you’re just starting out, you might also want to check out the best automatic investment apps of 2026 to make buying these ETFs even easier.
1. Vanguard S&P 500 ETF (VOO)
Expense ratio: 0.03% | AUM: $1.2 trillion
VOO is the king of core holdings. It tracks the S&P 500, giving you exposure to 500 of the largest U.S. companies. Over the past 10 years, it has returned roughly 12% annually, and its expense ratio is almost nothing.
If you could own only one ETF for the rest of your life, this would be it. It’s the foundation for any long-term portfolio.
2. iShares Core U.S. Aggregate Bond ETF (AGG)
Expense ratio: 0.03% | Yield: 4.5%
Bonds provide stability when stocks get rocky. AGG covers the entire U.S. investment-grade bond market, including government, corporate, and mortgage-backed bonds.
With interest rates likely to decline over the next few years, bonds could deliver both income and price appreciation. AGG is the simplest way to add ballast to your portfolio.
3. Vanguard Total International Stock ETF (VXUS)
Expense ratio: 0.07% | Number of holdings: 8,400+
Most investors concentrate too heavily on U.S. stocks. VXUS gives you instant exposure to developed and emerging markets outside the U.S. — everything from Nestlé to Tencent.
International stocks have underperformed for a decade, which means they’re cheaper now. Adding VXUS could improve your long-term returns and reduce volatility.
4. Schwab U.S. Dividend Equity ETF (SCHD)
Expense ratio: 0.06% | Dividend yield: 3.5%
If you want income and growth, SCHD is hard to beat. It holds 100 high-quality U.S. companies with a history of paying and increasing dividends. Think Coca-Cola, PepsiCo, and Home Depot.
Over the past five years, SCHD has outperformed the S&P 500 with lower volatility, all while paying a fat dividend. It’s a favorite for retirement accounts.
5. Invesco S&P 500 Equal Weight ETF (RSP)
Expense ratio: 0.20% | Top holding weight: 0.2%
Most S&P 500 ETFs are market-cap weighted, meaning Apple and Microsoft dominate. RSP gives each of the 500 companies the same allocation. This approach tends to outperform when smaller companies lead the market.
Since 2003, RSP has beaten the cap-weighted S&P 500 by about 1% per year. It’s a smart way to avoid overconcentration in a handful of mega-cap stocks.
6. Vanguard Real Estate ETF (VNQ)
Expense ratio: 0.12% | Dividend yield: 4.2%
Real estate offers diversification and inflation protection. VNQ holds hundreds of REITs that own office buildings, apartments, warehouses, and hotels.
REITs are required to pay out most of their income as dividends, so VNQ provides a steady stream of cash. It’s a great complement to stocks and bonds. For a deeper look at how real estate fits into a broader strategy, see 10 best ways to invest $10,000 in 2025.
7. iShares MSCI USA Quality Factor ETF (QUAL)
Expense ratio: 0.15% | Holdings: 125
QUAL selects companies with strong fundamentals: high return on equity, stable earnings growth, and low debt. It’s a “smart beta” fund that has historically beaten the market during downturns.
If you want a core holding that tilts toward quality, QUAL is an excellent choice. It pairs well with VOO or VTI.
How to Build a Portfolio with These ETFs
You don’t need to buy all seven. A simple three-fund portfolio might use VOO (U.S. stocks), VXUS (international stocks), and AGG (bonds). Add SCHD if you want more income, or RSP if you prefer equal weight.
For retirement, consider a higher bond allocation. Younger investors can go heavier on stocks. The key is to keep costs low, reinvest dividends, and stay invested for the long haul.
If you’re wondering how ETFs compare to other assets, you might find the discussion in this B.C. couple’s story helpful.
Why Low Costs Matter More Than You Think
A difference of 0.10% in fees might seem trivial, but over 30 years it can cost you tens of thousands of dollars. All the ETFs listed above have expense ratios under 0.20%, and most are below 0.10%. That’s why they’re among the best ETFs to buy for any long-term investor.
You can buy them commission-free at most brokers. Just set up automatic investments and let time do the heavy lifting.
