Best ETFs to Watch in February 2025

Exchange-traded funds (ETFs) are investment funds that trade on stock exchanges, similar to individual stocks, and typically track an index, sector, commodity, or asset class. They offer
investors diversification, as a single ETF can hold a broad mix of securities, reducing risk compared to investing in individual stocks. ETFs also tend to have lower expense ratios than actively managed mutual funds and provide liquidity, allowing investors to buy and sell shares throughout the
trading day at market prices.

Below, we outline the top equity, bond, fixed income, commodities, and currency ETFs that generated the highest returns over the last month. We have excluded leveraged and inverse ETFs, as well as funds with less than $50 million in assets under management (AUM).

All data are current as of Jan. 27, 2025.

• One-month performance: 12.9%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 1.22%
• 30-Day Average Daily Volume: 48,460 
• Assets Under Management (AUM): $240.4 million
• Inception Date: June 19, 2006
• Issuer: State Street

The SPDR S&P Oil & Gas Equipment & Services ETF (XES) offers investors exposure to the U.S. energy industry’s equipment and services sub-sector. By employing an equal-weighted
strategy, XES provides balanced exposure across its holdings, reducing the concentration risk associated with larger-cap companies. As of Jan. 24, 75% of the portfolio is in stocks of oil and gas equipment and services companies, and 25% of the portfolio is in oil and gas drilling.

• One-month performance: 2.4%    
• Expense Ratio: 1.98%
• Annual Dividend Yield: 5.3%
• 30-Day Average Daily Volume: 176,335
• Assets Under Management (AUM): $199 million
• Inception Date: July 12, 2011
• Issuer: VanEck

The VanEck CEF Muni Income ETF (XMPT) offers investors exposure to the municipal bond market by investing in closed-end funds that hold municipal bonds. This approach provides access to a
diversified portfolio of municipal bonds managed by various fund managers.

• One-month performance: 0.95%      
• Expense Ratio: 0.25%
• Annual Dividend Yield: 3.3%
• 30-Day Average Daily Volume: 65,065
• AUM: $436 million
• Inception Date: Feb. 14, 2012
• Issuer: iShares/BlackRock

The iShares CMBS ETF (CMBS) provides targeted exposure to U.S. commercial mortgage-backed
bonds, offering investors access to a specific segment of the mortgage-backed securities market.

• One-month performance: 15.9%
•  Expense Ratio: 1.06%
• Annual Dividend Yield: N/A
• 30-Day Average Daily Volume: 13,123,380
• AUM: $665 million
• Inception Date: April 18, 2007
• Issuer: Marygold

The United States Natural Gas Fund (UNG) is an ETF designed to closely track the daily price movements of natural gas using its Benchmark Futures Contract, primarily the near-month natural gas futures trading on the NYMEX. UNG had a strong one-month performance, as natural gas prices have rallied following colder-than-anticipated weather in the United States.

•  One-month performance: 0.77% 
• Expense Ratio: 0.4% 
• Annual Dividend Yield: N/A
• 30-Day Average Daily Volume: 144,980 
• AUM: $396 million 
• Inception Date: Feb. 12, 2007
• Issuer: Invesco

The Invesco Currency Shares Japanese Yen Trust (FXY) is an ETF designed to track the price of the Japanese yen through physical yen holdings. The yen serves as Japan’s national currency and is managed by the Bank of Japan, the country’s central bank.

How We Chose the Best ETFs

We selected the best ETFs across five areas of focus—equities, bonds, fixed-income, commodities, and currencies—utilizing a screener by VettaFi. In each case, we sorted ETFs according to the specified category and ranked them by highest one-month returns. We then filtered out any ETFs that employ a leveraged or inverse strategy, as well as any with less than $50 million in assets under management. Finally, for currencies ETFs, we excluded any funds focused on cryptocurrencies from our screen.

How to Invest in ETFs

To invest in ETFs, start by researching and selecting an ETF that aligns with your financial goals, risk tolerance, and investment strategy—whether it tracks a broad market index, a specific sector, or a commodity. Open a brokerage account with a platform that offers ETF trading, then place an order
just like you would for a stock. Consider factors such as expense ratios, liquidity, and tracking accuracy to ensure you’re getting the best value for your money. Depending on your time horizon and risk tolerance, ETFs typically require minimal maintenance and are often considered long-term, buy-and-hold investments.

The Bottom Line

ETFs are versatile and cost-effective investment options that provide diversification, liquidity, and tax efficiency, making them ideal for both new and experienced investors. With minimal maintenance required, they offer a simple way to gain exposure to broad markets or specific sectors while managing risk.

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As of the date this article was written, the author does not own any of the above ETFs.