By Ian Salisbury
December 19, 2019
Illustration by Francesco Ciccolella

Exchange-traded funds offer investors a cheap, convenient way to buy a broad portfolio of stocks or bonds — maybe even one that represents the entire market. It’s no wonder they’re so popular with investors.

The problem is with more than 3,000 ETFs on the market, it can be difficult to figure out which one is best for you. But it doesn’t have to be. Since ETFs hold hundreds and sometimes even thousands of stocks and bonds, you should be able to build a well-rounded portfolio with just a few, with the right know-how.

That’s why we’ve created the Money 50 list of Best ETFs for 2020 as a companion to our Money 50 list of of Best Mutual Funds.

To help you make sense of your options, our list is broken out into three groupings: “one-decision ETFs,” which are single funds offering you exposure to both equities and fixed income; “building-block ETFs” for the core of your portfolio, offering you broad exposure to stocks and bonds; and “custom ETFs” to help you tilt toward specific strategies, such as value or dividend investing.

You can find our list of 50 recommended traditional mutual funds here.

Not sure about the difference between an ETF and a traditional mutual fund? Here’s a primer.

One-Decision ETFs

Don’t want to put ­together a portfolio on your own? Then use one of these professionally managed ETFs that hold a ­diversified mix of stocks and bonds.

Building-Block ETFs

These exchange-traded funds expose you to broad swaths of the stock and bond markets, and should be used to construct the core part of your port-folio that you’ll hold for years. Because you’re simply seeking basic exposure, low-cost index funds are your best bet here.

Custom ETFs

Supplement your core holdings with these funds to diversify more broadly and to tilt toward certain types of stocks and bonds.

NOTES: ¹Net prospectus expense ratios were used. ²Total return figures are as of Nov. 30. ³Five-year returns are annualized. N.A.: Not available or not applicable.

SOURCES: Fund companies

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