Markets have been anything but predictable lately thanks to inflation pressures, geopolitical tensions and talk of an AI bubble.
In this kind of investing environment, it’s worth considering a “risk off” approach that prioritizes capital preservation over growth — particularly when the S&P 500 logged a -4.6% return for Q1.
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Tactical ETFs stand out as one of the easiest ways to position a portfolio for changing conditions and uncertain times. Whether you’re looking to capitalize on surging energy prices, hedge against volatility or tap into pockets of global growth, the right ETF can provide targeted exposure without the need to pick individual stocks.
The following list highlights the best ETFs to buy now, with a mix of funds designed to provide a less conventional approach to markets. They are all well established, with more than $450 million in assets, and delivered significant gains in Q1 even as markets were melting down. That said, they are not without risks of their own — so investors should perform their due diligence before making any trades.
| Fund | Expense ratio | Assets under management |
| United States Oil Fund LP (ticker: USO) | 0.70% | $2.1 billion |
| State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP) | 0.35% | $3.4 billion |
| First Trust Natural Gas ETF (FCG) | 0.57% | $821 million |
| Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) | 0.59% | $6.6 billion |
| iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) | 0.89% | $561 million |
| State Street SPDR S&P Telecom ETF (XTL) | 0.35% | $458 million |
| iShares MSCI South Korea ETF (EWY) | 0.59% | $16 billion |
United States Oil Fund LP (USO)
USO is the most direct way to play oil in an ETF, as the fund is designed to track the daily price movements of West Texas Intermediate crude oil. Continued disruptions in global oil supplies, prompted by the war in Iran, have driven oil prices from the mid-$50 range in December to more than $100 at present. Those gains don’t show any sign of slowing down, either, as prices just notched their highest level since 2022. There is always a chance that the situation could resolve quickly, but based on recent moves to deploy thousands of U.S. soldiers to the region, there is a real chance the conflict continues well into April and perhaps beyond.
State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP)
Though less direct, XOP has also had quite a year, with gains of about 50% year to date and shares of this top ETF trading at roughly double their 2025 lows. Instead of crude oil, this fund owns some of the most dynamic oil and gas producers in America, including LNG specialist Venture Global Inc. (VG) and mid-cap exploration firm Murphy Oil Corp. (MUR). Returns have been tremendous across Q1, as these focused companies have run up faster than their larger peers with integrated energy operations. Just keep in mind these small, agile companies may also have more downside volatility if oil prices pull back.
First Trust Natural Gas ETF (FCG)
Another twist on the play of rising energy prices is this natural gas ETF, which has gained about 35% year to date in 2025. Its top holdings have material business outside of crude oil, specifically in natural gas. The biggest holdings are major integrated players that also have oil production, including EOG Resources Inc. (EOG), ConocoPhillips (COP) and Occidental Petroleum Corp. (OXY). These top three stocks have a market capitalization of more than $320 billion and represent about 15% of FCG’s portfolio. If you believe all energy prices are rising and want exposure beyond oil, this ETF is a strong choice.
Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC)
Of course, anyone who has gone to the grocery store knows that inflation is not limited to energy commodities. Raw materials across the board are on the rise, thanks to disruptive trade policies and challenges with global supply chains. The Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF holds a bit of everything, from leading energy commodities to agricultural products to metals. As the name implies, it also has no K-1 tax requirement, removing some of the paperwork complications for commodity traders.
[Read: 7 Best Energy ETFs to Buy Now]
iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX)
One unique way to hedge your bets in the current risk environment on Wall Street is to invest in volatility itself. This iPath fund is tied to the CBOE Volatility Index, commonly known as the VIX. It’s a great option to potentially profit from short-term increases in volatility reflected in futures markets. VXX can be a costly long-term holding, and this kind of play on volatility is effectively an investment in a derivative of a derivative. But as a swing trade or an insurance policy against market mayhem, it has been in favor lately, with a run of about 50% since Jan. 1.
State Street SPDR S&P Telecom ETF (XTL)
Though investors have been enamored with high-growth tech trends in recent years, one of the best-performing industries of 2026 has been the sleepy telecom sector. With more than 20% gains year to date in an otherwise down market, XTL stands out as one of the best ETFs to buy now. With a focused list of 40 holdings, the fund includes big telecom leaders like AT&T Inc. (T) as well as midsized network infrastructure company Viavi Solutions Inc. (VIAV). While these companies aren’t likely to deliver two-times revenue or profit growth next year, they do provide stability thanks to long-term contracts and their role as essential service providers in a digital age. It’s no wonder lower-risk investors have flocked to this ETF.
iShares MSCI South Korea ETF (EWY)
While growth is hard to come by in many markets right now, there are almost always geographic regions that succeed even amid global economic headwinds. That region right now is South Korea. With a unique position as a trusted trade partner with both the U.S. and China, it plays an important role in keeping supply chains running. What’s more, the roughly 80 stocks in EWY include multinational names familiar to domestic investors, such as Samsung Electronics Co. Ltd. (005930.HK) and Hyundai Motor Co. (005380.KS). This should provide peace of mind that the fund isn’t reliant on no-name small caps in emerging markets. EWY has more than doubled over the last 12 months, delivering performance that makes it one of the best ETFs to buy now.
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7 Best ETFs to Buy Now originally appeared on usnews.com
Update 04/03/26: This story was published at an earlier date and has been updated with new information.
