The best ETFs to buy in today’s market serve as a great tool to diversify investor’s portfolios across several sectors. Exchange-traded funds (ETFs) include a basket of publicly listed companies and trade like regular stocks on the market. The types of companies included in the fund can vary based on certain criteria. Some are tech-focused while others may include dividend-paying companies. However, much like equities, ETFs are prone to volatility but their inherent diversity makes them ideal for generating long-term wealth. 

With the third quarter underway, 2024 is shaping up to be a strong year for the economy. However, looming inflation remains a concern and the Fed is expected to cut interest rates at the September meeting. In an environment rife with uncertainty, adding high-quality stocks with robust financial performance is a great way to hedge your portfolio against risks. As such, ETFs that offer exposure to several companies across industries have proven to be a useful tool to help navigate uncertain markets.

Invesco QQQ Trust (QQQ)

While most ETFs track the S&P 500, the Invesco QQQ Trust (NASDAQ:QQQ) tracks the Nasdaq-100 Index. This index includes the top 100 non-financial companies with a strong focus on the tech sector. Given the tech-heavy nature of the index, it’s no surprise that the Magnificent-7 stocks make up nearly half of Invesco’s portfolio.  

The run-up in tech stocks this year served as a boon for this ETF. Companies like Nvidia (NASDAQ:NVDA) which make up 7.3% of the ETF saw its shares surge a whopping 123% year-to-date (YTD). And with several tech companies issuing optimistic guidance this year, Invesco QQQ Trust has the potential to generate outsized returns. However, given that diversification is a key feature of ETFs, it is also worth noting that QQQ includes several consumer discretionary stocks.

In terms of its performance, Invesco QQQ does not disappoint. QQQ stock is up 141% in the last five years with average returns higher than the S&P 500 and Nasdaq Composite Index. This ETF offers a yield of 0.64% while remaining moderately cheap at an expense ratio of 0.2%. The fund’s diversified portfolio helps the winners balance out the losers. 

Despite the recent pullback in tech stocks, Invesco QQQ Trust remains one of the best ETFs to buy in today’s market for long-term returns. 

Vanguard S&P 500 ETF (VOO)

Vanguard S&P 500 ETF (NYSEARCA:VOO) offers excellent portfolio diversity. As the name suggests, this ETF tracks the S&P 500 and offers exposure to several blue-chip and dividend stocks. The S&P 500 Index includes the top 500 publicly traded companies and is widely considered to be the most closely monitored stock market index. Big tech companies such as Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) hold the largest positions in this fund.

In terms of performance, VOO is up 88% in the last five years and offers a yield of 1.26%. But its most compelling metric is its 0.03% expense ratio which is well below the industry average. This means that for every $10,000 investors only need to pay three dollars in fees. 

The uncertainty in the market certainly leaves room for a potential pullback. However, VOO’s exposure to stocks across industries makes this one of the top ETFs to buy for the long haul.

Schwab U.S. Dividend Equity ETF (SCHD)

The Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) sponsored by Charles Schwab holds assets over $58.75 billion, making it one of the largest large-cap ETFs on the market. The ETF tracks the Dow Jones U.S. Dividend 100 Index which focuses on stocks that show promise of long-term dividend payouts. Keeping with this theme, the ETF has seen 12 years of consecutive annual dividend increases.

As opposed to several large-cap ETFs that tend to focus on growth stocks, SCHD emphasizes value stocks. That is, companies trading below their true value. For many investors, identifying individual value stocks is a challenging undertaking. Fortunately, SCHD offers a compelling alternative with value stock holdings across several sectors including real estate, finance, healthcare and industrial. 

The SCHD ETF is up 55% in the last five years and offers a yield of 3.69%. Although there are dividend ETFs offering higher yields on the market, SCHD stands as one of the best ETF stocks to buy for its mix of value dividend picks and portfolio diversity. 

On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.