With the S&P 500 and the Nasdaq both starting March at fresh all-time highs, it’s safe to say that the bull market has proven resilient into the early months of 2024.
While geopolitical unrest in Gaza and Ukraine continues to provide risks and a harsh economic slowdown in China has created some headwinds, the bottom line is that U.S. stocks continue to push higher — particularly tech-related stocks. And from a market-wide perspective, the fundamentals look strong regardless of sector as analysis firm FactSet reports that 73% of S&P 500 companies reported a positive earnings surprise during the fourth-quarter reporting season.
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If you’re interested in cashing in on this short-term momentum right now, here are seven of the best ETFs to buy based on the themes that have been working since Jan. 1:
| ETF | Assets Under Management | Expense Ratio |
| Invesco QQQ Trust (ticker: QQQ) | $240 billion | 0.2% |
| Vanguard Information Technology ETF (VGT) | $71.7 billion | 0.1% |
| Invesco AI and Next Gen Software ETF (IGPT) | $254 million | 0.6% |
| MicroSectors FANG+ Index 3X Leveraged ETN (FNGU) | $3.3 billion | 0.95% |
| Vanguard U.S. Quality Factor ETF (VFQY) | $292 million | 0.13% |
| WisdomTree Japan Hedged Equity Fund (DXJ) | $4.5 billion | 0.48% |
| iShares Core US Aggregate Bond ETF (AGG) | $101 billion | 0.03% |
Invesco QQQ Trust (QQQ)
— Expense ratio: 0.2%, or $20 annually on $10,000 invested
— Assets under management: $240 billion
On March 1, the Nasdaq eclipsed its prior high set in November 2021. If you want to join in the rally, the popular QQQ fund is a way to do that. Though it may not be intuitive from the name, the fund is benchmarked to the 100 largest companies listed on the Nasdaq exchange. Technology firms
represent more than half of total assets, led by familiar companies like Apple Inc. (AAPL) and Microsoft Corp. (MSFT). If you want to play the general uptrend in the market, this fund gives you Nasdaq-focused exposure in one simple and effective holding.
Vanguard Information Technology ETF (VGT)
— Expense ratio: 0.1%, or $10 annually on $10,000 invested
— Assets under management: $72 billion
Keeping with the tech sector, this Vanguard fund is one of the most popular sector-based ETFs
out there. It, too, is pushing new highs with a 12-month return of more than 40%, while the S&P 500 is up about 25% in the same period. Roughly 300 tech stocks make up the portfolio, though about 60% of the portfolio is allocated toward the 10 biggest firms in the sector, such as Apple and Microsoft. If you want to go all-in on this sector to ride continued momentum in Silicon Valley, this leading Vanguard fund is one of the most popular ways to do so.
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Invesco AI and Next Gen Software ETF (IGPT)
— Expense ratio: 0.6%, or $60 annually on $10,000 invested
— Assets under management: $254 million
Sticking with tech, part of the reason that the sector has been on a tear lately is all the potential profits that Wall Street is expecting to be generated by artificial intelligence solutions in the years ahead. IGPT is an ETF focused solely on this silver of the tech sector, with 60-some stocks including leading chipmaker Nvidia Corp. (NVDA) and Facebook parent Meta Platforms Inc. (META) along with lesser-known software firms dabbling in AI and machine learning. Whether the technology lives up to all the current hype remains an open question, but if you’re looking to play the short-term momentum based on this favorable sentiment, then this Invesco fund is worth a look.
MicroSectors FANG+ Index 3X Leveraged ETN (FNGU)
— Expense ratio: 0.95%, or $95 annually on $10,000 invested
— Assets under management: $3.3 billion
First things first: This MicroSectors fund is not for the faint of heart, and is one of the most aggressive options out there. To begin with, it offers leveraged exposure
that looks to deliver three times returns on an investing strategy. That means good things when the market is booming, but it also means things can be three times as bad if the market heads south. Furthermore, FNGU isn’t tied to all of Wall Street but rather to a focused list of 10 popular tech stocks including Tesla Inc. (TSLA), Nvidia and the like. These high-octane stocks have been booming lately, driving this ETF up 40% since Jan. 1 alone and a staggering 300% or so in the last 12 months. Past performance is not a guarantee of future returns, of course, but given how much this fund has run lately it may be worth a look by those who are interested in diving headfirst into the momentum leaders of the tech sector — and are not afraid of the risks that come with FNGU’s aggressive structure.
Vanguard U.S. Quality Factor ETF (VFQY)
— Expense ratio: 0.13%, or $13 annually on $10,000 invested
— Assets under management: $292 million
If you’re looking at the go-go tech investments out there and feel a bit of trepidation rather than a desire to pile in, this “quality factor” fund from Vanguard provides a way to screen for companies that are looking a bit better than their peers. Rather than being tied to a fixed index, this more actively managed fund
measures factors such as profits or share performance to separate the leaders from the laggards. Top holdings right now include apparel giant Lululemon Athletica Inc. (LULU) and big-box giant Walmart Inc. (WMT), so you’ll get many familiar names that are found in the typical large-cap funds — just in a slightly different mix because of this ETFs quality-focused methodology.
WisdomTree Japan Hedged Equity Fund (DXJ)
— Expense ratio: 0.48%, or $48 annually on $10,000 invested
— Assets under management: $4.5 billion
Recently noted as one of the top-performing ETFs of 2024
, this WisdomTree fund is one of the most popular ways to invest in the resurgence of Japan’s stock market. The landmark Nikkei 225 index in the nation recently surpassed its prior December 1989 record, and has more than doubled from its pandemic-era lows. With more than 400 components including automotive leader Toyota Motor Corp. (TM) and a strategy that hedges against unfavorable exchange rates between the Japanese yen and U.S. dollar, DXJ is one of the best ETFs to buy into this uptrend right now.
iShares Core US Aggregate Bond ETF (AGG)
— Expense ratio: 0.03%, or $3 annually on $10,000 invested
— Assets under management: $101 billion
Last but not least, it’s worth acknowledging that after two years of continued interest rate increases there has been some settling down in the pace of change. As rates rise, bonds
generally lose principal value as older securities with lower interest rates are naturally less attractive. The stability we’ve seen lately means it could be a good time to allocate more money to these instruments, then. What’s more, if rates do get cut in 2024, then bonds will rise in value as those older bonds are actually worth more, thanks to the larger paydays they offer. This leading iShares fund is a simple and effective way to play the breadth of the corporate and government bond market, with more than 10,000 individual holdings all in one place and a rock-bottom price structure.
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7 Best ETFs to Buy Now originally appeared on usnews.com
Update 03/05/24: This story was published at an earlier date and has been updated with new information.
