Popular ETFs
Compare historical returns across the most popular exchange-traded funds
Index ETFs
Dividend ETFs
Growth ETFs
Bond ETFs
International ETFs
Thematic ETFs
1-Year Performance Comparison
How to Choose an ETF
With thousands of ETFs available, selecting the right one requires evaluating several key factors. The cheapest or most popular ETF is not always the best choice for your specific situation.
Expense Ratio
The annual fee charged as a percentage of assets. For index ETFs, anything above 0.20% is expensive. A 0.50% difference compounds significantly over decades. Vanguard and iShares lead on low costs.
Tracking Error
Measures how closely the ETF follows its benchmark index. Lower is better. Caused by fees, cash drag, and sampling methods. Check the ETF's annual report for tracking difference, not just tracking error.
Liquidity & Spread
Higher daily trading volume means tighter bid-ask spreads, reducing your cost to enter and exit. For large ETFs like SPY or QQQ, spreads are negligible. For niche ETFs, check the spread before buying.
Fund Size (AUM)
Assets Under Management below $50M increases the risk of fund closure or delisting. Larger funds benefit from economies of scale, often reducing fees over time. Stick to established funds for core positions.
ETFs by Category: A Quick Guide
Different ETF categories serve different roles in a portfolio. Understanding what each type does helps you build a balanced allocation.
Index ETFs
Track broad market indices like the S&P 500 (SPY, VOO), Nasdaq 100 (QQQ), or total market (VTI). These form the core of most portfolios. They offer market-rate returns at minimal cost and provide exposure to hundreds or thousands of stocks in a single holding.
Sector ETFs
Focus on specific industries like technology (XLK), healthcare (XLV), or energy (XLE). Useful for tactical overweights when you have conviction on a sector's outlook without needing to pick individual stocks. Higher concentration means higher risk.
Dividend ETFs
Hold companies with consistent or growing dividend payments (SCHD, VYM, DVY). Provide regular income and tend to have lower volatility than growth-focused ETFs. Particularly valuable in retirement portfolios where cash flow matters.
Bond ETFs
Provide fixed-income exposure across government (TLT), corporate (LQD), or aggregate (BND, AGG) bonds. Used for portfolio diversification, income, and reducing overall volatility. Duration matters: longer-duration bond ETFs are more sensitive to interest rate changes.
International ETFs
Invest in developed markets (VEA), emerging markets (EEM), or total international (VXUS). Provide geographic diversification and exposure to different economic cycles. Currency fluctuations add an extra layer of return (or risk).
Thematic ETFs
Target specific themes like semiconductors (SOXX), biotechnology (XBI), or commodities (GLD). Higher expense ratios and narrower focus. Best used as satellite positions (5-15% of portfolio) alongside broad core holdings.
Frequently Asked Questions
What is an ETF and how does it differ from a mutual fund?
An ETF (Exchange-Traded Fund) is a basket of securities that trades on a stock exchange like an individual stock. Unlike mutual funds, ETFs trade throughout the day at market prices, typically have lower expense ratios, are more tax-efficient due to in-kind creation/redemption, and have no minimum investment beyond the share price. Mutual funds only trade once daily at NAV.
How do I choose the right ETF?
Focus on five factors: expense ratio (lower is better, index ETFs charge 0.03-0.20%), tracking error (how closely it follows its benchmark), liquidity (higher daily volume means tighter bid-ask spreads), fund size (AUM over $100M reduces closure risk), and tax efficiency (look for low capital gains distributions). For core holdings, broad index ETFs like VTI or VOO are hard to beat.
What is the difference between SPY and VOO?
Both track the S&P 500 index and deliver nearly identical returns. The key difference is cost: VOO charges 0.03% annually while SPY charges 0.09%. SPY has higher trading volume and tighter spreads, making it preferred by active traders. For long-term buy-and-hold investors, VOO saves money on fees over time.
Are ETFs good for beginners?
ETFs are excellent for beginners because they provide instant diversification, have low minimums (one share), charge low fees, and are simple to buy through any brokerage. A single ETF like VTI gives you exposure to the entire US stock market. Starting with 2-3 broad ETFs (US stocks, international stocks, bonds) creates a diversified portfolio with minimal complexity.