There are over 3,000 ETFs available to buy right now. The dirty secret of the investment industry is that you probably only need 2 or 3 of them. Maybe 5 if you want to get fancy. The rest exist to generate fees for the companies that sell them.
So let’s skip the noise. Here are the ETFs that actually make sense, why they work, and how to combine them into a portfolio that doesn’t require a PhD to manage.
What Is an ETF (30-Second Version)
An ETF is a bundle of stocks packaged into a single investment you can buy like any stock. Instead of picking between Apple, Microsoft, Amazon, and 497 other companies, you buy one ETF and own all of them. Instant diversification. One click. Done.
The key advantage: if one company in the bundle tanks, it barely dents your investment because it’s spread across hundreds of stocks. Browse all the individual stocks that go into these ETFs on our stock directory.
The 6 Best ETFs to Buy Right Now
1. Vanguard S&P 500 ETF (VOO) — The Only ETF You Really Need
VOO tracks the S&P 500 — the 500 largest US companies. It’s returned roughly 10% annually over the long term. The expense ratio is 0.03%, which means you pay $3 per year for every $10,000 invested. That’s nothing. Warren Buffett has literally instructed his estate to put 90% of his wife’s inheritance into an S&P 500 index fund. If it’s good enough for the greatest investor alive, it’s good enough for us.
- Expense ratio: 0.03%
- Best for: Everyone. Literally everyone. This should be the core of most portfolios.
- One drawback: US-only. No international exposure.
2. Invesco QQQ Trust (QQQ) — For the Tech Believers
QQQ tracks the Nasdaq-100, which is heavily weighted toward technology. Think NVIDIA, Apple, Microsoft, Meta, Amazon. If you think tech and AI will keep driving the market (I do), QQQ gives you concentrated exposure. It’s outperformed VOO over the last decade by a wide margin. The flip side? It drops harder during selloffs. In 2022, QQQ fell about 33% while VOO fell about 19%.
- Expense ratio: 0.20%
- Best for: Growth-oriented investors with a 5+ year horizon
- One drawback: Very tech-heavy. When tech sells off, this gets hit hard.
3. Schwab U.S. Dividend Equity ETF (SCHD) — The Income Machine
SCHD focuses on companies with strong dividend track records. It holds names like Coca-Cola, PepsiCo, AbbVie, and Home Depot. The yield sits around 3.5%, which might not sound exciting until you run the math on reinvested dividends over 20 years. Plug your numbers into our dividend calculator — the compounding effect is genuinely surprising.
- Expense ratio: 0.06%
- Best for: Income seekers, pre-retirees, anyone who wants cash flow
- One drawback: Lower growth potential than VOO or QQQ
4. Vanguard Total International Stock ETF (VXUS) — The Rest of the World
Here’s the thing about only owning US stocks: the US is 4% of the world’s population. International stocks don’t always move in sync with US markets, which is exactly the point. VXUS gives you exposure to Europe, Asia, and emerging markets in one purchase. The US has dominated for the last decade, but that wasn’t always the case. International stocks outperformed the US in the 2000s. Having some VXUS is insurance against the US hitting a rough patch.
- Expense ratio: 0.07%
- Best for: Anyone wanting true global diversification
- One drawback: Has lagged US stocks for years. Patience required.
5. Vanguard Total Bond Market ETF (BND) — The Stabilizer
Stocks go down 20-30% sometimes. That’s normal but it feels terrible when you’re living through it. BND holds US government and corporate bonds, providing ballast when stocks tank. A portfolio with 80% stocks and 20% BND will have noticeably smoother returns than 100% stocks, at the cost of slightly lower long-term gains. For many people, that tradeoff is absolutely worth it. Take our risk quiz to figure out how much bond allocation makes sense for you.
- Expense ratio: 0.03%
- Best for: Conservative investors, people near retirement, anyone who can’t handle big drops
- One drawback: Low returns. You’re trading growth for stability.
6. iShares Core S&P Mid-Cap ETF (IJH) — The Hidden Gem
Most beginners focus on large caps and ignore mid-caps entirely. That’s a mistake. Mid-cap companies ($2B-$10B market cap) have historically outperformed both large caps and small caps over long periods. They’re big enough to survive downturns but small enough to grow aggressively. IJH gives you 400 mid-cap stocks that add a growth boost to a portfolio otherwise dominated by mega caps.
- Expense ratio: 0.05%
- Best for: Long-term investors looking to juice returns slightly
- One drawback: More volatile than large-cap ETFs
3 Simple ETF Portfolios You Can Build Today
Don’t overthink this. Pick one of these based on your personality:
The “I Don’t Want to Think About It” Portfolio
100% VOO. Seriously. That’s it. You’ll beat most professional fund managers over 20 years. Add money every month and don’t touch it.
The Balanced Portfolio
60% VOO + 25% VXUS + 15% BND. Global exposure, some bond stability, dead simple. Rebalance once a year.
The Growth Portfolio
40% VOO + 25% QQQ + 15% SCHD + 10% VXUS + 10% IJH. More aggressive, tilted toward tech and growth, but still diversified. Use our investment calculator to project long-term returns.
What to Look for When Picking an ETF
- Expense ratio under 0.20%. Anything higher is a ripoff for a basic index ETF. Every ETF on this list is under 0.20%.
- Assets over $1 billion. Bigger ETFs are easier to trade and less likely to shut down.
- Track record of 5+ years. Brand new ETFs haven’t proven anything yet.
- What it actually holds. Some “dividend ETFs” are full of junk stocks with unsustainably high yields. Always check what’s inside.
Frequently Asked Questions
Are ETFs safer than individual stocks?
Generally yes, because you own hundreds of stocks instead of one. A single company can go bankrupt and lose 100% of its value. A broad ETF like VOO can’t go to zero unless every major US company fails simultaneously. That said, ETFs still go down during market crashes — they’re just less risky than individual names.
Should I buy ETFs or pick my own stocks?
Why not both? Use ETFs as your foundation (60-80% of portfolio), then add individual stocks you’ve researched for the remaining 20-40%. Browse our stock directory when you’re ready to pick individual names.
How much money do I need to buy an ETF?
The price of one share — VOO is around $500, QQQ around $520. But most brokers now offer fractional shares, so you can start with literally $1. The amount doesn’t matter nearly as much as the consistency. $100 every month for 30 years beats $10,000 once and never again.
Do ETFs pay dividends?
Most do. VOO pays around 1.3%, SCHD around 3.5%. You can reinvest those dividends automatically (called DRIP) to buy more shares, which compounds over time. See the difference reinvesting makes with our dividend calculator.
How many ETFs should I own?
Two to five is the sweet spot. One US stock ETF, one international, maybe one bond ETF, and optionally a specialty pick like SCHD or QQQ. More than 7-8 ETFs and you’re just creating complexity without adding real diversification.