The stock market is in a strong bull market, with the S&P 500 and Nasdaq 100 indices rising to their record highs. This article explores some of the best ETFs to buy if you have $100,000 to invest today.
iShares Expanded Tech-Software Sector ETF (IGV)
Warren Buffett has always advised his followers to be greedy when others are fearful and to be fear when others are greedy.
The IGV ETF has underperformed the market this year as investors remained concerned that software companies will be fully disrupted by AI tools by Anthropic, OpenAI, and X. This explains why most companies like Atlassian, ServiceNow, and SalesForce have tumbled.
However, the reality is that the fear is largely exaggerated as many software companies will thrive in the new era of AI. For example, while AI tools can be helpful in accounting, chances that companies will abandon Intuit’s QuickBooks are minimal.
The same is true with other services such as those offered by companies like ServiceNow, Atlassian, Salesforce, and Microsoft.
Indeed, AI will help these companies by helping them cut costs and improving their products and services. Therefore, buying the IGV ETF is a bet that software is not dead.
State Street SPDR Portfolio S&P 500 ETF (SPYM)
Thousands of American ETFs have been created to beat the S&P 500 Index. A closer look at most of them shows that just a handful of them have successfully done that over the years.
Therefore, it makes sense to bet on the biggest American companies. Indeed, most analysts have boost their outlook for the S&P 500 Index this month.
There are several funds that track this index, with the most notable of them being the SPY, IVV, and VOO. Still, the SPYM is the best of them because of its 0.02% expense ratio, which makes it the cheapest.
For example, a $100,000 investment in the fund costs just $20, while a similar one in the SPY costs $90 a year. The $70 spread can be enormous over time.
Invesco NASDAQ 100 ETF (QQQM)
The QQQM ETF is another good ETF to invest in today as it tracks the biggest technology companies in the United States. It has a long history of beating the S&P 500 Index because of the role that technology companies play in the US economy.
The QQQM ETF has jumped by over 42% in the past 12 months, and this trend will likely continue as the AI boom gains steam. Indeed, financial results show that most American companies have continued spending billions of dollars in the industry.
This ETF, which has $82 billion in assets, is a better one than the popular QQQ because of its lower fees. It has am expense ratio of 0.15%, lower than the QQQ’s 0.18%. There is never a need to pay more for the same product.
Schwab US Dividend Equity ETF (SCHD)
The SCHD ETF is another fund to complement the other tech-heavy funds like SPYM and QQQM. Its main advantage is that technology plays a smaller role in its performance.
Instead, the biggest companies in the fund are in industries like health care, consumer defensive, energy, and technology. Its top companies are Chevron, ConocoPhilips, Merck, and Coca-Cola.
The fund’s dividend yield of 3.36% is not all that encouraging in an era when income premium funds are paying double digit yields. However, if the AI boom fades, the SCHD will be one of the best funds in terms of its performance as we saw earlier this year when it surged to a record high.
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