I’ve been writing about exchange-traded funds (ETFs) for more than a decade, and the annual look-ahead at the best ETFs for this year remains one of my favorite tasks on the calendar. When I say I’m excited to talk about the 24 best ETFs for 2024, I mean it.

It’s partly the clean slate the new year affords. It’s partly re-engaging with products I enjoy talking about. But it’s largely the chance to help people solve a financial puzzle. And what better solution than ETFs, which have increasingly become the codebreaker of choice for Americans looking to put their money to work.

ETFs’ edge over other fund types, thanks to their low fees and extraordinary versatility, has become so obvious that even the “smart money” keeps throwing more weight into these products. According to a survey from financial services data and analytics firm ISS Market Intelligence, when asked about how they would invest client assets if a favored manager was available across all types of vehicles, 57% said they preferred ETFs over open-ended mutual funds and separately managed accounts—a huge jump from 49% just a couple years ago!

As I’ve said before, exchange-traded funds (ETFs) are investing’s Swiss Army knife. And this list of the 24 best ETFs for 2024 exemplifies that. But I’ll be clear: This isn’t a list of 24 ETFs that everyone should go out and buy tomorrow. Instead, it’s a shotgun blast of different tools you should consider putting in your toolbelt—which ones you select will hinge both on your personal investing wants and needs, as well as the factors that ultimately determine 2024’s market path.

Let’s dig in!

Disclaimer: This article does not constitute individualized investment advice. These securities appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Table of Contents

The 24 Best ETFs for 2024

In this list, I’ll talk about three types of ETFs:

Core ETFs: I always like to start with a few core ETFs that, if you don’t already own them, you might want to consider buying at the start of the year—and holding not just for 2024, but a lot longer than that.
Tactical ETFs: These are ETFs selected because they play on any number of trends that experts are expecting to come to the fore in the year ahead.
Defensive ETFs: These are protective ETFs you might not necessarily buy at the beginning of the year, but that you should be aware of in case you need to play portfolio defense.

1. SPDR Portfolio S&P 500 ETF

Type: Core
Style: U.S. large-cap stock
Assets under management: $33.3 billion
Dividend yield: 1.3%
Expense ratio: 0.02%, or 20¢ annually on a $1,000 investment

What is SPLG?

The SPDR Portfolio S&P 500 ETF (SPLG) is an index fund that tracks the S&P 500—a ubiquitous stock-market index that holds the publicly traded stocks of 500 of the largest U.S.-listed companies.

What does SPLG hold?

The SPDR Portfolio S&P 500 ETF holds the 500 companies in the S&P 500 index—a collection of predominantly large-cap companies. That means it offers exposure to all 11 market sectors, but it hardly does so evenly. Technology is the biggest industry weight at nearly 30%, followed by 13% in financials and 12% in health care. The reason for this imbalance? The S&P 500 is a market cap-weighted index, which means the larger the stock, the more influence it has—and tech contains some of the biggest companies in the world, including multitrillion-dollar firms Apple (AAPL) and Microsoft (MSFT).

Just remember: What’s big today might not be big tomorrow. Stock weights always change, and sector weights commonly change over time as the economy evolves.

Why should you consider SPLG?

One of the most recommended core funds is an S&P 500 tracker—any index fund that provides the performance of the S&P 500. That’s in part because the S&P 500 gives you exposure to a diversified list of 500 blue-chip companies, which provides a balance of growth and income potential. But that’s also because, if you’re looking for that kind of large-cap exposure, index funds typically do better than your average human manager. According to S&P Dow Jones Indices data, a majority of large-cap managers have underperformed the S&P 500 every year since 2010.

There are only a handful of S&P 500 ETFs, but combined, they account for more than $1 trillion in assets. The SPDR Portfolio S&P 500 ETF (SPLG) is by far the smallest, at roughly $33 billion in assets. So … why call out the “little” guy as one of the best ETFs for 2024? Well, a good rule of thumb for buying funds is, if all else is equal, buy the cheapest one. And while all S&P 500 trackers boast a low expense ratio, by virtue of an August 2023 fee cut, SPLG’s 2-basis-point fee (a basis point is one one-hundredth of a percentage point) is the cheapest you can find.

“I’m not recommending people make a change,” says Todd Rosenbluth, Head of Research at VettaFi, “but if you’re starting a new position, you might as well save at least 1 basis point.”

Want to learn more about SPLG? Check out State Street Global Advisors’ provider site.

Related: 13 Best Mutual Funds to Buy

2. Distillate U.S. Fundamental Stability & Value ETF

Type: Core
Style: U.S. value stock
Assets under management: $1.8 billion
Dividend yield: 1.2%
Expense ratio: 0.39%, or $3.90 annually on a $1,000 investment

What is DSTL?

The Distillate U.S. Fundamental Stability & Value ETF (DSTL) is a value fund—that is, it holds stocks that are relatively undervalued compared to other stocks. But what sets DSTL apart is how it determines value.

What does DSTL hold?

DSTL builds its portfolio by taking a universe of the 500 largest U.S. companies, then eliminating any stocks deemed expensive by free cash flow/enterprise value, as well as any companies with either high debt, volatile cash flows, or both. The resultant portfolio doesn’t look a thing like traditional value funds, with industrials (20%), technology (20%), and health care (20%) making up the lion’s share of assets.

Most value funds measure value by metrics such as price-to-earnings (P/E), price-to-sales (P/S), and even price-to-book (P/B). But the Distillate ETF focuses on free cash flow (FCF)—whatever profits are left once a company makes operating and capital expenditures needed to maintain the business—divided by enterprise value (EV), a measure of company size that takes market capitalization, then factors in debt owed and cash on hand.

Why this lesser-used metric? Thomas Cole, CEO and co-founder of Distillate Capital, explains that while many accounting measures, including earnings and even revenues, can be “adjusted,” you can’t adjust cash. Cash is just cash.

Why should you consider DSTL?

For one, it works. Distillate’s value ETF came to life in late 2018. Since then, it has beaten the Morningstar Large Value category average by a hefty margin every year except 2022.

Also, DSTL makes for a comfortable defensive position if you’re worried about economic disruption in the year ahead.

“It’s a very consistent approach, thinking that a much better long-term view of whether a business is likely to deliver the expected FCF that Wall Street anticipates is how they’ve delivered cash flows in the past,” Cole says. “And where we’re concerned about the unforeseen, we eliminate highly levered businesses. Whether you have a stable business or not, if you run into a global pandemic and can’t service debt, it hurts shareholders. It’s critical to preserving capital.”

Want to learn more about DSTL? Check out Distillate Capital’s provider site.

Related: 10 Best Fidelity Funds to Buy

3. iShares Core S&P Mid-Cap ETF

Type: Core
Style: U.S. mid-cap stock
Assets under management: $83.6 billion
Dividend yield: 1.3%
Expense ratio: 0.05%, or 50¢ annually on a $1,000 investment

What is IJH?

The iShares Core S&P Mid-Cap ETF (IJH) is a low-cost index fund that tracks a benchmark of midsized U.S.-listed stocks.

What does IJH hold?

Given that this is a mid-cap fund, you’d think IJH would primarily hold mid-cap stocks (generally speaking, stocks between $2 billion and $10 billion in market value). But that’s not quite the case. As of right now, the roughly 400-stock portfolio is about 35% mid-caps and 65% small caps. Industrials (22%) are the biggest chunk, sector-wise, followed by double-digit holdings in financials (16%), consumer discretionary (15%) and tech stocks (9%).

Why should you consider IJH?

IJH is one of the best ETFs for 2024 because it both serves as a core holding and an opportunistic play.

Aniket Ullal, VP, ETF Data and Analytics for CFRA, an investment research company, says that in the long term, “mid-caps have been surprisingly strong performers, and having a mid-cap ETF is a very targeted holding for core portfolios.”

But IJH looks like a compelling value play heading into 2024 as well. “Right now, if you look at P/E for the next 12 months’ worth of earnings, IJH is about 14.4 compared to 19.5 for the S&P 500. So there’s a valuation reason to buy mid-caps,” Ullal says. “And if we get a soft landing, which it seems like we’re potentially headed there, it should benefit mid- and small-cap stocks.”

While there are other inexpensive mid-cap ETFs out there, including some that are heavier in actual mid-cap stocks, Ullal suggests IJH because it acts as a complement to an S&P 500 ETF; that is, IJH tracks the S&P MidCap 400 Index, meaning there’s zero overlap between its portfolio and the stocks in the S&P 500 Index.

Want to learn more about IJH? Check out iShares’ provider site.

4. iShares Core MSCI EAFE ETF

Type: Core
Style: International stock
Assets under management: $115.3 billion
Dividend yield: 3.0%
Expense ratio: 0.07%, or 70¢ annually on a $1,000 investment

What is IEFA?

The iShares Core MSCI EAFE ETF (IEFA) is an index ETF that tracks the MSCI EAFE—an index representing large- and mid-cap companies across “developed markets” (basically, larger countries with more established economies and stock markets). “EAFE” stands for “Europe, Australasia, Far East.” So this is very much an international fund—no U.S. stocks allowed.

What does IEFA hold?

IEFA is a massive portfolio of more than 2,800 stocks across 20-plus developed markets. Japan is by far the best-represented country of the mix, with almost a quarter of assets dedicated to firms headquartered there. The United Kingdom (14%), France (11%), and Switzerland (9%) are also major players here. From an industrial perspective, financials (18%), industrials (18%), consumer discretionary (12%), and health care (12%) hold the most sway.

iShares’ international ETF is also market cap-weighted, which means large caps make up the vast majority of assets (75%), and the fund is dominated at the top by massive multinationals such as Nestle (NSRGY) and Shell (SHEL). This not only provides some stability, but a considerably higher dividend yield than even similar large-cap U.S.-stock ETFs.

Why should you consider IEFA?

For one, there are many great companies located outside the U.S. But also, on the off chance that American stocks do start to underperform, it’s good to have a little geographical diversification—and international ETFs like IEFA fit the bill.

“U.S. equities have outperformed non-U.S. equities for many years in a row, and every year, people like me say this year’s going to be different,” Rosenbluth says. “But having no direct exposure to international stocks is still a risk to a broader portfolio.”

Want to learn more about IEFA? Check out iShares’ provider site.

5. iShares LifePath Target-Date ETFs

Type: Core
Style: Target-date
Assets under management: $52.7 million*
Dividend yield: Varies by fund
Expense ratio: 0.08%-0.11%, or 80¢-$1.10 annually on a $1,000 investment

What are the iShares LifePath Target-Date ETFs?

We’re only counting them as one, but the iShares LifePath Target-Date ETFs are actually a series of funds.

Target-date funds are an all-in-one retirement investment solution that you can theoretically buy at any time, then hold until you retire (or, often, keep holding through retirement). Each target-date fund will be attached to a date the holder is targeting to retire, usually in five-year increments—so, a target-date fund provider will have funds for 2040, 2045, 2050, and so on. For each fund, the manager will own a combination of stock and bond funds, and adjust how much of each they hold over time. These funds typically start aggressively (more stocks than bonds), but the closer the fund gets to the target date, the more conservative the manager gets, buying more bonds and selling more stocks.

iShares’ LifePath series currently has nine target-date funds (2025 through 2065), as well as a retirement ETF that’s meant for people who are very close to or already in retirement.

What do the iShares LifePath Target-Date ETFs hold?

Each LifePath ETF holds more or less the same funds, just in different concentrations. But we’ll use the iShares LifePath Target Date 2045 ETF (ITDE) as an example. It’s currently 88% invested in stocks, and 12% invested in bonds. It does this by holding other iShares ETFs, including the iShares Russell 1000 ETF (IWB, large- and mid-cap U.S. stocks), iShares Core MSCI International Developed Markets ETF (IDEV, developed-market international stocks), iShares 10+ Year Investment Grade Corporate Bond ETF (IGLB, investment-grade corporate debt), among others. Over time, more of its assets will be invested in bond funds, and fewer of its assets will be invested in stock funds.

Why should you consider iShares LifePath Target-Date ETFs?

I know, I know: iShares again? I promise that most of the remaining ETFs come from other providers, but the reason I—and the analysts I’ve talked to—suggest iShares funds is because they offer a fine combination of low price and smart product design.

Anyways, the iShares LifePath Target-Date ETFs, which launched in October 2023, are the only target-date ETFs in existence (for now). All other target-date products are mutual funds, and most people invest in them through 401(k)s and other employer-sponsored retirement plans.

But you can buy LifePath ETFs in any kind of account—even plain ol’ brokerage accounts. That makes them an exceedingly flexible product for investors doing their retirement planning.

“It doesn’t make sense for [investors with advisors] because they don’t want to pay an advisor just to own one ETF,” VettaFi’s Rosenbluth says. “But if you’re doing this on your own and you have a plan in mind, [the iShares target-date ETFs] are good products.”

* Assets listed are across all LifePath ETFs.

Want to learn more about the LifePath target-date ETFs? Check out iShares’ provider site.

6. Vanguard High Dividend Yield ETF

Type: Tactical
Style: U.S. dividend stock
Assets under management: $54.2 billion
Dividend yield: 2.8%
Expense ratio: 0.06%, or 60¢ annually on a $1,000 investment

What is VYM?

The Vanguard High Dividend Yield ETF (VYM) is one of the most popular Vanguard index funds aimed at holding equities that deliver an elevated yield.

What does VYM hold?

Vanguard’s high-yield dividend equity ETF tracks the FTSE High Dividend Yield Index, which is simply a collection of stocks with a history of paying above-average dividends. The index leans pretty strongly toward large caps (75%), though it does have 20% exposure to mid-caps, as well as 5% in small-cap stocks.

Top holdings are littered with Dividend Aristocrats—companies that have increased their annual payouts at least once each year for 25 consecutive years—including Exxon Mobil (XOM), Johnson & Johnson (JNJ), and Procter & Gamble (PG). From a sector perspective, financials (22%) command the most assets, followed by industrials (12%), consumer staples (12%), and health care (12%). The result is a dividend yield that’s more than twice the S&P 500’s.

Why should you consider VYM?

“I think value is more likely to do better on a relative basis in 2024 than it did in 2023, where it significantly underperformed,” Rosenbluth says. “In a falling-interest-rate environment, dividend-paying stocks, which you’ll find within a value strategy or dividend fund, are more likely to be competitive.

“Vanguard High Dividend Yield ETF is defensive, owns higher-yielding stocks, it’s cheap—it’s a great core strategy.”

Want to learn more about VYM? Check out Vanguard’s provider site.

Related: 7 Best Schwab Funds to Buy

7. ALPS Sector Dividend Dogs ETF

Type: Tactical
Style: U.S. dividend stock
Assets under management: $1.2 billion
Dividend yield: 4.1%
Expense ratio: 0.36%, or $3.60 annually on a $1,000 investment

What is SDOG?

The ALPS Sector Dividend Dogs ETF (SDOG) is an index ETF that’s designed to provide equal exposure to some of the largest, highest-yielding stocks in 10 different sectors.

What does SDOG hold?

To understand a “Dogs” ETF, you have to be familiar with the OG “Dogs of the Dow.” The Dogs of the Dow is a super-simple investment strategy wherein, at the start of the year, you buy the 10 highest-yielding Dow Jones Industrial Average stocks. You then hold them all year, then rinse and repeat every year after that. The idea here is that when it comes to extremely large-, high-quality stocks (like those in the Dow), a high dividend yield—which goes up when stock prices go down—is actually an indication that the stock is undervalued. The theory goes that if you buy these undervalued, high-yielding stocks, they’ll revert to the mean (giving you price performance) while also delivering a juicy yield.

ALPS Sector Dividend Dogs is a twist on this theme. With SDOG, the ETF buys the five highest-yielding stocks in 10 of the 11 S&P 500 sectors (real estate is the excluded sector) at equal weights. The fund then rebalances (buys and sells so all the stocks are equally weighted again) every quarter, and reconstitutes (identifies the five highest-yielding stocks again, and buys and sells so the ETF’s holdings reflect any new members).

In other words, at the start of this quarter, holdings such as 3M (MMM), Ford (F), and Cummins (CMI) each started out at 2% weights. They’ve moved since then thanks to stock gains, but come the next rebalancing, they’ll be brought back to 2%. And if at the next reconstitution, they’re not among the five highest yielders in their sector, they’ll be bounced from the portfolio and replaced. In the meanstwhile, every sector starts the quarter at a 10% weight. Industrials have drifted up to closer to 11%, while health care is closer to 9%—but again, that will go back to normal come the next rebalancing.

Why should you consider SDOG?

VettaFi’s Rosenbluth likes SDOG for the same reason he likes VYM: the potential for dividend stocks with plump yields to succeed during a 2024 in which Federal Reserve interest-rate cuts appear likely. And at a 4%-plus dividend, SDOG’s yield is plump indeed.

“[You would buy SDOG with an] expectation that there’s a reversion to the mean; that high yield will come back,” Rosenbluth says. “It’s a good way to get income in a traditional dividend format.”

Want to learn more about SDOG? Check out SS&C ALPS Advisors’ provider site.

8. Global X Artificial Intelligence & Technology ETF

Type: Tactical
Style: Thematic (artificial intelligence)
Assets under management: $1.7 billion
Dividend yield: 0.2%
Expense ratio: 0.68%, or $6.80 annually on a $1,000 investment

What is AIQ?

The Artificial Intelligence & Technology ETF (AIQ) invests in companies that could benefit—in one of several ways—from advances in artificial intelligence (AI) technologies.

What does AIQ hold?

AIQ is an 85-stock portfolio made up of companies that could enjoy additional upside thanks to the evolution of artificial intelligence. And there’s a few ways they’re selected. A company might provide hardware that facilitates the use of AI. It might create and/or sell AI software or services. Or it might even see significant growth from merely incorporating AI into their own products and services.

Just consider some of AIQ’s top holdings. Chipmakers Nvidia (NVDA) and Broadcom (AVGO) produce semiconductors and other products that allow other companies to use AI. International Business Machines (IBM) offers a number of AI solutions, such as its cloud-based Watsonx generative AI and scientific data platform. And then there’s Netflix (NFLX), which uses AI to do everything from creating thumbnails to recommending content.

Unsurprisingly, nearly two-thirds of the fund’s assets are in technology stocks. The only other double-digit sector holdings are communication services (14%) and consumer discretionary (10%).

Why should you consider AIQ?

“People understand AI is going to be a big thing, but we don’t understand its implications, where the best opportunities are, how deflationary it’s going to be to the economy,” Marc Pinto, Head of Americas Equities for Janus Henderson, said in the firm’s 2024 outlook call. “But there’s certainly a sense of FOMO [fear of missing out] when it comes to AI. Investors want to make sure they have exposure to AI. They [all don’t necessarily] know what it means, but they know it’s going to be big.”

If you don’t necessarily know which AI stock is going to break out, it might make more sense to buy a bundle of these largely growth stocks via ETFs. Rosenbluth notes that a lot of funds that invest in AI aren’t necessarily providing direct exposure, however—many are also heavy in robotics and automation. But AIQ is one of the funds he likes from a thematic standpoint.

Want to learn more about AIQ? Check out Global X’s provider site.

9. Robo Global Artificial Intelligence ETF

Type: Tactical
Style: Thematic (artificial intelligence)
Assets under management: $180.0 million
Dividend yield: 0.0%
Expense ratio: 0.68%, or $6.80 annually on a $1,000 investment

What is THNQ?

The Robo Global Artificial Intelligence ETF (THNQ) is another index ETF investing in the AI theme—specifically, it seeks to hold companies enjoying “new market opportunities and potential revenue growth created by the expansive development and application of artificial intelligence.”

What does THNQ hold?

THNQ’s 60-stock portfolio is built with primarily large- and mid-cap stocks that are “shaping the future of AI.” Robo Global views this through a set of primary classifications, made up of 11 total sub-classifications:

Applications + Services (38% of assets currently): business process, e-commerce, consumer, health care, factory automation, consulting services
Infrastructure (60% of assets currently): Semiconductors, network and security, big data/analytics, cloud providers, cognitive computing.

Note: The remaining assets are in cash.

Both AIQ and THNQ have some level of international exposure, though THNQ is more domestic in nature, at about 80% of assets in U.S. companies, versus roughly 70% for AIQ.

Why should you consider THNQ?

VettaFi’s Rosenbluth also identified THNQ, which has a “similar style and approach to fundamental research [as sister fund ROBO], but it’s AI-focused companies as well.”

THNQ’s structured, sophisticated way of parceling out AI exposure makes it one of my favorite funds in the space, and deserving of recognition as not just one of the best ETFs for 2024, but likely for quite a while longer.

Want to learn more about THNQ? Check out Robo Global’s provider site.

Related: 10 Best Dividend Stocks to Buy

10. iShares MSCI USA Quality Factor ETF

Type: Tactical
Style: Factor (Quality)
Assets under management: $42.5 billion
Dividend yield: 1.1%
Expense ratio: 0.15%, or $1.50 annually on a $1,000 investment

What is QUAL?

The iShares MSCI USA Quality Factor ETF (QUAL) is an index ETF that holds stocks whose traits are consistent with the “quality” factor. Broadly speaking, a “factor” is a strategy in which you target stocks based on certain attributes that can generate better performance. Value, momentum, even size are factors. And the quality factor typically emphasizes strong company financials and competitive advantages.

What does QUAL hold?

iShares’ QUAL ETF is a collection of 125 large- and mid-cap U.S. stocks that are deemed to fit within the quality factor because of certain positive fundamentals, including high return on equity (RoE), stable year-over-year earnings growth, and low financial leverage. These traits, iShares says, have “historically driven a significant part of companies’ risk and return.”

At the moment, quality shines brightest on the information technology sector, which is responsible for more than 30% of assets. QUAL holds roughly another 12% each in financials and health care stocks.

If nothing else, QUAL’s holdings certainly pass the eye test. Top weights such as Visa (V), Apple (AAPL), and Microsoft (MSFT) have virtually bulletproof balance sheets and scads of cash, not to mention deeply entrenched businesses that are difficult to disrupt.

Why should you consider QUAL?

“In most environments, quality is the way to go, especially from a risk-adjusted return perspective,” says Antonio (Tony) DeSpirito, Global Chief Investment Officer of Fundamental Equities at BlackRock, the world’s largest asset manager when measured by assets under management. “Good balance sheets protect you in any kind of downturn.”

Specific to the current moment, DeSpirito likes quality for several reasons.

“Quality stocks [previously] traded at a premium, but today, they’re trading at a slight discount to the S&P 500,” he says. “Also, [historically], when the Fed stops hiking, stocks work pretty well, but quality stocks work better than average.”

Want to learn more about QUAL? Check out iShares’ provider site.

11. Vanguard Health Care ETF

Type: Tactical
Style: Sector (Health care)
Assets under management: $17.7 billion
Dividend yield: 1.3%
Expense ratio: 0.10%, or $1.00 annually on a $1,000 investment

What is VHT?

The Vanguard Health Care ETF (VHT) is an inexpensive index ETF providing investors with very broad exposure to the health care sector.

What does VHT hold?

Vanguard’s health care ETF tracks an index of large-, mid-, and small-cap health care stocks. The portfolio’s 400-plus names are most heavily concentrated in pharmaceuticals (29%), but it also dedicates significant assets to biotechnology (19%), health care equipment (19%), managed health care (11%), and life sciences tools and services (11%). With the exception of mega-insurer UnitedHealth Group (UNH), the top 10 holdings are largely made up of major drugmakers and medical device makers, including Eli Lilly (LLY), Merck (MRK), and Thermo Fisher Scientific (TMO).

Why should you consider VHT?

Historically speaking, health care has been something of a Goldilocks sector, offering both high growth potential (medical spending persistently rises over time) as well as defensive characteristics (even when times are rough, people will cut back on many, many expenditures before they stop taking medicine and going to the doctor.

The sector has largely been in decline since 2022, however. But iShares Investment Strategy, Americas, says in its 2024 year-ahead outlook that “a comeback in ‘loveable laggards’ could also play out in sector performance.”

“Health care sector ETF outflows totaled $8.7 billion [in 2023], the sharpest unwind since pre-GFC (Great Financial Crisis),” iShares says. “Under-owned and potentially poised for an earnings upswing, health care exposures, especially medical devices and pharmaceuticals, could reap rewards in a catch-up trade.”

That would put many health care funds among the best sector ETFs to buy for 2024. But I particularly like VHT for its combination of low costs, broad portfolio, and performance versus other low-cost peers.

Want to learn more about VHT? Check out Vanguard’s provider site.

12. Global X MLP & Energy Infrastructure ETF

Type: Tactical
Style: Industry (Energy infrastructure)
Assets under management: $1.1 billion
Dividend yield: 4.9%
Expense ratio: 0.45%, or $4.50 annually on a $1,000 investment

What is MLPX?

The Global X MLP & Energy Infrastructure ETF (MLPX) gives investors exposure to energy infrastructure—pipelines, storage, terminals, and other assets involved in the transportation and holding of oil, gas, and other energy commodities.

What does MLPX hold?

This high-dividend ETF is a bit of an oddball. Because despite its name, it actually tries to minimize how much of its assets are invested in master limited partnerships (MLPs). Instead, it prefers to invest in either general partners (GPs) that own MLPs, as well as other energy infrastructure companies. Why? Well, MLPs are a different type of business structure that comes with its own set of tax rules—and by limiting MLP ownership, MLPX limits fund-level taxes.

Given the relatively limited industry MLPX invests in, the portfolio is understandably tight: just 25 holdings as of this writing. At the moment, Williams Cos. (WMB), Onoek (OKE), and Enbridge (ENB) are tops on that list, at roughly 8%-9% weights each.

Why should you consider MLPX?

CFRA’s Ullal notes that last year was a difficult one for the energy sector, which actually finished 2023 in the red. Weighing the sector down were mega-caps Exxon Mobil (XOM) and Chevron (CVX), which combine to make up nearly 40% of the Energy Select Sector SPDR Fund (XLE).

However, he believes we could see a rebound in energy in 2024—and if so, he says MLP ETFs like MLPX might be the best way to go.

“For investors who want to stay invested in energy but be a little more defensive, focus on yield, anything that holds MLPs seems like a decent option,” says Ullal, who specifically singled out MLPX. “We’ve seen better returns and better performance, and more defensive options, within MLP and energy infrastructure-type funds.”

Want to learn more about MLPX? Check out Global X’s provider site.

13. SPDR Euro Stoxx 50 ETF

Type: Tactical
Style: European stock
Assets under management: $3.5 billion
Dividend yield: 2.4%
Expense ratio: 0.29%, or $2.90 annually on a $1,000 investment

What is FEZ?

The SPDR Euro Stoxx 50 ETF (FEZ) is an index ETF with a tight portfolio of some of Europe’s largest stocks.

What does FEZ hold?

FEZ tracks the Euro Stoxx 50 Index, which holds 50 of the largest, most blue-chip firms from 11 eurozone countries. The weighted average market cap of FEZ’s holdings was nearly $120 billion at last check; or, in other words, its average holding is in mega-cap status. Top positions include mega-caps such as Dutch chip supplier ASML Holding (ASML), French luxury conglomerate LVMH (LVMUY), and German software firm SAP (SAP). These companies are so large that this 50-stock portfolio represents some 60% of the free-float market capitalization of the Euro Stoxx Total Market Index.

From a sector perspective, FEZ is imbalanced—financials (20%), consumer discretionary (19%), industrials (17%), and information technology (16%) combine to make up a whopping 72% of assets. Meanwhile, sectors like materials (4%), utilities (3%), and communication services (2%) have just single-digit exposure, and real estate has no place in this fund.

Why should you consider FEZ?

While I mentioned earlier that broad developed-market exposure makes sense for a core portfolio, it’s worth mentioning that some experts also see potential for European firms specifically in 2024.

“There are opportunities in stocks listed in Europe that have international business and trade at a significant discount to their U.S. peers,” Pinto says. “You’re not making a bet on the eurozone or U.K. economy any more than you’re making a bet on the U.S. economy or [emerging markets].”

FEZ is among the best ETFs for 2024 to leverage those opportunities. And like with IEFA, a focus on big, established developed-market firms yields much higher income than similarly built U.S. funds. FEZ currently yields a little less than twice the S&P 500.

Want to learn more about FEZ? Check out State Street Global Advisors’ provider site.

14. iShares MSCI Emerging Markets ex China ETF

Type: Tactical
Style: Emerging-market stock
Assets under management: $13.0 billion
Dividend yield: 1.8%
Expense ratio: 0.25%, or $2.50 annually on a $1,000 investment

What is EMXC?

The iShares MSCI Emerging Markets ex China ETF (EMXC) is an indexed ETF investing in emerging markets—countries that are in the process of rapid socioeconomic development. Projected growth is typically much higher than developed countries, but so are risks, such as poor corporate governance, volatile political systems, and governmental interference in the markets.

What does EMXC hold?

This particular emerging-market fund is different from many others in that while it holds emerging-market stocks, it explicitly excludes Chinese companies from its portfolio. And it’s a very broad portfolio, too—some 700 large- and mid-cap stocks from EMs on five continents. India (24%), Taiwan (24%), and South Korea (17%) make up the largest geographical concentrations, though exposure also includes Mexico, Malaysia, and the United Arab Emirates, among others.

Why should you consider EMXC?

When it comes to EM exposure, investors traditionally invest in larger, straightforward funds such as the $18 billion iShares MSCI Emerging Markets ETF (EEM) and the $77 billion iShares Core MSCI Emerging Markets ETF (IEMG). So why is something as specific as EMXC among the best ETFs to buy for 2024?

“The problem is: Ever since MSCI added China A-shares to the EM indices, China has been close to 30% of all EM exposure,” Ullal said in late 2023. “That hasn’t always been a problem because China has been a strong market, but over the past year, China has underperformed. EMXC is up 12% this year through Nov. 28, while MCHI [a Chinese-stock ETF] is down 8%. So you’re talking about a 20% swing between EM ex-China and pure China exposure.”

Ullal added that there are other considerations, such as property issues, not to mention geopolitical tensions between the U.S. and China, that might give investors pause about investing in emerging-markets funds with heavy Chinese exposure.

Want to learn more about EMXC? Check out iShares’ provider site.

Related: Best Fidelity Retirement Funds

15. Freedom 100 Emerging Markets ETF

Type: Tactical
Style: Emerging-market stock
Assets under management: $798.7 million
Dividend yield: 2.4%
Expense ratio: 0.49%, or $4.90 annually on a $1,000 investment

What is FRDM?

The Freedom 100 Emerging Markets ETF (FRDM) is one of the most innovative among 2024’s best ETFs to buy. It’s an indexed ETF that holds emerging-market stocks selected based on freedom.

What does FRDM hold?

Funds can be “weighted” by any number of metrics, be it market cap, valuation, dividends, you name it. But FRDM is, as the name suggests, freedom-weighted. The ETF’s tracking index begins with a 24-country selection universe. From there, minimum country-level market-cap requirements must be met. Then, using country-level data from the Cato Institute and Fraser Institute, countries are selected and weighted based on 83 different quantitative variables measuring personal and economic freedoms, such as rule of law, freedom of the press, women’s freedoms and government interference in private markets.

The result looks much, much different from your average EM fund, which tends to not just feature China and India, but be heavily weighted in them. FRDM holds neither—instead, top country weightings include Taiwan at 25%, South Korea at 18%, and Chile at 18%. Top holdings unsurprisingly include the likes of Samsung, Taiwan Semiconductor (TSM), and Sociedad Química y Minera de Chile (SQM).

Why should you consider FRDM?

There’s something to be said about the relative stability that comes from selecting stocks from emerging markets that have fewer of the risks associated with EM investing. “We have always said that freer countries perform more sustainably, recover faster from drawdowns, use their capital and labor more efficiently and have less capital flight,” Perth Tolle, sponsor of the Freedom 100 Emerging Markets ETF, told me in an interview for my 2022 list.

And much like with EMXC, the Freedom 100 is a way to tap into emerging markets without Chinese exposure. That worked plenty well in 2023, with FRDM delivering a 19% total return, versus just 6% for the broad-based EEM.

Just note that, like EMXC, FRDM is a geographically narrow fund, with only about a dozen countries represented.

Want to learn more about FRDM? Check out Freedom ETFs’ provider site.

16. Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF

Type: Tactical
Style: Commodity (Broad basket)
Assets under management: $4.9 billion
Dividend yield: 4.2%
Expense ratio: 0.59%, or $5.90 annually on a $1,000 investment

What is PDBC?

The Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) is an actively managed fund, which means rather than just tracking an index, human managers determine what goes in this fund. In this case, the managers are tasked with providing investors with exposure to various commodities.

What does PDBC hold?

PDBC invests in commodity-linked futures, swaps, and other instruments designed to produce returns linked to a basket of roughly a dozen commodities. The largest weights currently go to Brent crude oil (14%), gasoline (13%), and West Texas Intermediate crude oil (13%), but you also enjoy access to metals such as gold and copper, and agricultural commodities such as soybeans and corn.

Why should you consider PDBC?

Your average investor simply can’t invest in futures contracts on their own, and it’s a safe bet that none of us would want to store oil barrels or soybean bins. So, PDBC represents a realistic, easy way to put commodities in their portfolio.

I’ll also direct your attention to the “No K-1” part of this ETF’s name. Unlike with some other commodity ETFs that deal with futures, investors avoid the oft-dreaded K-1 tax form come tax time.

However, PDBC isn’t perfectly straightforward from a tax perspective. Its dividends are ordinary income, which is taxed at ordinary rates—this differs from most stocks and ETFs, which pay qualified income that’s subject to more favorable long-term capital tax rates. Thus, most tax professionals would advise stashing PDBC in a tax-advantaged account such as an individual retirement account (IRA) or Roth IRA.

Want to learn more about PDBC? Check out Invesco’s provider site.

17. Pimco Active Bond Exchange-Traded Fund

Type: Tactical
Style: Intermediate core-plus bond
Assets under management: $4.2 billion
SEC yield*: 5.3%
Expense ratio: 0.58%, or $5.80 annually on a $1,000 investment

What is BOND?

Pimco Active Bond Exchange-Traded Fund (BOND) is an actively managed bond ETF that typically focuses on higher-quality, intermediate-term debt. However, unlike an indexed bond fund that will simply hold whatever bonds qualify for inclusion in a benchmark index, management will tailor portfolio decisions, taking on greater or lesser risk depending on the market environment.

What does BOND hold?

The ETF’s managers—David Braun, Jerome Schneider, and Daniel Hyman—currently spread their assets across more than 1,150 holdings. The average effective maturity (how long until the bonds mature) is a bit over 8 years. The average effective duration (a measure of risk) is 5.7 years, implying that for every one-percentage-point increase in interest rates, the fund would decline by 5.7%, and vice versa. Lastly, credit quality is extremely high—three-quarters of the portfolio’s bonds are investment-grade, and nearly 69% is A-rated or above. Also note that roughly 20% of the fund’s holdings are considered “not rated,” which doesn’t necessarily mean it’s poor-quality debt; it just means they don’t have ratings from the major credit rating firms.

At the moment, BOND is heavily invested in securitized debt (packaged mortgages and other consumer debt), which makes up a little more than 60% of assets. Investment-grade credit is another 23%, U.S. government bonds are 12%, and remaining assets are sprinkled across high-yield credit, emerging-market bonds, and other debt.

Why should you consider BOND?

Rosenbluth says that, in the current flat (and eventually lower) rate environment, “an actively managed intermediate term product is going to be more relevant.” And BOND, which earns a Silver Medalist rating from Morningstar, fits the bill. “BOND has a long track record, proven management, and has performed well. It’s a great way of getting exposure.”

* SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

Want to learn more about BOND? Check out Pimco’s provider site.

Related: Best Fidelity Funds for an HSA

18. Fidelity Total Bond ETF

Type: Tactical
Style: Intermediate core-plus bond
Assets under management: $7.9 billion
SEC yield: 5.1%
Expense ratio: 0.36%, or $3.60 annually on a $1,000 investment

What is FBND?

The Fidelity Total Bond ETF (FBND) is another actively managed bond fund of the intermediate core-plus persuasion.

What does FBND hold?

Compared to BOND, FBND is a much more balanced portfolio of debt—currently, management has 34% of assets in investment-grade corporates, another 31% in government securities, 30% in securitized debt, and the rest largely in cash. It invests in short-, intermediate-, and long-term bonds in fairly equal measures, though it tilts toward intermediate. Duration of 5.9 years is close to BOND. Credit quality is sky-high, too; 90% of assets are investment-grade, and 60% are AAA-rated.

Why should you consider FBND?

Rosenbluth also gives FBND a nod, noting that it has a penchant for strong returns. Indeed, this Fidelity bond ETF has outperformed its category average in each of the past five years. And Morningstar gives it a Gold Medalist rating—the highest rating Morningstar gives in its forward-looking analysis of a fund’s investment strategy. Those credentials make it worthy of inclusion in our best ETFs for 2024.

Want to learn more about FBND? Check out Fidelity’s provider site.

Related: Best Schwab Retirement Funds

19. iShares 20+ Year Treasury Bond ETF

Type: Tactical
Style: U.S. long government bond
Assets under management: $47.5 billion
SEC yield: 4.4%
Expense ratio: 0.15%, or $1.50 annually on a $1,000 investment

What is TLT?

The iShares 20+ Year Treasury Bond ETF (TLT) is an index bond ETF that invests in long-dated U.S. Treasury bonds.

What does TLT hold?

This iShares ETF is pretty straightforward, holding roughly 40 U.S. Treasury issues of 20 years or more. Current effective maturity is about 26 years, and it has a high duration of nearly 17 years to boot. Credit quality is, of course, outstanding—U.S. debt is among the highest-rated sovereign debt in the world, at AA.

Why should you consider TLT?

“Given where inflation is and that the Fed is potentially talking about not raising rates in the near future, and also given what we’ve seen from talking to clients, there’s more appetite to take on rate risk [in 2024],” says CFRA’s Ullal, who notes that TLT was one of the most traded ETFs in 2023, and that investors kept mis-timing a peak in interest rates. “But it’s hard to time rates—now might be a better time to try, and TLT is one option.”

Want to learn more about TLT? Check out iShares’ provider site.

20. Virtus Private Credit Strategy ETF

Type: Tactical
Style: Private credit
Assets under management: $37.7 million
SEC yield: 10.9%
Expense ratio: 9.72%, or $97.20 annually on a $1,000 investment*

What is VPC?

The Virtus Private Credit Strategy ETF (VPC) is an index ETF that invests in private credit—effectively, non-bank lending that’s not traded on the public markets.

What does VPC hold?

Interestingly, while VPC is a private credit fund, it doesn’t directly invest in private credit. Instead, it provides exposure to private credit by holding business development companies (BDCs) and closed-end funds (CEFs). For the uninitiated, BDCs are specialized firms that provide financing for small and midsized businesses, while CEFs are an alternative to mutual funds and ETFs that have a fixed number of shares, and as a result, can trade at considerable discounts or premiums to their net asset value.

Currently, roughly two-thirds of assets are invested in BDCs such as FS KKR Capital (FSK), Prospect Capital (PSEC), and Goldman Sachs BDC (GSBD), while much of the rest is invested in CEFs such as Oxford Lane Capital (OXLC), Nuveen Credit Strategies Income Fund (JQC), and BlackRock Innovation and Growth Term Trust (BIGZ). Remaining assets are invested in institutional shares of a money market fund.

Why should you consider VPC?

Several investment firms are bullish on the asset class in 2024.

“Asset managers are poised to capture share with private credit strategies as the proposed new bank capital rule (Basel 3 Endgame) could pressure banks’ ability and willingness to hold risk,” say Morgan Stanley strategists in their “Big Debates 2024” report. “In all, we see a $32 trillion total addressable market for alts to potentially take share with private credit/fixed income replacement.”

“When we look at opportunities out there, we are much more focused on strategies that are more idiosyncratic,” adds Jeff Cucanato, Lead Portfolio Manager, BlackRock Multi-Strategy Credit. “Private credit would fit that bill.”

Just take care. Only more experienced, tactical investors should deal in something as opaque as private credit—and that goes double for any fund that gets its exposure indirectly the way VPC does.

* VPC’s expense ratio is high, but also not quite what it seems. The ETF itself charges a 0.75% management fee. The large remaining expense is incurred management fees from the BDCs and CEFs it holds, which are already reflected in those instruments’ performance.

Want to learn more about VPC? Check out Virtus Investment Partners’ provider site.

21. Invesco S&P 500 Low Volatility ETF

Type: Defensive
Style: U.S. low-volatility stock
Assets under management: $7.5 billion
Dividend yield: 2.3%
Expense ratio: 0.25%, or $2.50 annually on a $1,000 investment

What is SPLV?

The Invesco S&P 500 Low Volatility ETF (SPLV) is an index ETF that invests in companies determined to have low volatility.

What does SPLV hold?

The SPLV holds the 100 stocks from the S&P 500 Index that have the lowest realized volatility over the past 12 months. Volatility here, Invesco says, “is a statistical measurement of the magnitude of up and down asset price fluctuations over time.” The less volatile the stock, the greater its weighting every three months, when the fund rebalances.

From a sector perspective, SPLV currently is heavy in exactly the stocks you’d expect it to be—defensive groups like consumer staples (23% of assets), utilities (13%), and health care (11%) loom largest. McDonald’s (MCD), Coca-Cola (KO), and Warren Buffett’s Berkshire Hathaway (BRK.B) are top holdings at a little more than 1% of assets apiece.

Why should you consider SPLV?

Market volatility usually goes hand-in-hand with big drops in stocks. So, naturally, low-volatility stocks are considered a way to hedge against a downward swing in the market. Thus, SPLV could be one of the best ETFs for 2024 … if we get plenty of turbulence throughout the year.

“If you are concerned about market volatility, there’s a couple of routes to go within the equity space—the simple route is, instead of buying the S&P 500, buying low volatility with SPLV,” VettaFi’s Rosenbluth says. He adds a fair warning that’s typically associated with any low-vol product: “You’re likely to outperform in a choppy or down market, but you will underperform in an up market.”

Want to learn more about SPLV? Check out Invesco’s provider site.

Related: Best Schwab Funds for an HSA

22. ProShares Short S&P500

Type: Defensive
Style: Inverse stock
Assets under management: $1.0 billion
Dividend yield: 6.0%
Expense ratio: 0.88%, or $8.80 annually on a $1,000 investment

What is SH?

The ProShares Short S&P500 (SH) is a fund that, very simply put, goes up when the market goes down. More specifically, it provides the inverse daily return of the S&P 500, which means if the S&P 500 declines by 1% on Monday, SH will gain 1% (minus expenses, of course).

What does SH hold?

This is the most complicated portfolio of any fund on this list. SH primarily holds a number of futures, swaps, and Treasury bills to replicate the inverse-S&P 500 performance it’s looking for. While the average investor should always “look under the hood” in any ETF they buy, in this case, doing so will be more confusing than educational.

Why should you consider SH?

“Always have an escape plan.” It’s a sentimental line delivered by Desmond Llewellyn’s Q during his farewell in The World Is Not Enough … and it’s darn fine advice for any tactical investor. Thing is, while one of the best ways to avoid deep losses in stocks is to not own stocks, if you’re reading this, you probably don’t want to sell your stocks. For one, you would lose any attractive “yields on cost” (the actual dividend yield you receive from your initial cost basis) on stocks you’ve owned for a while. And if you time the market wrong, you could miss the rebound.

One alternative? Hedge the market by buying shares of SH if you think the market is in for pain. If you’re right, you can offset some of the losses that your long holdings might incur during a down market—like many investors were rewarded for doing in February 2020 when it became apparent that COVID-19 was going to hit the U.S.

SH has its own risks. For one, that inverse exposure is only on a daily basis—over a long period of time, it’s not a perfect 1-for-1 relationship. The fund could, for instance, go up 8% across a year in which the S&P 500 declines 10%. And naturally, if your stocks go up, your portfolio’s gains won’t be as great as they would’ve been.

But it’s a better risk than jettisoning your stocks. And it’s a more manageable hedge than inverse leveraged ETFs. Still, only tactical investors with high risk tolerance should consider this ETF.

Want to learn more about SH? Check out ProShares’ provider site.

23. Global X Nasdaq 100 Covered Call ETF

Type: Defensive
Style: Covered call
Assets under management: $8.1 billion
Dividend yield: 11.1%
Expense ratio: 0.61%, or $6.10 annually on a $1,000 investment

What is QYLD?

The Global X Nasdaq 100 Covered Call ETF (QYLD) is an index ETF that generates income by selling covered calls—an income-generating options strategy in which an investor sells call options on a stock or fund while owning an equivalent amount of shares of that stock or fund. In QYLD’s case, the strategy centers around the Nasdaq-100 Index, which is made up of the 100 largest non-financial companies listed on the Nasdaq Stock Exchange.

What does QYLD hold?

This Global X fund holds the 101 stocks (remember: Alphabet is represented by two stocks) of the Nasdaq-100. Then every month, it sells one-month, at-the-money call options on the Nasdaq-100. These options are held until one day before the expiration date, then they’re liquidated at a volume-weighted average price, which is determined at the close.

Why should you consider QYLD?

In short, when you sell covered calls, you receive a premium for selling the call options. If the underlying asset’s price rises above the call price at some point before the option expires, you’ll likely be assigned, and your shares will be called away. If the price remains below the call price, the option will expire worthless. Either way, you keep the premium. The ultimate effect of this strategy is that you constantly generate income while protecting against downside in the assets you hold, though you limit the amount of upside you can enjoy.

Hence, QYLD is one of the best ETFs for 2024 if you need defense. But you shouldn’t necessarily buy and hold it from the start of the year.

“Covered call ETFs like QYLD protect against some downside,” Rosenbluth says, “and with bond yields falling, income could become more meaningful.”

Want to learn more about QYLD? Check out Global X’s provider site.

24. Innovator Equity Defined Protection ETF

Type: Defensive
Style: Defined protection
Assets under management: $234.2 million
Dividend yield: N/A
Expense ratio: 0.79%, or $7.90 annually on a $1,000 investment

What is TJUL?

The Innovator Equity Defined Protection ETF July 2025 Series (TJUL) is designed to provide the upside of the SPDR S&P 500 ETF Trust (SPY) up to a 16.6% predetermined cap, while buffering 100% of losses during a two-year period starting on July 17, 2023.

What does TJUL hold?

TJUL’s holding list is a complex array of equities, options contracts, and Treasury bills designed to create the performance and downside buffer the fund is aiming for. Much like with SH, knowing what’s “under the hood” won’t help you understand TJUL any better.

Why should you consider TJUL?

“One interesting ETF worth considering is the new 100% downside protection TJUL,” CFRA’s Ullal says. “It falls into the buffered fund/protection category, but it’s 100% downside protection.”

The reason that stands out is because most buffered funds offer some level of protection—other Innovation buffer funds, for instance, offer 9%, 15%, and 30% buffering—but TJUL is designed to be a fully protective shield.

It’s designed to be that way, but investors should note that how much downside protection they can enjoy is partly determined by when they invest in the fund. That’s because the buffer protection starts from July 2023—and as you’re reading this, it’s decidedly not July 2023. As I write this, though, there’s an extremely high 94% remaining buffer.

The flip side, of course, is that any money you put here can’t provide any more upside above 9.6% (the predetermined cap) until July 2025, and there’s no guarantee you’ll even get that much. So any money locked into TJUL could only produce moderate gains at best. Also, given that this is the first product to promise a 100% downside buffer, at least a little wariness is warranted given the lack of track record.

Still, if you’re looking for a source of protection in 2024—especially in the early innings—TJUL is one of the most promising products.

(Editor’s Note: Innovator has since launched multiple new Equity Defined Protection ETFs. The most recent launch was AAPR, which started the protection clock on April 1, 2024. As of this writing, it has 100% of its remaining buffer and a remaining cap of 18%. This article was originally published before the launch of AAPR and its sister funds. Now that AAPR has launched, investors might be better off gaining the fuller protection of AAPR. In the same vein, if Innovator continues to launch these products, your best bet is likely going to be whichever fund has the highest remaining buffer and cap.)

Want to learn more about TJUL? Check out Innovator’s provider site.

The 24 Best ETFs to Buy for a Prosperous 2024