7 Best ETFs to Buy Right Now

Updated: 22nd Jan 2022 Written by Sean Graytok
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ETFs can help you get closer to your investing goals — but with thousands of them to choose from, it can be overwhelming on where to start.

Here are the seven best ETFs to buy right now.

Best ETFs to Buy

#1. Invesco QQQ ETF (QQQ)

The Invesco QQQ is an exchange-traded fund that tracks the Nasdaq-100 Index, composed of the 100 largest non-financial companies listed on the Nasdaq.

  • Performance over 1-Year: +8%
  • Expense Ratio: 0.20%
  • Percent Off All-Time High: 10%
  • AUM: $198 billion
  • Number of Holdings: 103

The Nasdaq-100 Index is one of the three most common indices that investors follow. Given the considerable amount of tech stocks in the Nasdaq, it’s outperformed the S&P 500 and Dow Jones Index over the last decade — and it’s not even close.

While there are several Nasdaq ETFs that follow the Nasdaq-100 Index, the market predominantly chose QQQ.

According to Lipper, a financial service and analytics firm, it’s become the #1 Highest Rated growth fund based on total return over the past 15 years.

Additionally, QQQ is the second most traded ETF in the U.S. based on average daily volume.

This might not be a big deal if you’re planning to buy and hold, but the liquidity is there if you need it.

While there are +100 holdings in QQQ, a significant portion consists of mega-cap FAAMG stocks.

Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon.com (AMZN), and Meta (FB) make up around 37% of the ETF.

Each of them has continued to grow after eclipsing the $1 trillion milestone, but most of their gains are behind them.

However, their mix of continued growth potential and stability makes them great options for investors to consider.

QQQ Top Holdings:

  • Apple (AAPL) 12.4%
  • Microsoft (MSFT) 10.6%
  • Alphabet (GOOG, GOOGL) 7.7%
  • Amazon.com (AMZN) 7.5%
  • Tesla (TSLA) 5.1%
  • Meta Platforms (FB) 3.5%
  • Adobe (ADBE) 1.8%
  • Broadcom (AVGO) 1.7%
  • Netflix (NFLX) 1.7%
  • Cisco Systems (CSCO) 1.7%

>> Related: Best Stocks to Buy

#2. Vanguard S&P 500 ETF (VOO)

The Vanguard S&P 500 ETF invests in the S&P 500 Index, representing 500 of the largest U.S companies.

  • Performance over 1-Year: +18%
  • Expense Ratio: 0.10%
  • Percent Off All-Time High: 6%
  • AUM: $268 billion
  • Number of Holdings: 506

The Vanguard 500 ETF is one of the best ways to invest in the market’s most-followed index.

Except for the iShares Core S&P 500 ETF, VOO provides the optimal mix of low fees and high liquidity amongst S&P 500 funds.

However, minor differences in liquidity will be negligible if you’re implementing a buy-and-hold strategy.

VOO provides variable access to all 11 sectors of the economy, from Information Technology (28%) to Health Care (13%), to Real Estate (3%), and Energy (3%).

Given VOO’s market-cap-weighted structure, Big Tech has absorbed a sizable amount of the fund, but far less than their presence in QQQ.

FAAMG accounts for 20% of the Vanguard S&P 500 ETF.

Dollar-cost averaging into the S&P 500 is one of the few tried and true ways to generate wealth over time.

A small percentage of investors can consistently “beat the market” with individual stocks.

VOO is a cost-effective way to outperform nine out of ten active traders and most stocks over a long enough time horizon.

>> Related: Best Leveraged S&P 500 ETFs

VOO Top Holdings:

  • Apple (AAPL) 6.7%
  • Microsoft (MSFT) 6.4%
  • Alphabet (GOOG, GOOGL) 4.3%
  • Amazon.com (AMZN) 3.9%
  • Tesla (TSLA) 2.4%
  • Meta Platforms (FB) 2.0%
  • Nvidia (NVDA) 2.0%
  • Berkshire Hathaway (BRK.B) 1.3%
  • JPMorgan Chase (JPM) 1.2%
  • Home Depot (HD) 1.1%

#3. Invesco Nasdaq Next Gen 100 ETF (QQQJ)

The Invesco Nasdaq Next Gen 100 ETF invests in the 101st to 200th largest companies on the Nasdaq. It is the younger sibling to QQQ.

  • Performance over 1-Year: -10%
  • Expense Ratio: 0.15%
  • Percent Off All-Time High: 18%
  • AUM: $1.1 billion
  • Number of Holdings: 106

QQQJ provides exposure to mid-cap tech stocks that are vying to be included in the Nasdaq-100 Index.

Such an event occurs when a QQQJ holding successfully grows enough to replace one of the current QQQ constituents.

About one out of three Next Gen 100 stocks eventually become a Nasdaq-100 stock, so it’s not uncommon.

QQQJ is far more volatile to the upside and downside than its big brother, QQQ. Here’s a snapshot comparing their performance over the last year:

Best ETFs

QQQJ is a great way to gain exposure to high-growth technology stocks if you’re willing to take on more risk and volatility.

QQQJ Top Holdings:

  • Old Dominion Freight (ODFL) 2.3%
  • Trade Desk (TTD) 2.5%
  • Astrazeneca PLC (AZN) 2.0
  • Zebra Technologies (ZBRA) 1.75%
  • CoStar Group (CSGP) 1.7%
  • ON Semiconductor (ON) 1.7%
  • MongoDB (MDB) 2.0%
  • CDW Corp. (CDW) 1.6%
  • Cerner Corp. (CERN) 1.6%
  • Expedia (EXPE) 1.6%

#4. ARK Innovation ETF (ARKK)

ARKK is an actively managed ETF that invests in “disruptive innovation” relating to DNA technologies, automation, robotics, energy storage, artificial intelligence, and financial technology.

  • Performance over 1-Year: -51%
  • Expense Ratio: 0.75%
  • Percent Off All-Time High: 53%
  • AUM: $13 billion
  • Number of Holdings: 45

The ARK Innovation ETF is the flagship fund offered by Cathie Wood and her team at ARK Invest.

ARKK is actively managed, and therefore its holdings are subject to change daily, but the fund’s intentions remain the same.

ARKK consists of high-growth, mainly unprofitable tech companies that are attempting to disrupt the incumbents.

For example, ARKK’s top-holding Tesla (TSLA) is taking on the automotive industry and revolutionizing the way society thinks about energy.

Teladoc (TDOC) challenges the traditional health care industry by providing medical care through phone and video consults.

Coinbase (COIN) competes against traditional finance and banking, an industry that went without competition for the last 500 years.

ARKK is a bet on the most ambitious areas of innovation changing the way the world works.

ARKK Top Holdings:

  • Tesla (TSLA) 8.7%
  • Roku (ROKU) 6.2%
  • Teladoc (TDOC) 6.0%
  • Zoom Video Communications (ZM) 5.7%
  • Coinbase Global (COIN) 4.9%
  • Unity Software (U) 4.4%
  • Spotify (SPOT) 4.2%
  • Twilio (TWLO) 3.9%
  • Exact Sciences (EXAS) 3.9%
  • UiPath (PATH) 3.7%

>> Related: ARK Space Exploration & Innovation (ARKX)

#5. Grayscale Bitcoin Trust (GBTC)

The Grayscale Bitcoin Trust is in the process of converting into the first Bitcoin Spot ETF.

  • Performance over 1-Year: -25%
  • Expense Ratio: 2.00%
  • Percent Off All-Time High: -52%
  • AUM: $27 billion
  • Number of Holdings: 1

The Grayscale Bitcoin Trust was originally launched in 2014 as a way for investors to gain access to bitcoin in the public market.

It operated as a closed-end fund with lock-up periods for accredited investors.

The Average Joe can buy shares after the lock-up period, but at a premium or discount to net asset value (NAV).

Thanks to regulators, GBTC’s structure prohibits it from precisely tracking the price of bitcoin.

Converting to a spot ETF will fix these tracking errors, and a successful conversion feels more inevitable by the day after the SEC’s approval of a bitcoin futures ETF in October.

While the futures ETF product will bring more institutional and retail capital into bitcoin, the spot version will be far more effective for the individual investor.

Grayscale has a $27 billion head start on other providers that will eventually launch spot products.

Owning GBTC in a tax-advantaged account is another way to benefit from the rise of Bitcoin.

#6. Global X Blockchain ETF (BKCH)

The Global X Blockchain ETF invests in companies positioned to benefit from the increased adoption of blockchain technology, including companies in digital asset mining, blockchain, and digital asset hardware, and blockchain and digital asset integration.

  • Performance over 1-Year: -30%
  • Expense Ratio: 0.50%
  • Percent Off All-Time High: 56%
  • AUM: $100 million
  • Number of Holdings: 26

The Global X Blockchain ETF launched in July 2021 and only has $100 million in assets under management.

However, we believe the bitcoin and mining stocks in BKCH will be some of the best-performing assets over the next five to ten years.

Bitcoin mining companies audit the blockchain and are paid in BTC for their work.

Now that many of the top miners have access to public market capital, they no longer have to sell their earned bitcoin to pay their bills.

They’ve become industrialized hodlers of the best performing asset in history.

The value of their balance sheets grows as the price of bitcoin increases.

It’s number-go-up technology.

BKCH Top Holdings:

  • Coinbase (COIN) 12.4%
  • Riot Blockchain (RIOT) 12.2%
  • Marathon Digital (MARA) 9.7%
  • Northern Data (GR: NB2) 6.7%
  • Hut 8 Mining (HUT) 6.6%
  • Voyager Digital (CN: VOYG) 7.1%
  • Galaxy Digital (CN: GLXY) 5.6%
  • Bitfarms (CN: BITF) 5.0%
  • Hive Blockchain (CN: HIVE) 4.5%
  • Canaan (CAN) 4.2%

#7. Vanguard Total Stock Market Index Fund ETF (VTI)

The Vanguard Total Stock Market Index Fund ETF tracks the performance of the overall stock market.

  • Performance over 1-Year: +10%
  • Expense Ratio: 0.03%
  • Percent Off All-Time High: -7%
  • AUM: $287 billion
  • Number of Holdings: 4115

VTI consists of 4025 large-, mid-, and small-cap equities diversified across growth and value.

You’ll notice it has the same top holdings as the Vanguard S&P 500 ETF, so it might be inefficient to own each of these funds.

However, VTI allocates slightly less to the 10 largest holdings — 24% compared to 29% from VOO.

Additionally, you’ll gain exposure to small- and mid-cap stocks through VTI, but not with VOO.

VTI Top Holdings:

  • Apple (AAPL) 5.5%
  • Microsoft (MSFT) 5.3%
  • Alphabet (GOOG, GOOGL) 3.5%
  • Amazon.com (AMZN) 3.2%
  • Tesla (TSLA) 2.0%
  • Meta Platforms (FB) 1.7%
  • Nvidia (NVDA) 1.7%
  • Berkshire Hathaway (BRK.B) 1.0%
  • JPMorgan Chase (JPM) 1.0%
  • Home Depot (HD) 1.0%

Best ETFs: Frequently Asked Questions

What is the best performing ETF?

The best performing ETF — over a long enough time horizon — will be a fund that tracks the S&P 500, such as the Vanguard S&P 500 ETF. Everyone has different investing goals, but an ETF like VOO or SPY will be sufficient for most investors.

What ETFs are good for beginners?

Broad-based ETFs that track the overall market are good options for beginners, such as QQQ, VTI, VOO, or DIA.

What is the downside of ETFs?

Some downsides to ETFs are high fees and becoming over-diversified. While diversification can lower a portfolio’s risk, too much will limit its return potential.

Are ETFs good for long-term investing?

ETFS are good for long-term investing because their diversification can help preserve wealth. The S&P 500 will be here 50 years from now. You can’t say the same about an individual stock.

Bottom Line: Best ETFs To Buy

The best ETFs ultimately depends on your investing goals and time horizon. Some of the funds mentioned in this article will align with your goals, and others will be horrible additions to your portfolio.

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This article is for informational purposes only. It is not intended to be investment advice. To learn more about how we evaluate individual equities, check out our editorial guidelines and research methodology

Sean Graytok
Sean Graytok

Sean Graytok is our Co-Founder and is a recognized expert in investing, cryptocurrency, and financial management. His work has been cited in leading industry publications, such as InvestorsPlace and Business Insider. Sean is interested in the people and companies who are driving financial innovation.