Best ETFs to Invest in for 2026
Last updated June 2026
Short answer
There is no single best ETF for 2026; the right one depends on your goal. For a broad-market core, VOO, VTI, SPY, and IVV hold the large-cap US market at around 0.03% a year. For a growth tilt, QQQ, VGT, XLK, and SCHG lean into technology. For income, SCHD, VYM, and JEPI emphasize dividends. For semiconductors and AI, SMH and SOXX concentrate the chip sector. For targeted sector bets, XLY, XLI, and ITA cover consumer, industrial, and defense exposure. The usual approach is to pick one core fund, then layer a few satellites that match what you want. Walnut is not an investment adviser.
“Best ETF” lists usually crown one fund, but that is the wrong question. The better way to choose an ETF is by the job you want it to do: anchor a portfolio, tilt toward growth, generate income, or bet on a single sector like semiconductors. This guide groups the most widely held ETFs by goal, describes each on what it holds, its expense ratio, and who tends to use it, and then shows how a few of them combine into a portfolio. It is descriptive, not a set of buy calls.
How to choose an ETF: start with the goal, not the ticker
The cheapest way to pick wrong is to chase a “top ETF” without knowing what role it plays. ETFs are tools, and they do very different jobs. A broad-market fund like VOO is a diversified core: one purchase, the whole large-cap US market, near-zero cost. A sector fund like SMH is a concentrated satellite: one industry, far more volatility, sized small around the core. Income funds like SCHD trade some growth for yield. Once you know which job you are hiring an ETF to do, the field narrows fast, and the question shifts from “which is best” to “which fits this slot in my portfolio”.
That is why the rest of this page is organized by goal. Each ETF below is described the same way, so you can scan across them: the category it sits in, roughly how cheap it is, what it holds, and who tends to use it. Expense ratios are stamped to early 2026 and kept qualitative; verify the current figure on each issuer's site before you act.
What makes an ETF a good core holding?
A good core holding is broadly diversified, very low cost, and built to track the overall market rather than a single idea. That is exactly what the S&P 500 and total-market funds do. VOO, IVV, and SPY each hold the roughly 500 largest US companies; VTI goes wider and holds the entire US market, around 4,000 stocks. Because they are cap-weighted index funds, they behave like the market itself rather than like a bet, and at around 0.03% a year (VOO, VTI, IVV) the fee is almost nothing.
The distinction that matters is core versus satellite. The core is the diversified foundation you build everything else around. Sector and thematic ETFs (QQQ, VGT, SMH, XLY) are satellites: more concentrated, more volatile, layered on top to express a specific view. Most simple portfolios are one core plus a small number of satellites, not a dozen overlapping funds.
What are the best ETFs by goal for 2026?
Below the field is grouped into five goals: broad-market core, growth and technology, dividend and income, semiconductors and AI, and sector tilts. Each ETF is described on the same fields. Where Walnut publishes a dedicated page for the fund, the ticker links to it; a few funds (IVV, SCHG, JEPI) are named without a link because there is no page yet.
Broad-market core ETFs (VOO, VTI, SPY, IVV)
These are the funds most long-term investors build a portfolio around: one ticker, the whole large-cap US market or close to it, at a rock-bottom cost. They are diversified core holdings rather than bets on any single idea.
VOO — Vanguard S&P 500 ETF
VOO holds the roughly 500 largest US companies weighted by market cap, so a single ticker captures the broad large-cap market. Its 0.03% expense ratio is among the lowest of any equity fund, and its exposure is effectively identical to SPY and IVV. It is widely held as a textbook core building block that the rest of a portfolio gets constructed around.
- Category: Broad-market core.
- Expense ratio: Very low (~0.03%).
- Who tends to use it: A cheap, diversified S&P 500 core.
VTI — Vanguard Total Stock Market ETF
VTI holds roughly 4,000 US stocks across large, mid, and small caps at the same 0.03% expense ratio as VOO. The top of the fund mirrors the S&P 500 because cap-weighting dominates, but VTI adds the mid- and small-cap tail that VOO leaves out. People use it when they want total-market breadth in a single ticker without choosing between caps.
- Category: Broad-market core.
- Expense ratio: Very low (~0.03%).
- Who tends to use it: One-fund exposure to the whole US market.
SPY — SPDR S&P 500 ETF Trust
SPY is the original US-listed ETF and tracks the same S&P 500 large-caps as VOO and IVV. It charges more (around 0.0945%) because of its unit-investment-trust structure, but it has by far the deepest options market and tightest spreads of any ETF. It is favored by active traders and hedgers rather than buy-and-hold cost minimizers.
- Category: Broad-market core.
- Expense ratio: Low (~0.0945%).
- Who tends to use it: Traders and options strategies.
IVV — iShares Core S&P 500 ETF
IVV is BlackRock's S&P 500 fund and is functionally interchangeable with VOO: same index, same 0.03% expense ratio, nearly identical performance before tiny tracking differences. The choice between IVV and VOO usually comes down to which provider's ecosystem you already use. (Walnut does not yet publish a dedicated IVV page; its VOO page covers the shared S&P 500 exposure.)
- Category: Broad-market core.
- Expense ratio: Very low (~0.03%).
- Who tends to use it: An S&P 500 core in the iShares ecosystem.
Growth and technology ETFs (QQQ, VGT, XLK, SCHG)
These funds lean harder into technology and growth than a broad-market core does. They are concentrated tilts, more volatile than the market, and most people hold them as satellites layered on top of a diversified core rather than as the core itself.
QQQ — Invesco QQQ Trust
QQQ tracks the Nasdaq-100, the 100 largest non-financial Nasdaq companies, heavily tilted toward technology and consumer growth names like Microsoft, Apple, NVIDIA, and Amazon. Unlike a sector fund, it keeps Amazon, Meta, and Alphabet, which makes it the most common one-ticker proxy for big-tech beta. QQQM is the cheaper Invesco sibling (around 0.15%) for buy-and-hold; QQQ keeps the deeper options market.
- Category: Growth / tech.
- Expense ratio: Moderate (~0.20%).
- Who tends to use it: Big-tech and Nasdaq-100 growth exposure.
VGT — Vanguard Information Technology ETF
VGT holds roughly 300 technology-classified names at the cheapest expense ratio in the sector category. Because it follows GICS classification strictly, it excludes Amazon, Alphabet, and Meta, so it is pure tech rather than broad mega-cap growth. Microsoft, Apple, and NVIDIA dominate the top of the fund, which makes it both a broad tech tilt and a heavy bet on a few names.
- Category: Growth / tech.
- Expense ratio: Low (~0.09%).
- Who tends to use it: Broad, cheap pure-tech exposure.
XLK — Technology Select Sector SPDR Fund
XLK tracks the S&P 500 technology sector, roughly 70 large-cap names, so its universe is narrower than VGT and its top three (Microsoft, NVIDIA, Apple) routinely run above 40% combined. Like VGT it excludes Amazon, Alphabet, and Meta under GICS. People reach for it when they want the most concentrated large-cap tech tilt at a low cost.
- Category: Growth / tech.
- Expense ratio: Low (~0.09%).
- Who tends to use it: Concentrated, large-cap-only US tech.
SCHG — Schwab US Large-Cap Growth ETF
SCHG tracks a large-cap growth index, so it leans into the faster-growing half of the US large-cap market rather than a single sector. It is broader than a pure-tech fund (it still includes growth names outside technology) but more concentrated than the S&P 500, and its expense ratio is among the cheapest growth ETFs. It is a common low-cost way to add a growth tilt. (Walnut does not yet publish a dedicated SCHG page.)
- Category: Growth / tech.
- Expense ratio: Very low (~0.04%).
- Who tends to use it: Broad large-cap growth at minimal cost.
Dividend and income ETFs (SCHD, VYM, JEPI)
These funds emphasize income and tend to tilt away from the mega-cap tech names that dominate the broad market. They suit investors who want yield, lower volatility, or a deliberate counterweight to a growth-heavy core, often inside a tax-advantaged account.
SCHD — Schwab US Dividend Equity ETF
SCHD holds about 100 quality-screened dividend payers at roughly equal weights, selecting for a ten-year dividend history, cash-flow durability, and return on equity rather than the highest headline yield. It yields around 3.5% and deliberately tilts toward healthcare, staples, and industrials, so it complements rather than duplicates a fund like VOO or QQQ.
- Category: Dividend / income.
- Expense ratio: Very low (~0.06%).
- Who tends to use it: Quality-screened dividend growth.
VYM — Vanguard High Dividend Yield ETF
VYM holds roughly 540 US stocks chosen simply for above-median yield, with no quality screen, so it is more broadly diversified than SCHD and yields a bit less (around 2.7%). It is the wider, lower-yield net on the same dividend theme, and people use it when they want income exposure spread thinly across hundreds of names.
- Category: Dividend / income.
- Expense ratio: Very low (~0.06%).
- Who tends to use it: Broad, diversified dividend exposure.
JEPI — JPMorgan Equity Premium Income ETF
JEPI is an actively managed fund that pairs a portfolio of US large-caps with a covered-call options overlay to generate high monthly income, with a headline yield well above a traditional dividend ETF. The trade-off is that the option-writing caps upside in strong rallies, and the distribution varies month to month. It is income-first rather than growth-first. (Walnut does not yet publish a dedicated JEPI page.)
- Category: Dividend / income.
- Expense ratio: Moderate (~0.35%).
- Who tends to use it: High monthly income from a covered-call strategy.
Semiconductor and AI ETFs (SMH, SOXX)
These are concentrated bets on the chip industry that sits underneath the AI buildout. They are sector satellites, not core holdings, and they swing harder than a broad index in both directions, so position sizing matters more than usual.
SMH — VanEck Semiconductor ETF
SMH holds just 25 chip names and is very top-heavy: NVIDIA alone can run near 20% and Taiwan Semiconductor another 10%, with Broadcom and AMD behind them. That makes it the more aggressive way to express a semiconductor or AI-infrastructure thesis in one ticker. The concentration that drives outperformance in strong AI legs also amplifies drawdowns when the cycle turns.
- Category: Semiconductors / AI.
- Expense ratio: Moderate (~0.35%).
- Who tends to use it: Concentrated, leaders-led chip exposure.
SOXX — iShares Semiconductor ETF
SOXX holds about 30 chip names and caps individual weights more aggressively than SMH, so NVIDIA sits closer to 9.5% rather than dominating. It spreads exposure across designers, memory, and equipment makers, which makes it the less top-heavy expression of the same sector. Owning both SMH and SOXX adds little, since they cover the same universe.
- Category: Semiconductors / AI.
- Expense ratio: Moderate (~0.35%).
- Who tends to use it: Broader semiconductor exposure with less single-name risk.
Sector and thematic ETFs (XLY, XLI, ITA)
These slice the market into a single sector or theme. They are the most targeted satellites on this page, useful when you have a specific view, and they carry the most concentration risk relative to a diversified core.
XLY — Consumer Discretionary Select Sector SPDR Fund
XLY holds the consumer-discretionary sector of the S&P 500, which is dominated by Amazon and Tesla at the top, alongside retailers, restaurants, and homebuilders. It is a focused bet on US consumer spending and tends to be cyclical, leading in expansions and lagging in slowdowns. It is a sector satellite rather than a diversified holding.
- Category: Sector tilt.
- Expense ratio: Low (~0.09%).
- Who tends to use it: A bet on consumer spending.
XLI — Industrial Select Sector SPDR Fund
XLI holds the industrial sector of the S&P 500: aerospace and defense, machinery, transportation, and capital-goods names. It is a way to tilt toward the part of the economy tied to manufacturing, infrastructure, and capital spending. Like other single-sector funds it is more cyclical and concentrated than a broad index.
- Category: Sector tilt.
- Expense ratio: Low (~0.09%).
- Who tends to use it: Exposure to industrials and capital spending.
ITA — iShares US Aerospace & Defense ETF
ITA holds US aerospace and defense companies, the prime contractors and suppliers behind military and commercial aviation. It is a narrow thematic tilt tied to defense budgets and the aerospace cycle, so it concentrates a single industry rather than spreading across the market. People use it to express a defense thesis without picking individual contractors.
- Category: Thematic tilt.
- Expense ratio: Low to moderate (~0.40%).
- Who tends to use it: A focused aerospace and defense theme.
At a glance
| ETF | Category | Expense ratio | Best for |
|---|---|---|---|
| VOO | Broad-market core | Very low (~0.03%) | A cheap, diversified S&P 500 core |
| VTI | Broad-market core | Very low (~0.03%) | One-fund exposure to the whole US market |
| SPY | Broad-market core | Low (~0.0945%) | Traders and options strategies |
| IVV | Broad-market core | Very low (~0.03%) | An S&P 500 core in the iShares ecosystem |
| QQQ | Growth / tech | Moderate (~0.20%) | Big-tech and Nasdaq-100 growth exposure |
| VGT | Growth / tech | Low (~0.09%) | Broad, cheap pure-tech exposure |
| XLK | Growth / tech | Low (~0.09%) | Concentrated, large-cap-only US tech |
| SCHG | Growth / tech | Very low (~0.04%) | Broad large-cap growth at minimal cost |
| SCHD | Dividend / income | Very low (~0.06%) | Quality-screened dividend growth |
| VYM | Dividend / income | Very low (~0.06%) | Broad, diversified dividend exposure |
| JEPI | Dividend / income | Moderate (~0.35%) | High monthly income from a covered-call strategy |
| SMH | Semiconductors / AI | Moderate (~0.35%) | Concentrated, leaders-led chip exposure |
| SOXX | Semiconductors / AI | Moderate (~0.35%) | Broader semiconductor exposure with less single-name risk |
| XLY | Sector tilt | Low (~0.09%) | A bet on consumer spending |
| XLI | Sector tilt | Low (~0.09%) | Exposure to industrials and capital spending |
| ITA | Thematic tilt | Low to moderate (~0.40%) | A focused aerospace and defense theme |
The table is a summary; the descriptions above carry the detail that matters for choosing. Note how many of these funds overlap: VOO, VTI, IVV, QQQ, VGT, and XLK all hold Microsoft, Apple, and NVIDIA near the top, so combining several of them stacks the same mega-caps rather than spreading risk.
VOO vs VTI vs SPY: which broad-market ETF?
For the core slot, the choice usually comes down to these. All four broad-market funds (VOO, VTI, SPY, IVV) hold the same large-cap US leaders at the top, so their day-to-day moves are nearly identical. The differences are in breadth and cost.
- VOO and IVV hold the S&P 500 at around 0.03%. They are interchangeable; the choice is Vanguard versus iShares.
- VTI holds the same large-caps plus the mid- and small-cap tail at the same 0.03%, so it is VOO plus everything VOO leaves out. People choose it for total-market breadth in one ticker.
- SPY tracks the S&P 500 too but costs more (around 0.0945%) in exchange for the deepest options market and tightest spreads of any ETF. It earns its premium for active traders, not cost-focused long-term holders.
In short: cost-focused buy-and-hold leans VOO, VTI, or IVV; trading and options strategies lean SPY. Holding more than one of these together adds almost no diversification, since they own the same companies.
How do you combine ETFs into a portfolio?
The simplest durable structure is a core plus a few satellites. Pick one broad-market core (VOO, VTI, SPY, or IVV) as the foundation, then add a small number of satellites that match a goal: a growth tilt (QQQ or VGT), an income sleeve (SCHD or VYM), or a sector bet (SMH, XLY, or ITA). The core does the diversification; the satellites express your views.
Two things tend to trip people up. The first is overlap: adding QQQ and VGT on top of VOO stacks more weight on Microsoft, Apple, and NVIDIA rather than diversifying, because all three hold those names at the top. The second is sizing: a concentrated satellite like SMH can swing far more than the core, so a heavy weight inherits that volatility. Checking overlap and sizing before you add a fund is where most of the real decision lives.
This is the part where a connected tool helps. Walnut connects your existing brokerage through SnapTrade and lets you build baskets around a core ETF, see how much a new fund overlaps with what you already hold, and track each position against the S&P 500. You can ask it questions in plain language through Claude, ChatGPT, or a built-in assistant. It is read-only by default, and you approve any trade. Walnut is not an investment adviser.
How we chose these ETFs
We limited the field to widely held, low- to moderate-cost ETFs that map cleanly onto a real portfolio goal, which is why this is grouped by job rather than ranked one through ten. Within each group we described funds on the same fields:
- What it holds: the index or sector, the number of names, and where the weight concentrates.
- Cost: a qualitative read on the expense ratio, since fees compound over decades. We did not invent precise figures; verify current numbers on each issuer's site.
- Role in a portfolio: whether the fund is a diversified core or a concentrated satellite, and who tends to use it that way.
- Overlap: we flagged where funds hold the same mega-caps, because stacking overlapping ETFs is the most common portfolio mistake.
We did not crown a single winner, because the best ETF depends entirely on the slot you are filling. Holdings, weights, and fees change over time; treat the specifics here as a starting point and confirm on each provider's site before deciding.
The bottom line on the best ETFs for 2026
The best ETF for 2026 is not a single ticker; it is whichever fund fits the job you are hiring it for. For a diversified foundation, VOO, VTI, SPY, and IVV hold the large-cap US market cheaply. For a growth tilt, QQQ, VGT, XLK, and SCHG lean into technology. For income, SCHD, VYM, and JEPI emphasize dividends. For semiconductors and AI, SMH and SOXX concentrate the chip sector. For sector bets, XLY, XLI, and ITA target consumer, industrial, and defense exposure. Most portfolios are one broad core plus a small number of satellites, with overlap and position sizing doing more for the outcome than the exact ticker. Walnut is informational and not an investment adviser; nothing here is a recommendation to buy or sell any fund.
From a connected account you can dig into any of these as an ETF, look at an individual stock one of them holds, or explore a theme you want exposure to. For the wider tooling field, see the best AI investing apps roundup or the best AI portfolio analyzers.
Try Walnut on top of your broker
Walnut connects any major US broker in a few clicks, then helps you build a portfolio around a core ETF, see overlap with what you already hold, and track each position against the S&P 500 by chatting through Claude, ChatGPT, or its built-in AI. Read-only by default; you approve every trade.
FAQ
What are the best ETFs to invest in for 2026?
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There is no single best ETF; it depends on your goal. For a broad-market core, VOO, VTI, SPY, and IVV hold the large-cap US market cheaply. For growth, QQQ, VGT, XLK, and SCHG tilt toward technology. For income, SCHD, VYM, and JEPI emphasize dividends. For semiconductors and AI, SMH and SOXX concentrate the chip sector. For sector bets, XLY, XLI, and ITA target consumer, industrial, and defense exposure.
What is the best ETF for beginners in 2026?
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Most long-term investors start with a single broad-market core fund like VOO (the S&P 500) or VTI (the total US market), because one ticker gives you wide diversification at a very low cost, around 0.03%. They behave like the overall US market rather than a concentrated bet, which is why they are the most common first holding. Walnut is not an investment adviser; this is descriptive, not a recommendation.
VOO vs VTI vs SPY: which broad-market ETF is best?
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All three track the large-cap US market and their top holdings are nearly identical. VOO and IVV hold the S&P 500 at about 0.03%. VTI holds the same large-caps plus the mid- and small-cap tail at the same 0.03%. SPY tracks the S&P 500 too but costs more (around 0.0945%) in exchange for the deepest options market. Cost-focused holders lean VOO or VTI; active traders lean SPY.
What is the cheapest ETF for the S&P 500?
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VOO (Vanguard) and IVV (iShares) both track the S&P 500 at roughly a 0.03% expense ratio, which is among the lowest of any equity fund. SPY tracks the same index but costs more (around 0.0945%) because of its older unit-investment-trust structure. For a long-term S&P 500 holding focused purely on cost, VOO and IVV are cheaper than SPY.
What is the best ETF for AI in 2026?
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There is no single AI ETF; exposure comes through a few angles. SMH and SOXX concentrate the semiconductor companies (NVIDIA, Taiwan Semiconductor, Broadcom, AMD) that build AI hardware. QQQ and VGT give broader technology exposure that includes the large software and cloud names. SMH is the most concentrated chip bet; QQQ is the broadest. None of them is a guaranteed winner, and all are more volatile than a broad-market core.
What is the best dividend ETF for 2026?
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It depends on whether you want quality or breadth. SCHD screens roughly 100 dividend payers for quality and yields around 3.5%. VYM spreads across roughly 540 above-median-yield names at a lower yield (around 2.7%). JEPI uses a covered-call strategy for high monthly income at the cost of capped upside. SCHD is the quality-and-yield specialist; VYM is broad and cheap; JEPI is income-first.
What makes an ETF a good core holding?
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A good core holding is broadly diversified, very low cost, and built to track the overall market rather than a single idea. Funds like VOO, VTI, and IVV fit because one ticker captures the large-cap US market at around 0.03% a year, so they behave like the market itself. A core is what you build a portfolio around; sector and thematic ETFs are the satellites you layer on top.
How many ETFs should I hold in a portfolio?
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Many investors use a small number, often a broad-market core plus one to three satellites for tilts they care about. A common simple structure is a single total-market or S&P 500 fund, with optional adds for international, bonds, dividends, or a sector view. Holding many overlapping ETFs (for example VOO, QQQ, and VGT together) can stack the same mega-caps rather than diversify. Walnut is not an investment adviser.
Do these ETFs overlap with each other?
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Yes, often heavily. VOO, VTI, IVV, QQQ, VGT, and XLK all hold Microsoft, Apple, and NVIDIA near the top, so combining them stacks weight on the same names rather than spreading risk. SMH and SOXX cover the same chip universe. SCHD and VYM share several large dividend payers. Checking overlap before adding a fund is one of the most useful things to do, and a connected tool like Walnut can show it across what you already hold.
What is the difference between an index ETF and a sector ETF?
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An index ETF like VOO or VTI tracks the broad market, holding hundreds or thousands of companies across every sector, so it is diversified by design. A sector ETF like XLK (technology), XLY (consumer discretionary), or XLI (industrials) holds only one slice of the market, so it concentrates a single industry. Sector funds are more volatile and are usually held as satellites around a broad core.
Are ETFs better than individual stocks for 2026?
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They serve different purposes. An ETF spreads a single purchase across many companies, so it diversifies away the risk of any one stock. Individual stocks concentrate a view and can move more, in both directions. Many investors hold a broad ETF as a core and add a few individual stocks or a thematic basket around it. Walnut is not an investment adviser; the right mix depends on your goals and risk tolerance.
Can fractional shares be used to buy these ETFs?
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Yes, at most modern brokers. Fractional shares let you invest a dollar amount rather than buying whole shares, which matters for funds with a high per-share price like SMH or SPY. Robinhood, Fidelity, Schwab, Public, and M1 all support fractional ETF purchases, and they let quarterly dividends reinvest automatically as fractional shares (DRIP).
How do I combine these ETFs into a portfolio?
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A common approach is to pick one broad-market core (VOO, VTI, SPY, or IVV) as the foundation, then add a small number of satellites that match a goal: a growth tilt (QQQ or VGT), an income sleeve (SCHD or VYM), or a sector bet (SMH, XLY, ITA). The core does the diversification; the satellites express your views. Connecting your broker to Walnut lets you see overlap and how each piece is doing against the S&P 500.
Walnut is informational and is not an investment adviser. ETF holdings, expense ratios, yields, and availability change; verify current details on each issuer's site before deciding. Nothing on this page is a recommendation to buy, sell, or hold any security or fund.