10 Low-Fee ETFs To Invest In

ETFs are popular because they’re cheap and easy. Over time, even the newest novice on the tightest budget can outperform professional fund managers by investing everything into a single well-chosen ETF. You can pick an ETF that tracks an index like the Dow or the Nasdaq, one that follows a strategy like growth or value investing or one that covers a concept like clean energy or cybersecurity.

ETF investors don’t have to pick stocks or analyze company fundamentals. The only statistic that really matters is the expense ratio. That’s the price you pay for the convenience of buying all those on-theme stocks with a single trade. 

The average expense ratio, according to Morningstar, is 0.45%. That’s $4.50 in annual fees for every $1,000 invested. Compared to a traditional, actively managed mutual fund, that’s dirt cheap — but you can get your hands on a whole lot of really good ETFs for a whole lot less. 

Here are 10 of the very best bargain ETFs that a little bit of money can buy.

• Expense ratio: 0.02%

The JPMorgan BetaBuilders U.S. Equity ETF passively tracks the Morningstar US Target Market Exposure Index. A single share gives you exposure to 85% of the broad U.S. equity market through a blend of large- and mid-cap stocks. It holds nearly 600 stocks, but its price is what makes it exceptional. With an expense ratio of just 0.02%, it’s in the running for the cheapest major ETF on the market.

• Expense ratio: 0.03%

ETFs that track the S&P 500 are among the most popular in the world — and it’s not hard to understand why. The S&P is the index that serves as the benchmark for the entire stock market. Own an ETF that tracks it, and you’ll own a piece of the 500 biggest and best-known U.S. corporations. All of the big ETF providers have some version of an S&P 500 fund. They’re all cheap, and since they track the index passively, they all do about the same thing. Vanguard’s VOO is among the biggest, cheapest and most popular of them all. For many investors, VOO represents the entirety of their portfolio — and they’ll beat most actively managed funds over time.

• Expense ratio: 0.03%

If the largest U.S. companies aren’t enough for you, you can take a bite out of the entire U.S. stock market with ITOT. That means everything — from the smallest and most obscure publicly traded companies all the way up the Amazons and Apples of the world. Here too, you don’t have to pay a premium for that kind of instant diversification — 0.03% is a small price to pay for virtually every stock in America.

• Expense ratio: 0.04%

If you’re looking for stocks with more growth potential than the big S&P blue chips can offer, but without the volatility of small-cap investing, consider the Vanguard Mid-Cap ETF. It tracks the CRSP US Mid Cap Index and currently includes 363 stocks. All of them are within the sweet spot where mid-cap investors earn their living — among companies that are big enough to be stable and secure, but that still have plenty of room left to grow.

• Expense ratio: 0.04%

If you’re looking for the opportunity for accelerated growth — and you have the stomach for the volatility that comes with small-cap investing — SCHA is a straightforward, low-cost ETF. Delivered by Schwab, one of the biggest names in the industry, SCHA tracks the Dow Jones U.S. Small-Cap Total Stock Market Index. In 2020, the fund enjoyed its best returns ever and suffered its worst returns ever in a single year.

• Expense ratio: 0.04%

Anyone looking to branch out beyond the U.S. and invest in other wealthy, industrialized economies can buy into businesses in Japan, the U.K., Canada, France, Germany, Switzerland and beyond with a single share of SPDW. It’s one of the core building blocks of a SPDR-based portfolio, but like the others mentioned on this list so far, this ETF could satisfy its entire sector for your portfolio. SPDW tracks the S&P Developed Ex-U.S. BMI Index for just four basis points.

• Expense ratio: 0.04%

If you’re a growth investor, there’s an ETF for that, too. SPYG tracks the S&P 500 Growth Index. You’re still dealing with big, brand-name S&P 500 companies like Apple and Microsoft, but they’re chosen and weighted by the likelihood that they might get even bigger. Over time, the index has outperformed the S&P 500, which means this one ETF could excel as an entire portfolio on its own.

• Expense ratio: 0.04%

Instead of growth investing, maybe you’re a value investor like Warren Buffett. In that case, consider VTV. Like SPYG, it sticks only to the major, U.S.-based companies that call the S&P 500 home. The difference is, it’s brought to you by Vanguard and it tracks the CRSP US Large Cap Value Index. There is some growth/value overlap, but the top 10 here are weighted much less toward tech and more more toward financial stocks like Buffett’s own Berkshire Hathaway.

• Expense ratio: 0.07%

The first of only two ETFs on this list to breach 0.05% is SCHH. Seven basis points are pricier than four, but in the realm of real estate investment trusts, 0.07% is about as dirt cheap as it gets. REITs allow average people to invest in real estate without actually buying real estate, and SCHH gives you a bite of 142 REITs at the same time. Among them are some of the biggest names in the industry, like Digital Realty Trust, Equinox and Simon Property Group.

• Expense ratio: 0.10%

The most expensive ETF on this list also just might be the biggest bargain. Yes, Vanguard’s popular emerging markets fund costs 10 basis points when you’ve just read about nine others that are much cheaper. Keep in mind, however, that the average ETF in general costs 0.45%. When you narrow it down to emerging market funds like VWO, the average expense ratio jumps to a bruising 1.23%. That’s $2,756 in fees spent on $10,000 over 10 years compared to $236 for VWO.

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