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The Top 3 ETFs to Buy in April 2024

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Investing in the U.S. stock market can be incredibly daunting. It’s easy to get overwhelmed by the array of investment choices, the impact of global economic factors, and the incessant amount of news that collectively moves stocks. However, that problem can be effectively solved if you simply invest in the top ETFs to buy.

ETFs, especially the best ones, offer broad market exposure, which reduces the risk tied to individual stocks. Hence, they present themselves as a practical solution for those looking to diversify and tap into multiple sectors, investment styles, and regions without needing much financial knowledge. With that said, here are three top ETFs to invest in for healthy upside potential and shareholder rewards.

Invesco S&P 500 Top 50 ETF (XLG)

S&P 500 displayed on a stock chart. SPY stock.

Source: Immersion Imagery / Shutterstock

Perhaps one of the greatest investors of our time in Warren Buffett, has often expressed skepticism about excessive diversification. The Invesco S&P 500 Top 50 ETF (NYSEARCA:XLG) embodies this philosophy, as it focuses on the top 50 stocks in the S&P 500 index. These 50 stocks have comfortably outperformed the broader S&P 500 index across multiple time periods over the past decade.

We saw how artificial intelligence (AI) dominated financial markets across the globe. However, most of these gains were among a few tech giants. Therefore, investing in these handful of stocks, which drove most of the gains last year, should allow you to focus more on quality over quantity. Moreover, the XLG ETF, has an expense ratio of just 0.20%, 60% lower than the sector median, which makes it one of the most efficient ETFs to wager on at this time.

Pacer US Cash Cows 100 ETF (COWZ)

A pink piggy bank sits on top of piles of cash to represent cash-rich stocks

Source: Shutterstock

Pacer US Cash Cows 100 ETF (BATS:COWZ) zeroes in on the top 100 companies generating the most free cash flows (FCF). Investing in an ETF like COWZ is an excellent choice, especially given the current economic backdrop of uncertainty and sticky inflation. Companies generating robust FCF can efficiently manage rising costs without the need for external financing. Their growing FCF base ensures that they can continue expanding their businesses while handsomely rewarding their shareholders in the process. Moreover, its holdings are across stable growth sectors, representing more than 20% of its portfolio.

The COWZ ETF has either outperformed the S&P 500 or stayed neck and neck over the past several years. Perhaps one of the biggest reasons to invest in the COWZ is its incredible dividend profile, yielding a healthy 1.90%. It has also paid a dividend in the past seven consecutive years, while its 5-year dividend growth is at 17.41%. 

Vanguard Growth Index Fund ETF (VUG)

Graphic of green and blue arrow against pale green background pointing up and to the right, symbolizing growth stocks

Source: shutterstock.com/ex_artist

With the Federal Reserve likely to implement interest rate cuts later in the years, now’s probably the right time to consider investing in growth ETFs. Betting on the top growth ETFs, such as the Vanguard Growth Index Fund ETF (NYSEARCA:VUG), can be incredibly beneficial, especially at the start of a bull run. Growth ETFs consist of businesses that are likely to outperform their competition, providing superb capital gains as market confidence increases.

The VUG ETF, in particular, contains more than 200 holdings, with a strong focus on the tech sector. The tech sector alone accounts for approximately 50% of the fund’s total assets. It is followed by the consumer discretionary space, which comprises 20% of the portfolio, leaving limited space for other sectors. Moreover, its top 10 investments are in some of the best performers over the past decade. Many of the AI juggernauts in Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA) are part of Vangaurd’s portfolio.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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