10 Top Performing ETFs of 2026 For Your Portfolio
Muhammad Faraz 
10 Top Performing ETFs of 2026 For Your Portfolio
Taking control of your investment portfolio starts with understanding the powerful tools at your disposal. This guide cuts through the market noise to analyze the best-performing Exchange-Traded Funds (ETFs) based on rigorous criteria. We help you understand what drives their success and how they can fit into your investment strategy, whether you’re a US, UK, or Canadian investor looking for growth, income, or diversification.
What are Top Performing ETFs
Top-performing ETFs are exchange-traded funds that have consistently delivered superior returns relative to their benchmark index and peer group over a specific period. However, performance isn’t just about raw returns; it encompasses a combination of strong risk-adjusted returns, low expense ratios, high liquidity, and a disciplined investment strategy. Think of them as a curated basket of securities—like stocks or bonds—that you can buy and sell like a single stock, but which have proven their ability to excel in the market based on more than just luck.
Key Takeaways
Goal-Based ETF Selection
| Your Primary Investment Goal | Best ETF Type | Key Feature to Look For |
|---|---|---|
| Long-Term Growth & Diversification | Broad Market Index ETF | Ultra-low expense ratio, high AUM, tracks a major index like S&P 500 or FTSE All-World. |
| Aggressive Growth / Thematic Bet | Sector or Thematic ETF | Exposure to a high-growth niche (e.g., AI, Robotics), but higher volatility and potential drawdowns. |
| Income & Dividends | High-Dividend or Covered Call ETF | High dividend yield, sustainable payout ratio, focus on tax efficiency (e.g., qualified dividends). |
| Hedging & Diversification | Commodity or Inverse ETF | Low correlation to stock market, provides a hedge against inflation or market downturns (use with caution). |
| Tactical, Short-Term Play | Leveraged/Inverse ETF | Magnified daily returns, but only for sophisticated, active traders due to decay risk. |
For investors in the UK, many US-domiciled ETFs are available through major brokers like Hargreaves Lansdown or Interactive Investor, but be mindful of the 15% US dividend withholding tax. Consider UK-domiciled accumulating ETFs for greater tax efficiency within an ISA or SIPP. US users can access these funds directly through platforms like Vanguard, Fidelity, or Charles Schwab.
10 Top Performing ETFs of 2026
We’ve analyzed performance, costs, strategy, and liquidity to bring you a curated list of top-tier ETFs for 2026. This list is designed for a range of investor profiles, from the core, long-term builder to the more tactical allocator. Remember, past performance is not indicative of future results, and this is not financial advice.
1. Vanguard S&P 500 ETF (VOO)
Overall Score: 5/5
Best For: The core of any long-term, US-focused equity portfolio.
Pricing: 0.03% expense ratio.
The Vanguard S&P 500 ETF (VOO) is the gold standard for core US equity exposure. It tracks the S&P 500 index, which represents 500 of the largest companies listed on US stock exchanges. Its primary philosophy is low-cost, passive exposure to the broad US market. With a microscopic expense ratio and a perfect tracking record, it allows investors to capture the market’s return with maximum efficiency. It is highly liquid and one of the largest ETFs in the world by assets under management (AUM).
Key Features:
- Tracks the S&P 500 Index.
- Ultra-low 0.03% expense ratio.
- Massive AUM and daily trading volume.
- Physically replicates the index (holds all 500 stocks).
- Distributions are quarterly.
- Extremely low cost ensures you keep almost all of the index’s return.
- Superb liquidity with a razor-thin bid-ask spread.
- Proven long-term track record of tracking the benchmark US large-cap index.
- High diversification across leading US companies.
- No exposure to small or mid-cap companies.
- Pure US focus means no international diversification.
- Concentrated Performance is entirely tied to the fortunes of the S&P 500.
Why We Picked It: We chose VOO for the #1 spot because it represents the most efficient, cost-effective, and reliable way to gain exposure to the US stock market. For most investors, it should form the bedrock of a diversified equity portfolio.
2. Invesco QQQ Trust (QQQ)
Overall Score: 4.5/5
Best For: Investors seeking aggressive growth through exposure to the largest non-financial companies on the Nasdaq.
Pricing: 0.20% expense ratio.
The Invesco QQQ Trust is one of the most popular ETFs for growth-oriented investors, tracking the Nasdaq-100 Index. This index comprises the 100 largest non-financial companies listed on the Nasdaq stock exchange. The fund’s philosophy centers on capturing the performance of innovative, growth-oriented companies that are driving technological advancement and digital transformation. With heavy weighting in technology giants, QQQ has delivered exceptional returns during periods of tech dominance but is also more volatile than broad market funds.
Key Features:
- Tracks the Nasdaq-100 Index
- Heavy concentration in technology sector (approximately 50%)
- Includes consumer discretionary and healthcare leaders
- Expense ratio of 0.20%
- Extremely high liquidity with narrow bid-ask spreads
- Quarterly distributions
- Exceptional historical returns driven by tech sector outperformance.
- Direct exposure to innovative, market-leading companies.
- Superior liquidity for easy entry and exit.
- Diversification within growth sector across 100 companies.
- Heavy sector concentration in technology increases risk.
- Higher expense ratio than broad market ETFs.
- Increased volatility compared to S&P 500 funds.
- No exposure to financial or traditional industrial sectors.
Why We Picked It: QQQ earns its high ranking due to its unparalleled exposure to the innovative companies driving technological disruption, making it an essential satellite holding for growth-oriented investors who understand the associated sector risks.
3. iShares Core MSCI World ETF (SWDA/URTH)
Overall Score: 4.8/5
Best For: Investors seeking comprehensive, one-stop global equity diversification across developed markets.
Pricing: 0.20% expense ratio (SWDA), 0.24% (URTH)
The iShares Core MSCI World ETF provides exposure to large and mid-cap companies across 23 developed market countries. The fund’s philosophy is to offer investors a single, cost-effective solution for global equity diversification. By capturing approximately 85% of the free float-adjusted market capitalization in each developed country, it serves as a core building block for international portfolios. The UK-listed SWDA is accumulating, making it particularly tax-efficient for UK investors in ISAs and SIPPs.
Key Features:
- Tracks MSCI World Index
- Exposure to 1,500+ stocks across 23 developed countries
- Heavy weighting to US markets (approximately 70%)
- Available as accumulating (SWDA) or distributing (URTH)
- Low 0.20% expense ratio for comprehensive global exposure
- True global diversification in a single ETF.
- Low cost for comprehensive developed market exposure.
- Tax-efficient options for international investors.
- Extensive liquidity and large AUM.
- Automatic rebalancing across global markets.
- No emerging markets exposure limits global reach.
- Heavy US weighting may not provide pure international diversification.
- Currency risk for non-USD investors.
- Higher minimum investment for some share classes.
Why We Picked It: We selected SWDA/URTH as the premier choice for developed market diversification due to its comprehensive coverage, low costs, and tax-efficient share classes that cater to both US and international investors.
4. Vanguard Total World Stock ETF (VT)
Overall Score: 4.7/5
Best For: The ultimate “set-and-forget” global equity portfolio in a single fund.
Pricing: 0.07% expense ratio
The Vanguard Total World Stock ETF takes global diversification to the next level by including both developed and emerging markets. Tracking the FTSE Global All Cap Index, VT provides exposure to nearly 9,700 stocks across 47 countries, representing about 98% of the world’s investable market capitalization. The fund’s philosophy is to offer the most complete equity portfolio possible in a single, low-cost vehicle. This makes it ideal for investors who want maximum diversification with minimal complexity.
Key Features:
- Tracks FTSE Global All Cap Index
- Coverage of 9,700+ stocks across 47 countries
- Includes both developed and emerging markets
- Ultra-low 0.07% expense ratio
- Market-cap weighted allocation
- Quarterly distributions
- Most comprehensive global equity coverage available.
- Extremely low cost for all-world exposure.
- Automatic market weighting ensures proper allocation.
- True one-fund portfolio solution for simple investors.
- Vanguard’s proven tracking record of fund management.
- Still US-heavy (about 60% weighting).
- Emerging markets exposure adds volatility.
- No control over country/sector allocations.
- Less liquid than US-focused ETFs.
Why We Picked It: VT represents the pinnacle of simple, effective global diversification. For investors who want to own the entire global stock market without any complexity, VT is the definitive choice.
5. iShares Core S&P Small-Cap ETF (IJR)
Overall Score: 4.3/5
Best For: Completing US equity exposure and capturing the potential higher growth of small-cap companies.
Pricing: 0.06% expense ratio
The iShares Core S&P Small-Cap ETF tracks the S&P SmallCap 600 Index, providing exposure to 600 small-cap US companies. The fund’s philosophy is based on the academic evidence that small-cap stocks have historically delivered higher returns than large-caps over the long term, though with higher volatility. IJR offers pure, low-cost access to this segment of the market, which is often overlooked by investors focused solely on large-cap stocks. The S&P 600 index includes profitability screens, which may provide better quality exposure than broader small-cap indices.
Key Features:
- Tracks S&P SmallCap 600 Index
- Exposure to 600 US small-cap companies
- Low 0.06% expense ratio
- Broad sector diversification within small-caps
- Quarterly distributions
- Profitability requirement for index inclusion
- Pure small-cap exposure with quality screens.
- Very low cost for small-cap access.
- Historical outperformance potential vs. large-caps.
- Diversification benefits from different market segment.
- High liquidity for a small-cap ETF.
- Higher volatility than large-cap ETFs.
- Underperformance risk during economic downturns.
- Less established companies with higher business risk.
- Tracking error can be higher than large-cap ETFs.
Why We Picked It: IJR earns its place as the premier small-cap ETF due to its low cost, quality-focused index methodology, and excellent liquidity, making it the ideal tool for completing US equity exposure.
6. Vanguard Real Estate ETF (VNQ)
Overall Score: 4.2/5
Best For: Income-focused investors seeking diversification through real estate investment trusts (REITs).
Pricing: 0.12% expense ratio
The Vanguard Real Estate ETF provides exposure to US real estate investment trusts (REITs), which own and operate income-producing real estate across various property sectors. The fund tracks the MSCI US Investable Market Real Estate 25/50 Index, offering comprehensive exposure to the US real estate market. VNQ’s philosophy is to provide investors with a liquid, diversified way to access real estate returns, which have historically shown low correlation with other equity sectors. The fund typically offers higher dividend yields than broad market ETFs.
Key Features:
- Tracks MSCI US Investable Market Real Estate 25/50 Index
- Exposure to 160+ US REITs
- Diversified across property types (residential, commercial, industrial)
- Competitive 0.12% expense ratio
- Monthly dividend distributions
- High dividend yield (typically 3-4%)
- High income generation through REIT dividends.
- Portfolio diversification from different asset class.
- Inflation hedging potential through real estate ownership.
- Liquid real estate exposure without property management.
- Low cost for specialized sector exposure.
- Interest rate sensitivity – performs poorly when rates rise.
- Economic cycle vulnerability during recessions.
- Sector concentration risk in real estate.
- Tax inefficiency in taxable accounts (non-qualified dividends).
Why We Picked It: VNQ is our top REIT ETF due to its comprehensive coverage of the US real estate market, low costs, and high liquidity, making it the ideal vehicle for adding real estate exposure to a diversified portfolio.
7. JPMorgan Equity Premium Income ETF (JEPI)
Overall Score: 4.4/5
Best For: Income-focused investors seeking high monthly dividends with lower volatility than the broad market.
Pricing: 0.35% expense ratio
The JPMorgan Equity Premium Income ETF employs a covered call strategy to generate high current income from a portfolio of large-cap US stocks. The fund’s philosophy combines equity exposure with options writing to provide monthly income while seeking to lower overall portfolio volatility. JEPI holds a basket of low-volatility stocks and sells call options on the S&P 500 Index to generate premium income. This strategy has proven particularly effective in flat or declining markets, though it may limit upside participation during strong bull markets.
Key Features:
- Active covered call strategy
- Portfolio of low-volatility US stocks
- Monthly dividend distributions
- High yield (typically 7-9%)
- 0.35% expense ratio for active management
- Lower volatility than broad market
- High monthly income generation.
- Lower volatility than equity markets.
- Downside protection in market declines.
- Active management can adapt to market conditions.
- Strong performance in sideways or down markets.
- Limited upside in strong bull markets.
- Higher expense ratio than passive ETFs.
- Active management risk.
- Complex strategy may be hard to understand.
- Relatively new fund with limited track record.
Why We Picked It: JEPI represents an innovative approach to income generation that has demonstrated impressive results in various market conditions, making it a top choice for investors seeking high yield with managed risk.
8. iShares iBoxx $ High Yield Corporate Bond ETF (HYG)
Overall Score: 4.1/5
Best For: Investors seeking higher yield and willing to accept higher credit risk in their fixed income allocation.
Pricing: 0.49% expense ratio
The iShares iBoxx $ High Yield Corporate Bond ETF provides exposure to US dollar-denominated high-yield corporate bonds, commonly known as “junk bonds.” The fund tracks the Markit iBoxx USD Liquid High Yield Index, which includes below-investment grade corporate bonds. HYG’s philosophy is to offer investors access to the higher income potential of corporate bonds from companies with lower credit ratings. While carrying higher default risk, these bonds typically offer significantly higher yields than government or investment-grade corporate bonds.
Key Features:
- Tracks Markit iBoxx USD Liquid High Yield Index
- Exposure to 1,000+ high-yield corporate bonds
- Average credit rating of BB/B
- 0.49% expense ratio
- Monthly distributions
- High current yield (typically 6-8%)
- High income potential compared to other bonds.
- Diversification from government bond exposure.
- Liquidity in high-yield bond market.
- Economic recovery play as credit spreads narrow.
- Monthly income distributions.
- Higher default risk than investment-grade bonds.
- Interest rate sensitivity like all bonds.
- Economic cycle vulnerability during recessions.
- Higher expense ratio than equity ETFs.
- Credit spread risk can cause price declines.
Why We Picked It: HYG earns its place as the premier high-yield bond ETF due to its massive liquidity, comprehensive high-yield exposure, and established track record in the corporate bond market.
9. Vanguard Growth ETF (VUG)
Overall Score: 4.3/5
Best For: Investors seeking a style tilt toward growth companies within the US market through a low-cost vehicle.
Pricing: 0.04% expense ratio
The Vanguard Growth ETF provides targeted exposure to large-cap US growth stocks, tracking the CRSP US Large Cap Growth Index. The fund’s philosophy is based on the growth investment style, which focuses on companies expected to grow earnings at an above-average rate compared to the market. VUG offers a low-cost, diversified approach to accessing the growth factor, containing many of the same technology leaders as QQQ but within a broader, more diversified growth index. The fund has significantly outperformed value stocks during periods of technological advancement and low interest rates.
Key Features:
- Tracks CRSP US Large Cap Growth Index
- Exposure to 200+ large-cap growth stocks
- Ultra-low 0.04% expense ratio
- Heavy weighting in technology and consumer discretionary
- Quarterly distributions
- Market-cap weighted within growth universe
- Ultra-low cost for growth factor exposure.
- Diversified growth approach beyond just tech.
- Strong historical performance in growth-led markets.
- Vanguard’s index methodology and low tracking error.
- High liquidity and tight spreads.
- Style cycle risk – underperforms when value leads.
- Higher valuations than value stocks.
- Sector concentration in technology.
- Interest rate sensitivity for growth company valuations.
Why We Picked It: VUG represents the most cost-effective way to maintain a growth tilt within a US equity portfolio, offering Vanguard’s trademark efficiency with exposure to the growth investment factor.
10. Global X Lithium & Battery Tech ETF (LIT)
Overall Score: 3.9/5
Best For: Tactical investors making a concentrated bet on the electric vehicle and energy storage revolution.
Pricing: 0.75% expense ratio
The Global X Lithium & Battery Tech ETF provides targeted exposure to the complete lithium cycle, from mining and refining the metal through battery production. The fund tracks the Solactive Global Lithium Index, offering a pure-play approach to the lithium and battery technology theme. LIT’s philosophy centers on capturing the growth potential of the electric vehicle revolution and grid storage expansion, both of which are heavily dependent on lithium-ion batteries. This thematic ETF offers high growth potential but comes with significant volatility and concentration risk.
Key Features:
- Tracks Solactive Global Lithium Index
- Exposure to full lithium cycle (mining to battery production)
- Global portfolio across developed and emerging markets
- 0.75% expense ratio
- Concentrated in approximately 40 holdings
- Quarterly distributions
- Pure-play exposure to lithium and battery theme.
- Structural growth tailwinds from EV adoption.
- Diversification across lithium value chain.
- Global reach including key mining and battery companies.
- High growth potential in energy transition.
- Very high expense ratio.
- Extreme volatility and drawdowns.
- Concentration risk in single commodity theme.
- Technology risk from battery innovation.
- Political risk in mining jurisdictions.
Why We Picked It: LIT rounds out our list as the premier thematic ETF for investors seeking concentrated exposure to the electric vehicle and energy storage revolution, despite its higher risks and costs.
A Real-World Example: Building a Diversified Portfolio
Consider Anya, a 35-year-old software engineer in the US with a long-term horizon and moderate risk tolerance. She wants a simple, effective portfolio. She decides on a 70/30 stock/bond split. For the stock portion (70%), she allocates:
- 50% to VOO for core US exposure.
- 30% to VT for comprehensive international diversification.
- 10% to VNQ for real estate and income.
- 10% to IJR for small-cap growth potential.
For the bond portion (30%), she uses a mix of US Treasury and corporate bond ETFs (not listed here). She uses her broker’s automatic investing feature to contribute monthly, and she rebalances the portfolio once a year. This strategy gives her broad diversification, low costs, and a disciplined approach without being overly complex.
For a UK-based example, consider Tom, a 40-year-old consultant in London. He uses his Stocks and Shares ISA to hold the accumulating share class of the iShares Core MSCI World ETF (SWDA) for 80% of his portfolio, and the remaining 20% in a global government bond ETF. This simple two-ETF portfolio is highly tax-efficient and provides him with global diversification in a low-maintenance package.
How to Evaluate Any ETF
Before you invest in any ETF, run it through this checklist. This process adds significant value by teaching readers how to fish, rather than just giving them a fish.
- Check the Index & Strategy: What exactly does this ETF track? Is it a plain vanilla index, a smart-beta strategy, or a narrow thematic index? Understand the “what” and “why” behind its holdings.
- Scrutinize the Costs: Look beyond the expense ratio. Check the bid-ask spread, especially for low-volume ETFs. A low expense ratio can be negated by a wide spread if you trade frequently.
- Assess Liquidity: Look at the Average Daily Volume and Assets Under Management (AUM). Higher is generally better, ensuring you can buy and sell easily at fair prices.
- Look Under the Hood: Analyze the top 10 holdings and sector breakdown. Are you comfortable with the concentration? For bond ETFs, check the average credit rating and duration.
- Verify the Tracking Difference: This is how much the ETF’s performance deviates from its index, net of fees. A consistently small (and negative) tracking difference is a sign of efficient fund management. You can find this data on the issuer’s website.
Conclusion
Ultimately, top-performing ETFs are more than just a list of past winners; they are a reflection of sound strategy, relentless cost efficiency, and structural advantages. By focusing on these fundamentals rather than chasing last year’s returns, you can build a resilient, low-cost portfolio positioned for long-term success. The clarity gained from understanding what you own and why you own it is the foundation of confident investing. Start with a core position in a broad, low-cost index ETF to build the habit of investing, and then thoughtfully add satellite positions as your knowledge and strategy evolve.
How ETFs Relate to Other Investment Vehicles
While ETFs have become immensely popular, they are just one tool in the investor’s toolbox. Understanding how they compare to mutual funds and individual stocks is key to using them effectively.
| Feature | ETFs | Mutual Funds | Individual Stocks |
|---|---|---|---|
| Trading | Traded like stocks throughout the day at market price. | Bought/sold once per day at the closing NAV price. | Traded like stocks throughout the day. |
| Pricing | Intraday price fluctuates with market. | Price is the Net Asset Value (NAV) at market close. | Intraday price fluctuates with market. |
| Minimum Investment | One share. | Often has a minimum initial investment (e.g., $1,000-$3,000). | One share. |
| Cost Efficiency | Typically lower expense ratios; potential brokerage commissions. | Can have higher expense ratios; often no transaction fees. | Brokerage commissions; no expense ratio. |
| Diversification | High (holds a basket of securities). | High (holds a basket of securities). | None (single company risk). |
| Tax Efficiency | Generally more tax-efficient due to “in-kind” creation/redemption. | Can be less efficient due to capital gains distributions from fund turnover. | Tax efficiency depends on your holding period and trading. |
Related Terms
- Expense Ratio: The annual fee, expressed as a percentage of assets, that all funds or ETFs charge their shareholders. It directly reduces your net return.
- Bid-Ask Spread: The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask). A narrower spread is better for investors.
- Tracking Error: The divergence between the price performance of an ETF and the performance of its underlying index or benchmark. Lower is better.
- Creation Unit: A large block of ETF shares (often 50,000) used by Authorized Participants (APs) to create or redeem shares directly with the ETF issuer. This mechanism is key to an ETF’s tax efficiency and liquidity.
- AUM (Assets Under Management): The total market value of the assets that an ETF manages. Higher AUM generally indicates greater investor confidence and fund stability.
Frequently Asked Questions About Top Performing ETFs
Recommended Resources
- For in-depth data and comparison tools, visit Morningstar or ETF.com.
- To understand the mechanics of ETFs in detail, the Vanguard Advisor’s Alpha framework provides excellent white papers.
- For UK-specific ETF information and tax guidance, the official GOV.UK website on ISAs is essential reading.
- Check the official security pages for data aggregators like Plaid.com/security to understand how your bank data is protected when linked to financial apps.
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