Compare the best ETFs to buy in 2023
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Here our experts choose their favourite ETFs from a range of sectors, including the world’s most popular businesses. Find out their top five ‘exchange-traded fund’ picks and learn about where to get them.
What are the top ETFs to buy?
You can find the best ETFs in the table below. These have been chosen by our financial experts and you can find the latest price information for each one by following the links. Alternatively, scroll down for a description of the five ETFs and an explanation for why they were chosen.
| # | ETF ticker | ETF name | Where to Trade |
|---|---|---|---|
| 1 | ARKK | Ark Innovation ETF | |
| 2 | XLF | Financial Select Sector SPDR Fund | |
| 3 | ICLN | iShares Global Clean Energy ETF | |
| 4 | BTCC | Purpose Bitcoin ETF | |
| 5 | IBB | iShares Biotechnology ETF |
1. Ark Innovation ETF (NYSEARCA: ARKK)
The ARKK fund invests in high growth, disruptive companies with unique technology. It’s managed by Cathie Wood, the Ark Invest CEO, who’s known for her bold stock picks, and has been trading since 2014.
The innovation fund is an actively managed ETF, which means that the manager has wide scope to decide on which companies it owns. That makes it more like a mutual fund than a traditional, passive ETF, but the results speak for themselves: its shares began trading at $20 and now go for well over $100 each.
It’s rare to find an ETF with the potential to grow in price so quickly. ARKK’s holdings include the likes of Tesla, Zoom, Spotify, and Coinbase, to give you an idea of the sort of companies you can get your hands on. As the tech sector grows, ARKK is likely to go along with it.
2. Financial Select Sector SPDR Fund (NYSEARCA: XLF)
This fund tracks the performance of the financial sector by owning some of the biggest banks and financial institutions in the world. It only owns stocks that are part of the S&P 500 Index and weights its holdings by market capitalisation.
The XLF fund has been trading for more than 20 years and has tended to be a haven of steady growth over time. However, its reliance on the financial sector makes it cyclical and vulnerable to economic shocks.
A financial ETF like this is ideal for a market that you expect to keep on growing. The leading Wall Street banks make up some of its biggest holdings, and a positive environment along with any increase in interest rates would be great for those companies’ profitability.
3. iShares Global Clean Energy ETF (NASDAQ: ICLN)
The iShares ETF prioritises companies that are involved in the production of renewable energy. That means it’s the best fund if you want to gain exposure to solar, wind, or hydropower.
This is a relatively new ETF, having only been created in 2019. That means its previous history has been a bit erratic and it’s still hovering around the price that it started out at. To some extent, that reflects the overall volatility of renewable energy stocks, which are popular but fragile.
With such a strong focus on renewables, this is a great ETF to own if you believe in the future of the industry and want a way to own all of the most important stocks in one place. It saves you from having to try to work out which one is best and offers a way to invest in the sector as a whole.
4. Purpose Bitcoin ETF (TSE: BTCC)
The world’s first Bitcoin ETF, the Purpose fund gives you the chance to own cryptocurrency as part of your portfolio. It was created in 2021 and owns just one asset: Bitcoin. That means the fund is completely reliant on how it performs.
Over the course of its short life so far, that fact has been borne out quite dramatically. The fund was set up as Bitcoin was close to an all-time high and so the price of the fund’s shares have been on a rollercoaster ride since then.
The idea of an ETF, though, is to invest your money for the long term. As one of the best cryptocurrency ETFs available, it’s one of the only ways to add crypto to your portfolio through regular stock market channels. If you believe in the future of the market as a whole then it could have huge growth potential.
5. iShares Biotechnology ETF (NASDAQ: IBB)
The second iShares fund on this list, the Biotech ETF is another route into owning a portfolio of modern companies. In this case, it owns shares in a wide range of medical, pharmaceutical, and scientific companies.
The fund has been going for two decades and it has done consistently well over that time. The last five years have been particularly good as some of the companies it owns have started to see success.
The most notable is Moderna, the fund’s biggest holding, and one of the biggest winners of the coronavirus pandemic. That gives an insight into the potential of this ETF, which marries the potential for growth of some of the most hyped biotech companies with more traditional, steady pharma businesses, like Johnson & Johnson.
Where to buy the best ETFs
You can get all these ETFs straight away by going to one of the broker platforms below. You can use the links in the table to go to their website and sign up, or read through our in-depth reviews to compare their features.
What is an ETF?
It’s a type of financial security that tracks the performance of an index, market, or another type of asset. ETFs trade on the stock exchange so that you can buy or sell them at any time during the day.
An ETF generally holds a range of different stocks. It’s often a good way to create an instant portfolio of your own without having to assess the qualities of individual companies. Similarly, it can give you exposure to stocks that you might not be able to afford on their own.
Are ETFs a good investment?
It depends on your overall goals. ETFs are ideal for beginners because they’re so easy to use and take away the pressure of having to make the right call on which stocks to own. They might not be the best choice if you want to actively manage your portfolio or make lots of short term trades.
Another factor to consider is the company that manages the ETF and the fees it charges. The likes of Vanguard and Blackrock have been at the top of the money-management field for a long time. Similarly, you should expect to pay low maintenance fees for an ETF, in particular if it’s a passive fund that simply tracks an index or sector.
AThe best way to stay informed about which ETFs might be best is to track the latest ETF news. You can follow what’s going on in the stock market by using the links below, or head straight to a broker in order to get an ETF right now.
Latest ETF news
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