How to Invest in ETFs: 4 Top Performers for March 2025

Exchange-traded funds can be an excellent entry point into the stock market for new investors. They’re cheap and typically carry lower risk than individual stocks since a single fund holds a diversified collection of investments.

↓ Jump to the best-performing ETFs this month

How to buy an ETF

Investing in ETFs takes just a few steps. First, you’ll need a brokerage account. Then, you’ll need to find a low-cost ETF that suits your goals, using a screener tool. Once you’ve found the right fund, just place the trade and monitor your investment.

1. Open a brokerage account

You’ll need a brokerage account to buy and sell securities like ETFs. If you don’t already have one, see our resource on brokerage accounts and how to open one. This can be done online, and many brokerages have no account minimums, transaction fees or inactivity fees. Opening a brokerage account may sound daunting, but it’s really no different than opening a bank account.

If you’d rather have someone do the work of investing for you, you might be interested in opening an account with a robo-advisor. Robo-advisors build and manage an investment portfolio for you, often out of ETFs, for a low annual fee (typically 0.25% of your account balance). Because robo-advisors offer curated investment portfolios, you may not be able to find and invest in the ETFs outlined above. But that’s part of their appeal — the robo-advisor picks investments for you. (Here’s our list of the top robo-advisors.)

To screen and invest in the specific ETFs you want, you’ll need a brokerage account at an online broker.

» Want to compare options? See our full list of the best brokers for ETF investors.

2. Find and compare ETFs with screening tools

Now that you have your brokerage account, it’s time to decide what ETFs to buy. Whether you’re after the best-performing broad index ETFs or you’d like to search for others on your own, there are a few ways to narrow your ETF options to make the selection process easier.

Most brokers offer robust screening tools to filter the universe of available ETFs based on a variety of criteria, such as asset type, geography, industry, trading performance or fund provider.

There are thousands of ETFs listed in the U.S. alone, so screeners are critical for finding the ETFs you’re looking for. Try using the criteria below in your brokerage’s screener to narrow them down.

• Administrative expenses. Also known as expense ratios, these expenses cut into profit, so the lower the better. According to Vanguard, the average expense ratio for ETFs and mutual funds was 0.44% in 2024^[0]

  Vanguard. Expense Ratios: What They are & How They Work. Accessed Mar 24, 2025.

  View all sources

  . This could be a good number to start with in your screener. You’ll find, though, that some popular ETFs have expense ratios much lower than this, so don’t be afraid to screen for below the average.

• Commissions. These are fees you pay per transaction when you buy or sell an ETF. Fortunately, commissions are virtually nonexistent at most major online brokers these days, but it’s a good idea to check before you buy. Brokers that charge a commission often offer select ETFs commission-free.

• Volume. This shows how many shares traded hands over a given time period — it’s an indicator of how popular a particular fund is.

• Holdings. You’ll be able to see the top holdings in the fund, which simply means the individual companies the fund invests in.

• Performance. You know the saying: “Past performance doesn’t indicate future returns.” However, it can still be useful to compare the performance history of similar funds. Look at a fund's long-term performance, such as three-year, five-year or 10-year performance, instead of one-year performance to get a sense of how it has performed historically.

• Trading prices. ETFs trade like stocks; you’ll be able to see current prices, which dictate how many shares you can afford to buy.

» Need to back up? Read our guide on ETFs

3. Place the trade

The process for buying ETFs is very similar to the process for buying stocks. Navigate to the “trading” section of your brokerage’s website; in this context, “trade” means you’re either buying or selling an ETF. You’ll buy the ETF using its ticker symbol — here’s more on that and other basic terms you’ll need to know:

Before you execute your order, you’ll have an opportunity to double-check that everything is correct. Make sure your order is set up as intended: Check the ticker symbol (ETFs with similar ticker symbols can be wildly different), order type and that you haven’t made a potentially costly typo with any numbers — for example, typing 1,000 shares when you intended to buy only 100.

4. Sit back and relax

Congratulations, you’ve just bought your first ETF. These funds can help form the basis of a well-diversified portfolio and serve as the first step in a long-lasting investment in the markets. There’s no need to compulsively check how this ETF (or your other investments) is performing, but you can access that information when you need it by checking the ticker symbol on your brokerage’s website or even just by typing it into Google.

4 best-performing ETFs this month

One way for beginner investors to get started is to buy ETFs that track broad market indexes, such as the S&P 500. In doing so, you’re investing in some of the largest companies in the country with the goal of long-term returns. Other factors to consider include risk and the fund’s expense ratio.

To arrive at our list, we looked for ETFs with expense ratios below 0.5% that hold the largest U.S.-based companies. We excluded leveraged and inverse ETFs. The results are listed below in order of one-year performance.

Best ETFs for March by one-year performance

Types of ETFs

There are many types of ETFs that can expose your portfolio to different assets and markets. These include:

• Stock ETFs.

• Bond ETFs.

• Specialty ETFs.

• Sustainable ETFs.

• Commodity ETFs.

• Factor ETFs.

• Currency ETFs.

By including other sectors and types of investments within your investment portfolio, you're diversifying your assets. Diversification brings down risk. In the event that one company or sector does not perform well, you have many others that may support the performance of your portfolio as a whole. You should evaluate your financial plan to decide if any of these types of ETFs are right to include in your portfolio. You'll need to consider your investment goals and risk tolerance.

ETF advantages

Investors have flocked to exchange-traded funds because of their simplicity, relative cheapness and access to a diversified product.

Diversification

While it’s easy to think of diversification in the sense of the broad market verticals — stocks, bonds or a particular commodity, for example — ETFs also let investors diversify across horizontals, like industries. It would take a lot of money and effort to buy all the components of a particular basket, but with the click of a button, an ETF delivers those benefits to your portfolio. Diversification can help safeguard your portfolio against market volatility. If you invested in just one industry, and that industry had a really bad year, it's likely your portfolio would have performed poorly too. By investing across different industries, company sizes, geographies and more, you give your portfolio more balance. Because ETFs are already well-diversified, you don't have to worry about creating diversification within your portfolio.

Transparency

Anyone with internet access can search the price activity for a particular ETF on an exchange. In addition, a fund’s holdings are disclosed each day to the public, whereas that happens monthly or quarterly with mutual funds. This transparency allows you to keep a close eye on what you're invested in. Say you really don't want to be invested in oil — you'd be able to spot those additions to your ETF more easily than with a mutual fund.

Tax benefits

ETFs have two major tax advantages over mutual funds.

If you invest in a mutual fund, you may have to pay capital gains taxes (which are taxes on profits from the sale of an asset, like a stock) throughout the lifetime of your investment. This is because mutual funds, particularly those that are actively managed, often trade assets more frequently than ETFs. Most ETFs, on the other hand, only incur capital gains taxes when you go to sell the investment. This means you'll pay less tax on your ETF investment overall.

As mutual fund managers are actively buying and selling investments and incurring capital gains taxes along the way, the investor may be exposed to both long-term and short-term capital gains tax. If you're invested in an ETF, you get to decide when to sell, making it easier to avoid those higher short-term capital gains tax rates.

ETF disadvantages

Exchange-traded funds may work well for some investors, but they aren't perfect.

Trading costs

ETF costs may not end with the expense ratio. Because ETFs are exchange-traded, they may be subject to commission fees from online brokers. Many brokers have decided to drop their ETF commissions to zero, but not all have.

Potential liquidity issues

As with any security, you’ll be at the whim of the current market prices when it comes time to sell, but ETFs that aren’t traded as frequently can be harder to unload.

Risk that the ETF will close

The primary reason this happens is that a fund hasn’t brought in enough assets to cover administrative costs. The biggest inconvenience of a shuttered ETF is that investors must sell sooner than they may have intended, possibly at a loss. There’s also the annoyance of having to reinvest that money and the potential for an unexpected tax burden.

More categories of ETFs

Here's a list of pages that show the best-performing ETFs in various categories: