Kip ETF 20: The Best Cheap ETFs You Can Buy

Build a solid core for your portfolio and explore new opportunities with our favorite cheap ETFs.

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Some three decades since their launch, exchange-traded funds (ETFs) have become the investment vehicle of choice. ETFs – which hold baskets of securities like mutual funds do but trade like stocks – caught on slowly at first, then at full steam. 

 "ETFs are becoming the way to invest," says Aniket Ullal, head of ETF data and analytics at CFRA Research. "This has been the story for a while, so that doesn't surprise me."

Investors have been drawn to the low cost, ease of trading and tax-efficiency that ETFs offer, but a wave of new exchange-traded products in recent years has also turned heads. 

Many new ETFs employ complex strategies that are accessible to individual investors for the first time. "ETF innovation is alive and well," says Jay Jacobs, U.S. head of thematic and active ETFs at BlackRock. 

Funds based on options strategies, for instance, continue to dominate the roster of new launches. A lot of them, called defined-outcome or buffered ETFs, use options to limit your losses in the stock market in exchange for giving up some potential gains. 

But the biggest chunk of new money has been moving into spot bitcoin ETFs, which got the okay to launch in January 2024 from the U.S. Securities and Exchange Commission (SEC). 

How we chose the best cheap ETFs to buy

We are mindful of these trends, but we're not chasing them. We are not considering a bitcoin ETF for this list of our favorite cheap ETFs, for instance. The Kip ETF 20 is designed to serve as a resource for investors who want to build a broadly diversified investment portfolio. 

Our aim when choosing the best ETFs with low expense ratios is to provide ideas for strategies that can serve as the building blocks of a core portfolio, as well as a few selected tactical and thematic funds that can boost performance as part of a satellite portfolio. 

Read on for more analysis of the best cheap ETFs to buy. These Kip ETF 20 picks allow investors to tackle various strategies at a low cost. All returns and data are through January 31 and the yields are 30-day SEC yields, unless otherwise noted. 

Nellie S. Huang
Senior Editor, Kiplinger Personal Finance Magazine

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.